S H Kelkar and Company Ltd (SHK), India’s leading fragrance and flavours company, provided an operational update for Q3 FY2025. Here are the key highlights:
- Revenue Growth: SHK recorded consolidated revenues of ₹1,548 crore for the nine months ending December 31, 2024, showcasing a year-on-year (YoY) growth of 17% (provisional and unaudited). The company is on track to achieve double-digit growth for the full financial year.
- Demand Trends: Despite a challenging external environment, the company witnessed steady demand across key segments, with its core European market maintaining a stable performance.
- Margin Pressures: Gross margins were affected by supply constraints in strategic raw materials. While price adjustments have been made to mitigate cost increases, margin pressures are likely to persist until Q4 FY2025. Additionally, strategic investments in new Development Centres in Europe and the US weighed on EBITDA margins.
- Strategic Investments: The new Development Centres are expected to drive future revenue growth by expanding the company’s geographical reach and customer base. However, domestic demand showed early signs of a potential slowdown.
- Net Debt: Net debt as of December 31, 2024, stood at ₹700 crore, attributed to inventory replenishment following the Q1 fire and capital expenditure on the Vanavate facility. SHK expects partial insurance claim settlements in the next quarter to aid debt reduction.
Note: All figures are provisional and unaudited. The report excludes financial contributions from NuTaste Food and Drink Labs, in which SHK is divesting a 40% stake.
