Any current/future new fundraising through debt or equity?

Currently, there are no plans for any new acquisitions or major investments requiring additional funding. The company aims to reduce its debt to below Rs.400 Crore over the next 18 months and maintain strong cash flows. While the management did not rule out future acquisitions entirely, any decisions would depend on market conditions and improved business prospects. The focus remains on generating free cash flow of Rs.10-12 Crore per month and deleveraging from the current Rs.522 Crore debt to around Rs.450 Crore in the next six months. No specific mention was made of raising new debt or equit

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

No significant capex is required for the upcoming $350 million RFQ projects; focus is on development and product testing costs rather than capital expenditure. Manufacturing capacity expansions have already been initiated, including capacity in Indonesia to support business growth and additional volumes. Cost synergies and capacity rationalization are expected from the consolidation of European operations, reducing duplicated management roles and improving raw material procurement. Backward integration efforts include developing domestic alternative suppliers for key raw materials currently so

Future growth expectations in sales/revenue/volumes?

The company expects growth to outpace GDP growth in the economies where it operates. Target annual growth rate is around 12%, contingent on demand environment improvements. Significant growth is expected from a $350 million RFP opportunity, with Rs.100 Crore annual potential projects submitted, and bids worth Rs.300-400 Crore in the pipeline. The RFP process is expected to take about 12 months for submissions and an additional six months for results, with business potentially flowing in the second half of the calendar year. Besides RFP-driven growth, organic growth will depend on macro

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

The company expects growth to be more than the GDP growth of the economies where it operates. Organic growth is uncertain and largely dependent on macroeconomic factors, but the company is fully prepared with product development and capacity. The RFQ (Request for Proposal) business is an incremental growth driver, with a pipeline of Rs.400-500 Crore worth of submissions, expected to translate into revenues over the next 6-9 months. Operating margins on new RFQ business are expected to be in line with existing margins, although gross margins may be lower. Global Ingredients division aim

Current/ Expected Orderbook/ Pending Orders?

The company has submitted proposals totaling over Rs.100 Crore, with an additional Rs.300 Crore worth of submissions scheduled in the coming months, summing to Rs.400 Crore to Rs.500 Crore in active bids. The total potential business pipeline through RFPs is around Rs.300 Crore to Rs.400 Crore in the near term, with another Rs.300 Crore to Rs.400 Crore expected thereafter. Annual potential for Rs.100 Crore has been mentioned for specific projects, with a three-year continuity expected for some orders (e.g., a Rs.25 Crore project given for minimum three years). Overall, bids worth Rs.300 Crore

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: ₹130.63P/E: 38.6Market Cap: ₹1.8K CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

0 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

The company expects growth to outpace GDP growth in the economies where it operates.
Target annual growth rate is around 12%, contingent on demand environment improvements.
Significant growth is expected from a $350 million RFP opportunity, with Rs.100 Crore annual potential projects submitted, and bids worth Rs.300-400 Crore in the pipeline.
The RFP process is expected to take about 12 months for submissions and an additional six months for results, with business potentially flowing in the second half of the calendar year.
Besides RFP-driven growth, organic growth will depend on macroeconomic conditions and market recovery from inflationary and recessionary effects.
European operations are consolidating to streamline costs and free capacity, supporting future growth without significant capex.
Overall, growth will resume once the general market outlook improves and inflationary pressures ease.

Margin guidance

Category 3

The company expects growth to be more than the GDP growth of the economies where it operates.
Organic growth is uncertain and largely dependent on macroeconomic factors, but the company is fully prepared with product development and capacity.
The RFQ (Request for Proposal) business is an incremental growth driver, with a pipeline of Rs.400-500 Crore worth of submissions, expected to translate into revenues over the next 6-9 months.
Operating margins on new RFQ business are expected to be in line with existing margins, although gross margins may be lower.
Global Ingredients division aims to regain competitiveness through backward integration and farmer development initiatives; expected to stabilize and grow with better margins once domestic raw material supply is secured.
The company plans to focus on deleveraging, targeting Rs.300-400 Crore net debt in 18 months, supporting cash-flow-driven growth.
Overall, profits and operating earnings are expected to improve gradually, with growth accelerating post easing of inflation and recessionary pressures.

See what S H Kelkar & Company Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Currently, there are no plans for any new acquisitions or major investments requiring additional funding.
The company aims to reduce its debt to below Rs.400 Crore over the next 18 months and maintain strong cash flows.
While the management did not rule out future acquisitions entirely, any decisions would depend on market conditions and improved business prospects.
The focus remains on generating free cash flow of Rs.10-12 Crore per month and deleveraging from the current Rs.522 Crore debt to around Rs.450 Crore in the next six months.
No specific mention was made of raising new debt or equity funds in the near term.

Order book

The company has submitted proposals totaling over Rs.100 Crore, with an additional Rs.300 Crore worth of submissions scheduled in the coming months, summing to Rs.400 Crore to Rs.500 Crore in active bids.
The total potential business pipeline through RFPs is around Rs.300 Crore to Rs.400 Crore in the near term, with another Rs.300 Crore to Rs.400 Crore expected thereafter.
Annual potential for Rs.100 Crore has been mentioned for specific projects, with a three-year continuity expected for some orders (e.g., a Rs.25 Crore project given for minimum three years).
Overall, bids worth Rs.300 Crore to Rs.400 Crore annually may repeat, potentially scaling to Rs.1,200 Crore over three years.
The results from these submissions are expected to start coming in from the second half of the current financial/calendar year, following a submission phase of about one year and six months of waiting for outcome.

See what S H Kelkar & Company Ltd management said on order book — free account, 30 seconds.

Capex plans

No significant capex is required for the upcoming $350 million RFQ projects; focus is on development and product testing costs rather than capital expenditure.
Manufacturing capacity expansions have already been initiated, including capacity in Indonesia to support business growth and additional volumes.
Cost synergies and capacity rationalization are expected from the consolidation of European operations, reducing duplicated management roles and improving raw material procurement.
Backward integration efforts include developing domestic alternative suppliers for key raw materials currently sourced from China, expected within six months.
No immediate plans for acquisitions, with management focusing on debt reduction and cash flow improvement before considering further investments.
Open to joint ventures or strategic partnerships, particularly around segments like Global Ingredients, but no concrete capex or investment plans announced.

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S H Kelkar & Company Ltd Q3 FY23 Earnings Call Analysis

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