S H Kelkar and Company Limited, India’s largest homegrown fragrance and flavour player, reported solid top-line growth for FY2026 even as profitability came under pressure due to cost headwinds and portfolio optimisation initiatives.

 

For the full year ended March 31, 2026, the company posted revenue from operations of Rs. 2,368 crore, up 11.5% from Rs. 2,123 crore in FY25. However, adjusted EBITDA declined to Rs. 323 crore from ₹335 crore, with margins slipping to 13.9% from 15.9%.

 

In the fourth quarter, momentum remained strong on the revenue front. Q4 FY26 revenue rose 14.6% year-on-year to Rs.b650 crore from Rs. 567 crore in Q4 FY25. Adjusted EBITDA inched up to Rs. 83 crore from Rs. 82 crore, though margins softened to 13.5% from 14.6%.

 

The company noted that revenues included a one-off Rs. 35 crore sale linked to a portfolio optimisation exercise. Adjusted EBITDA excludes other income, new initiatives, and incremental insurance costs.

 

Commenting on the performance, management highlighted steady demand and ongoing strategic investments aimed at long-term growth.

 

Kedar Vaze, Whole Time Director & CEO at SH Kelkar and Company Ltd. said: "We delivered healthy revenue growth during FY2026 despite a dynamic operating environment. The performance was supported by sustained demand across key customer segments, continued momentum in the domestic business, and stable performance in our European operations.

 

"Over the past year, we have remained focused on strengthening the building blocks for the next phase of growth. Our investments towards expanding capacities, enhancing our global Creative Development Centres, and deepening customer engagement capabilities are progressing well and are aligned with our long-term strategic priorities. 

 

"We believe these initiatives will further strengthen our ability to drive innovation-led growth across markets."

 

He added: "The broader environment continues to remain fluid, influenced by evolving geopolitical developments and supply-side dynamics globally. Within this operating landscape, our strong customer relationships, diversified presence, and continued focus on strategic priorities provide a solid foundation to navigate near-term uncertainties and capitalise on emerging opportunities.”

 

On the financial and cost outlook, the company flagged emerging pressure from raw material inflation and supply-chain volatility.

 

Jagdish Agarwal, Group Chief Financial Officer at SH Kelkar and Company Ltd. said: “During Q4 FY2026, the Company delivered encouraging revenue growth, supported by steady performance across both the Fragrance and Flavour segments. Gross margins remained broadly steady on a sequential basis, adjusted for one-off sales of few low-margin products undertaken as part of a portfolio optimization exercise..

 

"The operating environment remains dynamic, with raw material prices rising on account of geopolitical developments in the Middle East and evolving supply-side conditions. While the current quarter did not see a meaningful impact from these cost pressures, supported by existing inventory coverage, the impact may be visible in the coming quarters. 

 

"We are actively working on appropriate pricing measures, cost optimisation initiatives, and a disciplined business mix to protect margins. Given the uncertain supply environment, maintaining adequate coverage for select commodities may result in higher inventory levels in the near term. Our longer-term focus remains on improving the cash conversion cycle, strengthening internal accruals, and reducing debt."