1. At a Glance – One Whiff and the Room Changes
S H Kelkar & Company Ltd is currently trading around ₹169, with a market cap of ₹2,342 crore, looking like a premium perfume bottle that fell off the shelf and cracked — not shattered, but definitely leaking sentiment. Over the last 3 months, the stock is down ~10%, and over 6 months, down ~26%, which tells you the market has not been impressed with the recent fragrance.
Operationally, Q3 FY26 sales came in at ₹584 crore, up 7.5% YoY, but PAT dropped 39% YoY to ₹10.7 crore. That’s not a typo. Sales grew, profits fainted. EBITDA margins have compressed to ~9% in the quarter, largely due to fire-related disruptions, temporary manufacturing inefficiencies, and higher costs of doing jugaad operations across multiple sites.
Return ratios are underwhelming: ROE at 7.7%, ROCE at 10.3%, while net debt stands tall at ₹889 crore, giving a Debt/Equity of 0.67. Not alarming, but not comforting either.
This is a company with strong IP, global presence, 4,100+ clients, and a premium product portfolio — but also one that just suffered a ₹160 crore fire loss, is rebuilding its core plant, and is running a marathon with ankle weights called “temporary facilities.”
So the big question:
👉 Is this just a bad quarter with smoke damage, or has the fragrance faded permanently?
Let’s sniff deeper.
2. Introduction – From India’s Fragrance King to Firefighting Mode
S H Kelkar is not some random aroma mixer operating from a godown behind Crawford Market. This is India’s largest domestic fragrance manufacturer, the only Indian-origin company filing patents for novel aroma molecules, and a serious global player with operations across India, Europe, and Indonesia.
Their products go into everything you use daily — soaps, shampoos, detergents, deodorants, biscuits, beverages, and even pharma. If it smells nice or tastes slightly artificial but acceptable, chances are SHK had something to do with
it.
But FY25 and FY26 have been… eventful.
In April 2024, a major fire at the Vashivali plant — the company’s primary manufacturing facility — caused a ₹160 crore loss. Operations were shifted to alternate locations, insurance claims kicked in (₹95 crore interim relief received), and management entered Business Continuity Planning (BCP) mode.
Fast forward to FY26:
- Margins are compressed
- Costs are elevated
- Debt has gone up
- Investors are impatient
- Stock price is sulking near cycle lows
Yet, management claims this is a temporary pain, with FY27 margins expected to recover to 18–20% once:
- Vashivali is fully rebuilt
- Vanavate greenfield plant comes online
- European brownfield expansion stabilizes
Classic turnaround story. Or classic “next year will be better” perfume bottle.
Which one is it? Let’s break it down molecule by molecule.
3. Business Model – WTF Do They Even Do?
Imagine explaining SH Kelkar to a lazy investor:
“They sell smell and taste. At scale. Globally. With chemistry degrees.”
That’s basically it.
Three Core Segments
1) Fragrances (87.8% of Q1 FY26 revenue)
Used in:
- Personal wash (soaps, body wash)
- Fabric care (detergents, softeners)
- Skin & hair care
- Fine fragrances
- Household products
This is the bread, butter, and perfume of the company.
2) Flavours (12.2% of revenue)
Used in:
- Bakery
- Dairy
- Beverages
- Pharma syrups
Lower margin than fragrances but sticky customer relationships.
3) Aroma
