S H Kelkar profit drops 67.95% QoQ as other income fades
Costs fell slower than revenue, squeezing operating margin by 0.98 percentage points, while the tax rate rose 9.50 percentage points.
Filed 02 Nov 2026, 19:34 IST · after market close · S H Kelkar & Company Ltd (SHK)
Key takeaways
- Consolidated net profit fell 67.95% QoQ to Rs 14.56 cr as profit before tax declined 60.30%.
- Operating margin narrowed 0.98 percentage points to 12.40% because expenses fell slower than revenue.
- Other income fell 88.59% QoQ to Rs 3.42 cr, while the tax rate rose 9.50 percentage points to 44.04%.
Price around the results
Profit fell as non-operating support faded
This was a consolidated quarter-on-quarter decline: revenue fell 3.96% to Rs 636.19 cr, while profit before tax dropped 60.30% to Rs 27.20 cr. Other income fell 88.59% to Rs 3.42 cr and represented 12.57% of pre-tax profit, making its reduction an important drag on earnings quality. Interest rose 16.00% to Rs 17.40 cr and depreciation increased 7.29% to Rs 37.68 cr, adding to the pressure below operating profit.
Operating margin slipped below the peer median
Expenses declined 2.86%, slower than the 3.96% fall in revenue, so operating margin narrowed 0.98 percentage points to 12.40%. Among 73 Commodities peers that have reported, SHK's margin was 2.23 percentage points below the 14.63% median and ranked 26th from the bottom. The sequential margin decline from 13.38% marks a weaker second quarter, although no year-on-year comparison is available here.
Management is focusing on integration and cost control
Management said its priority is to bring its creative, technical and manufacturing capabilities together to improve responsiveness, execution and commercial growth. The presentation said SHK's long-term vision is to build Keva into a globally competitive, technology-led Fragrance and Flavour company, with expansion into new geographies as confidence in its capabilities develops. Management also highlighted operational efficiencies, cost optimisation and margin protection, while saying Global Ingredients faced near-term export pressure and volatility in supply chains and commodity markets.
Results were filed after the market close
The results were filed after market close on 02 Nov 2026. The next market session will provide the post-results stock reaction, while the quarter's reported focus remains the recovery of operating margin from 12.40%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹636 cr | ₹662 cr | -3.96% |
| Other income | ₹3 cr | ₹30 cr | -88.59% |
| Expenses | ₹557 cr | ₹574 cr | -2.86% |
| Operating profit | ₹79 cr | ₹89 cr | -11.05% |
| Operating margin (%) | 12.40% | 13.38% | — |
| Interest | ₹17 cr | ₹15 cr | +16.00% |
| Depreciation | ₹38 cr | ₹35 cr | +7.29% |
| Profit before tax | ₹27 cr | ₹69 cr | -60.30% |
| Tax | ₹12 cr | ₹24 cr | -49.39% |
| Net profit | ₹15 cr | ₹45 cr | -67.95% |
| EPS (₹) | ₹1.05 | ₹3.28 | -67.99% |
Operating margin of 12.40% compares with a Commodities sector median of 14.63% across 73 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company’s priority is to integrate its creative, technical and manufacturing capabilities to improve responsiveness, execution and commercial growth.
- SHK’s long-term vision is to build Keva into a globally competitive, technology-led Fragrance and Flavour company.
Expansion
- The company plans to expand into new geographies as it builds confidence in its capabilities.
New initiatives
- SHK is continuing research into proprietary molecules, formulation technologies and sustainable ingredients.
- The company is focusing on operational efficiencies, cost optimisation and margin protection.
Problems & risks
- Global Ingredients faced near-term export headwinds that affected performance.
- Global Ingredients operated amid volatility across global supply chains and commodity markets.
- The business managed procurement and inventory levels amid ongoing uncertainties.
What to watch
- Whether operating margin moves back above 13.38% after falling to 12.40%.
- Whether revenue improves from Rs 636.19 cr while expenses remain below Rs 557.33 cr.
- Whether the tax rate declines from 44.04% and interest from Rs 17.40 cr.