Any current/future new fundraising through debt or equity?

There are no immediate plans to repay the debt as of now. Current operations are generating free cash flow, which is progressively reducing debt. Recent investments have been concluded in the Indonesia plant and the Holland Aromatics acquisition. No large deployments or new investments are foreseen in the next couple of quarters. Debt levels are expected to start coming down after this period. The company plans to maintain net debt to EBITDA ratio below 2x as a priority. There is no mention of any new fundraising through debt or equity in the near term.

Any current/future capex/capital investment/strategic investment?

Recently concluded investments in the Indonesia plant and the acquisition of Holland Aromatics. Indonesia factory is expected to commence by the end of the current financial year, enhancing capacity for Middle East and Southeast Asia markets. No immediate plans for new capacity investment in Europe; will assess market conditions over the next year or two before deciding. Plans to augment India capacity by supporting export business from the India plant, leveraging the new Indonesia facility. Backward integration for Global Ingredients scheduled for completion in Q4 FY24, expected to im

Future growth expectations in sales/revenue/volumes?

Management expects a **12% medium-term CAGR growth** in revenue, with confidence in sustaining this trend (Page 6). Volume growth is projected to be **double-digit**, driven by market share gains, especially from new global MNC clients and large corporates (Pages 14, 15). The Fragrance segment is expected to grow at over **12% CAGR**, while the Flavour segment targets around **15% CAGR growth** (Page 10). Growth is supported by a mix of new and existing products, with new products contributing around 3-6% to revenues (Page 5). Export business remains seasonal and uncertain short-term but expec

Future growth expectations in earnings/operating earnings/profits/EPS?

The company is confident of sustaining double-digit revenue growth, targeting around 12% medium-term growth (Page 6). EBITDA margins are expected to remain stable with potential to improve if raw material prices decline; current margin is about 16.7% (Pages 8-9). Volume growth is a major driver, with existing clients growing at 6-7% plus new product introductions contributing additional growth (Page 8). European operations aim for bottom-line improvement even with high capacity utilization (above 85%) (Page 2). Backward integration in the Global Ingredients segment is expected to achieve EBITD

Current/ Expected Orderbook/ Pending Orders?

The RFQ (Request for Quotation) position remains unchanged from last quarter; it is still a work in progress with no significant updates or finalizations yet. Kedar Vaze mentioned there is no single large ticket RFQ; instead, finalizations are happening on various timelines across multiple subparts. Visibility on RFQ finalization for FY25 is not complete; more time is needed before conclusions can be drawn. Despite RFQ uncertainty, the company is confident about sustaining double-digit revenue growth (around 12%) in the medium term, driven by existing and new products. Orders have started comi

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S H Kelkar & Company LtdQ3 FY23Chemicals & Petrochemicals

S H Kelkar & Company Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹135P/E: 38.1Market Cap: ₹1.9K CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

Yes

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Management expects a **12% medium-term CAGR growth** in revenue, with confidence in sustaining this trend (Page 6).
→Volume growth is projected to be **double-digit**, driven by market share gains, especially from new global MNC clients and large corporates (Pages 14, 15).
→The Fragrance segment is expected to grow at over **12% CAGR**, while the Flavour segment targets around **15% CAGR growth** (Page 10).
→Growth is supported by a mix of new and existing products, with new products contributing around 3-6% to revenues (Page 5).
→Export business remains seasonal and uncertain short-term but expected to recover long-term (Page 10).
→The company sees **upside risk** beyond the 12% growth guidance due to ongoing RFQs and new customer acquisitions (Page 10).
→Strategic efforts via backward integration and new product launches will aid sustainable volume and revenue growth.

Margin guidance

Category 3

→The company is confident of sustaining double-digit revenue growth, targeting around 12% medium-term growth (Page 6).
→EBITDA margins are expected to remain stable with potential to improve if raw material prices decline; current margin is about 16.7% (Pages 8-9).
→Volume growth is a major driver, with existing clients growing at 6-7% plus new product introductions contributing additional growth (Page 8).
→European operations aim for bottom-line improvement even with high capacity utilization (above 85%) (Page 2).
→Backward integration in the Global Ingredients segment is expected to achieve EBITDA breakeven post Q4 FY24, enhancing profitability (Page 6).
→Overall, the focus is on volume growth, market share gains, and synergy realization post acquisitions to drive earnings growth forward (Pages 2, 12).

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Fundraise plans

→There are no immediate plans to repay the debt as of now.
→Current operations are generating free cash flow, which is progressively reducing debt.
→Recent investments have been concluded in the Indonesia plant and the Holland Aromatics acquisition.
→No large deployments or new investments are foreseen in the next couple of quarters.
→Debt levels are expected to start coming down after this period.
→The company plans to maintain net debt to EBITDA ratio below 2x as a priority.
→There is no mention of any new fundraising through debt or equity in the near term.

Order book

Yes

→The RFQ (Request for Quotation) position remains unchanged from last quarter; it is still a work in progress with no significant updates or finalizations yet.
→Kedar Vaze mentioned there is no single large ticket RFQ; instead, finalizations are happening on various timelines across multiple subparts.
→Visibility on RFQ finalization for FY25 is not complete; more time is needed before conclusions can be drawn.
→Despite RFQ uncertainty, the company is confident about sustaining double-digit revenue growth (around 12%) in the medium term, driven by existing and new products.
→Orders have started coming in post destocking in international markets, with hopes to catch up on run rate before year-end, indicating improving order flow.

Capex plans

Yes

→Recently concluded investments in the Indonesia plant and the acquisition of Holland Aromatics.
→Indonesia factory is expected to commence by the end of the current financial year, enhancing capacity for Middle East and Southeast Asia markets.
→No immediate plans for new capacity investment in Europe; will assess market conditions over the next year or two before deciding.
→Plans to augment India capacity by supporting export business from the India plant, leveraging the new Indonesia facility.
→Backward integration for Global Ingredients scheduled for completion in Q4 FY24, expected to improve supply chain resilience and cost competitiveness.
→No large capital deployments anticipated in the next couple of quarters; operational cash flow used to reduce debt progressively.

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