S H Kelkar and Company Ltd Management's Take

• 📈 9M FY2026 revenue rose 10.4% YoY to ₹1,718 crore; Fragrance division grew 8.9%, Flavour division up 37.9%, Global Ingredients declined 13%.
• 💰 EBITDA at ₹182 crore (10.6% margin), adjusted ₹240 crore (14% margin) considering external impacts; gross profit margin steady at 42.3%.
• 🌐 Geographic revenue split: 57% India, 24% Europe, 19% other international; expansion focus on US, UK, Germany.
• 🏭 New European facility slated for Q4 FY2026/Q1 FY2027; ₹70-80 crore domestic investments planned in Maharashtra.
• 🔮 Targeting 12% long-term revenue CAGR with EBITDA margin recovery to ~17% in next two years.
• ⚠️ Insurance claim of ~₹100 crore underway due to Maharashtra fire; increased premiums impacting profit.
• 📉 European segment faced temporary downturn due to order timings and geopolitical factors; rebound expected.
• 📊 Current international investments anticipated to take 2-3 years to generate notable cash flow and revenues.

📊 Financial Performance Highlights

• Consolidated revenue for 9M FY2026 was ₹1,718 crore, reflecting a 10.4% year-over-year increase.
• Reported EBITDA stood at ₹182 crore with a margin of 10.6%; adjusted EBITDA, excluding external impacts, was ₹240 crore (14% margin).
• Gross profit margin has been resilient at 42.3%, though currency fluctuations have exerted margin pressure.

🌿 Operational Divisions Performance

• Fragrance Division continues as the main revenue contributor with ₹1,488 crore, marking 8.9% growth.
• Flavour Division demonstrated strong growth of 37.9% YoY to ₹177 crore, driven by robust international and domestic demand.
• Global Ingredients faced a 13% revenue decline attributed to ongoing geopolitical challenges.

💼 Geographic and Market Expansion

• Revenue distribution: 57% India, 24% Europe, and 19% other international markets.
• Strategic focus on growth markets including the US, UK, and Germany.
• Significant milestone achieved with the US Creative Development Centre receiving its first order, marking entry into the US fragrance market.

🚀 Future Outlook and Capital Expenditure Plans

• Company currently in an investment phase targeting a long-term revenue CAGR of 12%.
• Plans include expanding production capacity and Creative Development Centres globally.
• A new European facility is expected to commence operations by Q4 FY2026 or Q1 FY2027.
• Domestic capital investments of ₹70-80 crore planned for Maharashtra facilities over the next 12 to 18 months.
• EBITDA margins projected to recover to approximately 17% in the next two years owing to operational efficiencies and new investments.

⚠️ Risks and Management Considerations

• An insurance claim of around ₹100 crore is underway related to a fire incident at the Maharashtra site, with settlement expected within 6-12 months.
• Increased insurance premiums (~₹13.5 crore higher) have adversely affected profit margins.
• A temporary downturn was seen in European sales due to order timing and geopolitical factors, though a rebound is anticipated.
• Current global market expansions in the USA, UK, and Europe may take 2-3 years before generating significant cash flow or revenue contributions.
• A pledge of 10 lakh shares was clarified as linked to fluctuations in market price influencing loan terms, rather than new loan acquisition.