S H Kelkar & Company Ltd Q2 FY26: Perfume Maker’s Profits Go Up in Smoke—Literally (Fire Loss ₹160 Cr), But the Fragrance Lingers
1. At a Glance
Welcome to the world of Keva, where your room spray, shampoo, and biscuit essence might all owe a silent “thank you” to one company that’s seen both fire and fragrance—quite literally. S H Kelkar & Company Ltd, India’s largest homegrown fragrance and flavour manufacturer, closed Q2 FY26 with sales of ₹554 crore and a jaw-dropping 78% profit fall after the devastating fire at its flagship Vashivali plant earlier this year.
At a market cap of ₹3,002 crore and trading at ₹217/share, the company smells of recovery but with a burnt undertone. PAT for the quarter stood at ₹9.17 crore versus ₹39.81 crore last year, while revenue grew a modest 2.1% YoY. The EBITDA margin slipped to 9.46%, its lowest in recent memory.
Still, Keva retains its crown as India’s fragrance king—boasting 87.8% revenue from fragrances, 12.2% from flavours, and a presence in 90+ countries. But the current aroma? More like “Burnt Oud with a hint of Insurance Claim.”
2. Introduction – When the Perfume Factory Catches Fire, Investors Get a Reality Check
Picture this: a company that’s been bottling India’s smell of success since independence suddenly becomes the scent of tragedy—thanks to a ₹160 crore fire loss at its Vashivali unit in April 2024. Even the gods of fragrance couldn’t make that smell pleasant.
But in true filmi style, S H Kelkar (SHK) didn’t wallow. It shifted operations across alternate sites, filed insurance claims, pocketed a cool ₹95 crore interim relief, and began rebuilding. Now, the company’s FY26 journey reads like a Bollywood script—disaster, resilience, and a new CFO twist (welcome, Jagdish Agarwal, joining December 2025).
On paper, the business model remains fragrant—dominant in the Indian fragrance market (61% share) and spreading across Europe and ASEAN via new facilities in Amsterdam, Almere, and Jakarta. But under the glitter of vanilla and sandalwood, margins are bruised.
The market’s reaction? Investors are sniffing suspiciously, especially after stock’s 28% fall in one year. Yet, as the Vashivali site rebuilds and the upcoming Vanavate Greenfield facility gears for FY26-end commissioning, Keva might soon reclaim its mojo—or should we say, its musk.
3. Business Model – WTF Do They Even Do?
If you’ve ever wondered who decides that your detergent smells like “Morning Fresh” and not “Chlorine Death,” here’s your answer.
S H Kelkar operates in three scented segments:
Fragrance Products (88% of sales): Everything from soaps and shampoos to air fresheners and fine perfumes.
Flavour Products (12%): Used in baked goods, beverages, and dairy products. So, yes, your Elaichi biscuit might owe its identity to Keva.
Aroma Ingredients & Natural Actives: The science lab where Keva plays God—creating new molecules for deodorants and perfumes. Six of their 20 patents are already commercially used.
The company’s secret sauce lies in being a B2B supplier to FMCG giants—many of whom don’t like you knowing who makes your favourite product smell divine.
Manufacturing bases are spread across Vashivali, Vapi, Mahad, and Gurugram—with the Jakarta plant serving Southeast Asia and Amsterdam-Almere serving Europe. Upcoming Vanavate facility aims to consolidate operations, cut lease costs, and modernize production.
If that doesn’t impress you, maybe this will: SHK is the only Indian-origin fragrance company with filed patents in aroma molecules. It’s like being the ISRO of smells—except their rockets explode with perfume.
4. Financials Overview – Quarter That Reeked of Trouble
Metric
Q2 FY26
Q2 FY25
Q1 FY26
YoY %
QoQ %
Revenue (₹ Cr)
553.9
542.5
580.6
2.1%
-4.6%
EBITDA (₹ Cr)
52.4
80.1
73.0
-34.5%
-28.2%
PAT (₹ Cr)
9.17
39.8
25.5
-77.0%
-64.0%
EPS (₹)
0.66
2.87
1.85
-77.0%
-64.0%
Commentary: That, dear readers, is what happens when your main factory catches fire and you’re forced to operate out of temporary kitchens. The EBITDA margin collapsed to 9.46%, down from 14.7% YoY. PAT got roasted. Revenue growth barely beat inflation.
But to Keva’s credit, operations didn’t stop. They somehow blended, bottled, and billed ₹554 crore worth of fragrance despite the chaos. Think of it as cooking biryani in your neighbor’s kitchen after your own stove exploded.
5. Valuation Discussion – Fair Value Range (Educational)
Let’s play professor:
EPS (TTM): ₹11.2
Current P/E: 30.1×
Industry P/E: 31.6×
EBITDA (TTM): ₹262 crore
EV/EBITDA: 14.3×
Debt: ₹889 crore
EV: ₹3,803 crore
Method 1 – P/E Approach: If SHK trades at a more “normal” 25–32× FY27E earnings (once Vashivali returns): Fair Value Range ≈ ₹280 – ₹360
Method 2 – EV/EBITDA Approach: At normalized margin (18%) and expected EBITDA ₹400 crore by FY27: EV Range = ₹5,200 – ₹5,600 crore After adjusting for ₹889 crore debt → Equity Value ≈ ₹4,300 – ₹4,700 crore → Fair Value Range ₹310 – ₹340/share
📘 Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
There’s been more boardroom action here than at a startup IPO.
April 2024: The Vashivali facility catches fire, wiping out ₹160 crore in assets. Insurers cry, investors sigh.
April 2025: ₹95 crore interim insurance relief received. The fragrance gods finally smiled.
FY25: Company sets a ₹200 crore CAPEX plan—₹95 crore for rebuilding Vashivali, ₹6–7 million in Europe for Holland Aromatics, and the rest for Vanavate’s Greenfield site.
October–December 2025: CFO musical chairs—Deepti Chandratre (interim) exits, Jagdish Agarwal appointed as Group CFO effective Dec 2, 2025.
Indonesia subsidiary PT SHK Keva received a $5 million infusion, positioning ASEAN as the
