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

Current large capex: Indonesia factory, expected to be ready by next financial year. No large production capex expected in the coming year; focus on incremental capex. Incremental capex targeted at product development teams and infrastructure to support growth and diverse projects. Product development teams expected to double or triple in the next 3-4 years. European facilities (Italy and Netherlands) optimized for increased production without significant capex currently. Possible new manufacturing or development capex in Europe anticipated around 18 months from now (2025-26). No major inorgan

Future growth expectations in sales/revenue/volumes?

Company targets a 10-12% year-on-year revenue growth for the mid-term (3 to 5 years), with potential to exceed this based on current strong order wins. Growth is expected across all regions including Europe, India, Southeast Asia, and new markets like the US. Volume growth outpaces price increases; last quarter’s growth primarily driven by volume with minimal price impact (~1-2%). Market share expansion in India and growth in Flavours segment anticipated to contribute materially. New product introductions and new accounts (including wins from a global MNC) expected to add meaningful revenue fr

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

The company targets a 12%+ CAGR revenue growth over the mid-term (3-5 years) with some quarters possibly showing higher growth due to base effects and new order ramp-up. EBITDA margins are projected to sustainably reach around 16%-16.5%, with occasional quarters potentially hitting 18%. ROCE (Return on Capital Employed) is expected to improve from the current 13% to upwards of 20% within 4 to 5 quarters, driven by growth and inventory reduction. PAT (Profit After Tax) could grow from approx. Rs. 120-130 crore (annualized) to Rs. 140-150 crore with 10% top-line growth and 10% inventory co

Current/ Expected Orderbook/ Pending Orders?

The company has received orders from an MNC with a cumulative value of approximately Rs. 300 crore. The expected run rate from these orders is around Rs. 100 crore per annum over 3 years. However, the ramp-up of these orders is delayed by 12 to 18 months due to redesign and revamp of the project by the client. First orders for new projects have started but are currently not significant in revenue. Full rollout and meaningful revenue contribution from new orders are expected by the second half of FY '25. The company is not actively chasing new tenders or orders beyond the current pipeline. Orde

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S H Kelkar & Company LtdQ4 FY25Chemicals & Petrochemicals

S H Kelkar & Company Ltd Q4 FY25 Earnings Call Analysis

Q: Any current/future new fundraising through debt or equity?

The company does not expect any large capex or inorganic growth in the near future, having completed significant acquisitions in the past 4 years. Current debt stands around Rs. 500 crore, primarily from acquisitions. Cash flows are expected to bring down the debt. There is no mention of plans for new debt or equity fundraising. Capital allocation policy includes distributing 30-40% of cash profit as dividends or share buyback. The last major outlay was for the Indonesia project; no major future capex is lined up. Incremental capex on product development and infrastructure is planned but not l

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

Capex

0 of 5 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Company targets a 10-12% year-on-year revenue growth for the mid-term (3 to 5 years), with potential to exceed this based on current strong order wins.
→Growth is expected across all regions including Europe, India, Southeast Asia, and new markets like the US.
→Volume growth outpaces price increases; last quarter’s growth primarily driven by volume with minimal price impact (~1-2%).
→Market share expansion in India and growth in Flavours segment anticipated to contribute materially.
→New product introductions and new accounts (including wins from a global MNC) expected to add meaningful revenue from H2 FY25 onwards.
→Southeast Asia factory commissioning to boost regional growth.
→Lower capacity utilization (<50%) allows for operating leverage and volume growth without major capex in near term.
→E-commerce and startup segments in India identified as growth drivers.
→Overall, sustained double-digit growth in volume and sales targeted with a focus on market penetration and operational efficiency.

Margin guidance

Category 3

→The company targets a 12%+ CAGR revenue growth over the mid-term (3-5 years) with some quarters possibly showing higher growth due to base effects and new order ramp-up.
→EBITDA margins are projected to sustainably reach around 16%-16.5%, with occasional quarters potentially hitting 18%.
→ROCE (Return on Capital Employed) is expected to improve from the current 13% to upwards of 20% within 4 to 5 quarters, driven by growth and inventory reduction.
→PAT (Profit After Tax) could grow from approx. Rs. 120-130 crore (annualized) to Rs. 140-150 crore with 10% top-line growth and 10% inventory control.
→The ramp-up of new large orders (e.g., MNC deal) may take 12-18 months, contributing further to growth post H2 FY25.
→Flavours segment margins are expected to improve gradually with focus on profitable segments and operational efficiencies.
→No major capex is planned currently, allowing focus on organic growth and efficient capital use.

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Fundraise plans

- The company does not expect any large capex or inorganic growth in the near future, having completed significant acquisitions in the past 4 years. - Current debt stands around Rs. 500 crore, primarily from acquisitions. - Cash flows are expected to bring down the debt. - There is no mention of plans for new debt or equity fundraising. - Capital allocation policy includes distributing 30-40% of cash profit as dividends or share buyback. - The last major outlay was for the Indonesia project; no major future capex is lined up. - Incremental capex on product development and infrastructure is planned but not large-scale fundraising. **Conclusion:** No new major fundraising through debt or equity is planned currently or in the near future.

Order book

→The company has received orders from an MNC with a cumulative value of approximately Rs. 300 crore.
→The expected run rate from these orders is around Rs. 100 crore per annum over 3 years.
→However, the ramp-up of these orders is delayed by 12 to 18 months due to redesign and revamp of the project by the client.
→First orders for new projects have started but are currently not significant in revenue.
→Full rollout and meaningful revenue contribution from new orders are expected by the second half of FY '25.
→The company is not actively chasing new tenders or orders beyond the current pipeline.
→Order wins are spread across domestic and Indonesian markets, supported by ongoing capacity expansion.

Capex plans

→Current large capex: Indonesia factory, expected to be ready by next financial year.
→No large production capex expected in the coming year; focus on incremental capex.
→Incremental capex targeted at product development teams and infrastructure to support growth and diverse projects.
→Product development teams expected to double or triple in the next 3-4 years.
→European facilities (Italy and Netherlands) optimized for increased production without significant capex currently.
→Possible new manufacturing or development capex in Europe anticipated around 18 months from now (2025-26).
→No major inorganic acquisitions planned; focus on organic growth through subsidiaries in the US and Europe.
→Capital allocation policy involves distributing 30-40% of cash profit as dividends or share buybacks; incremental cash likely to be used for debt repayment.

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