SHK's Rs 15.21 cr profit was carried by other income
Standalone operating margin was just 1.29%, while other income exceeded profit before tax; management still expects double-digit FY27 revenue growth and better margins.
Filed 28 Jul 2026, 19:05 IST · after market close · SHK (SHK)
Key takeaways
- Standalone operating profit was only Rs 4.36 cr on revenue of Rs 337.05 cr, leaving operating margin at 1.29%.
- Other income of Rs 31.40 cr exceeded profit before tax of Rs 20.33 cr, making the Rs 15.21 cr net profit reliant on non-operating income.
- Management said it expects double-digit FY27 revenue growth and improved margins after Q1 revenue of Rs 337.05 cr, with product mix, raw-material costs and expense phasing influencing margins.
Operating earnings were thin despite reported profit
This standalone quarter produced Rs 4.36 cr of operating profit on Rs 337.05 cr of revenue, so the core business generated only a 1.29% operating margin. Interest of Rs 7.71 cr and depreciation of Rs 7.72 cr each exceeded operating profit. Other income of Rs 31.40 cr therefore made the difference between weak operating earnings and Rs 15.21 cr of net profit.
Profit quality is the main read-through
Other income was higher than the Rs 20.33 cr profit before tax, which means reported earnings were not driven by operating profit alone. The Rs 5.12 cr tax charge represented a 25.18% tax rate, so the primary quality concern is the gap between the operating result and the reported profit rather than tax-rate relief.
Management sees growth but flags margin variability
Management said the Fragrance business delivered revenue growth during Q1, while Global Ingredients was affected by lower demand in select export markets amid geopolitical uncertainty. The company said quarterly revenue growth may vary with customer-order timing and that margins will be influenced by product mix, raw-material costs and operating-expense phasing. Management also said strategic inventory improved supply assurance but increased working-capital requirements, and reiterated its commitment to deleveraging over the medium to long term.
No post-result market reaction to assess yet
The standalone results were filed after market close on 28 Jul 2026.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹337 cr |
| Other income | ₹31 cr |
| Expenses | ₹333 cr |
| Operating profit | ₹4 cr |
| Operating margin (%) | 1.29% |
| Interest | ₹8 cr |
| Depreciation | ₹8 cr |
| Profit before tax | ₹20 cr |
| Tax | ₹5 cr |
| Net profit | ₹15 cr |
| EPS (₹) | ₹1.10 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Fragrance business delivered healthy revenue growth during Q1 FY27.
Guidance & outlook
- The company expects double-digit revenue growth and improved margins for FY27.
- Quarterly revenue growth may vary based on customer order timing.
- The company expects margins to be influenced by product mix, raw material costs and operating expense phasing.
- The company remains committed to deleveraging over the medium to long term.
Expansion
- The company is strengthening its R&D, Creative Development Centres and manufacturing platform.
- The company has expanded its global Creative Development Centre network.
New initiatives
- The company built strategic inventory to improve supply assurance and support business continuity.
- The company is pursuing pricing, cost-management, cash-conversion and capital-allocation initiatives.
- The company is leveraging expanded capabilities to deepen customer partnerships and broaden its opportunity pipeline.
Problems & risks
- Geopolitical developments and volatility in select raw material prices require close monitoring.
- Strategic inventory build-up has increased working capital requirements.
- The company is navigating near-term headwinds.
- Global Ingredients performance was affected by lower demand in select export markets amid geopolitical uncertainty.
- Near-term visibility remains limited because customer ordering patterns are sensitive to international developments.
What to watch
- Whether operating margin improves from 1.29%, in line with management's statement that it expects improved margins for FY27.
- Whether revenue growth supports operating profit above Rs 4.36 cr as the company pursues its stated double-digit FY27 growth expectation.
- Whether other income remains a major earnings contributor after Rs 31.40 cr exceeded profit before tax of Rs 20.33 cr.