S H Kelkar & Co. Q2 FY27 Results (NSE: SHK)
Signal: Margin expansion
The read
The trajectory improved materially after three quarters of YoY EBITDA-margin contraction: Q2 revenue grew 14.9% to ₹636.2 Cr, EBITDA grew 49.9% to ₹78.9 Cr and margin expanded 300bps to 12.5%, but higher inventory, ₹911 Cr net debt, depreciation up 37.6% and finance costs up 25.1% remain the balance-sheet constraints.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹636.2 Cr | 14.9% | -4.0% |
| Net profit | ₹14.5 Cr | 58.1% | |
| EPS | ₹1.1 | 58.8% | |
| EBIT margin | 12.5% |
P&L walk
Revenue increased 14.9% to ₹636.2 Cr and EBITDA rose 49.9% to ₹78.9 Cr as other expenses fell 1.9%, expanding EBITDA margin by 300bps to 12.5%; higher depreciation of ₹37.7 Cr and finance costs of ₹17.4 Cr limited PAT to ₹14.5 Cr, up 58.1%.
Segments
Flavours drove the momentum, with H1 revenue up 47.4% to ₹184 Cr and segment result up 92.0% to ₹52 Cr; Fragrance grew 11.9% to ₹1,088 Cr, while Global Ingredients dragged with revenue down to ₹20 Cr and a ₹5 Cr loss versus ₹1 Cr EBITDA previously.
Key positives
- Revenue from operations rose 14.9% YoY to ₹636.2 Cr, reaccelerating from Q2 FY26 growth of 2.2%.
- EBITDA grew 49.9% YoY to ₹78.9 Cr and EBITDA margin expanded 300bps to 12.5%, with other expenses declining 1.9% YoY.
- Flavour revenue increased 47.4% to ₹184 Cr and segment result increased 92.0% to ₹52 Cr, making it the fastest-growing business.
- H1 EBITDA increased 33.3% to ₹167.5 Cr and margin improved to 13.0% from 11.1%, supporting the FY27 margin-recovery trajectory.
Key concerns
- Inventory rose 20.1% from ₹665.1 Cr at March 31, 2026 to ₹798.8 Cr, while management acknowledged higher working capital from deliberate stock-building.
- Net debt increased to ₹911 Cr from approximately ₹786.7 Cr at March 31, 2026, and finance costs rose 25.1% YoY to ₹17.4 Cr.
- Depreciation increased 37.6% YoY to ₹37.7 Cr, outpacing revenue growth of 14.9% and limiting EBITDA-to-PBT conversion.
- Global Ingredients revenue fell 37.5% YoY to ₹20 Cr and its EBITDA declined to a ₹5 Cr loss from ₹1 Cr profit.
Research and educational content only. Not investment advice.