S H Kelkar Reports Flat FY26 Profit Amid Q4 Plunge, Appoints New Auditors

S H Kelkar and Company Ltd announced its audited financial results for the fiscal year ended March 31, 2026. While revenue climbed 11.5% to ₹2,368.26 crore, the company's full-year profit after tax (PAT) remained nearly flat at ₹73.01 crore compared to ₹73.24 crore in FY25. The fourth quarter (Q4 FY26) saw PAT plummet to ₹1.80 crore from ₹102.51 crore in the prior year's quarter, which had included significant one-time gains.

This means the annual profit held steady despite strong revenue growth, but the Q4 comparison appears stark due to prior year exceptional items.

Key Filings and Changes

S H Kelkar's Board approved the consolidated FY26 financials on May 15, 2026.

Full-year revenue rose 11.5% to ₹2,368.26 crore, with PAT stable at ₹73.01 crore.

Q4 FY26 revenue grew 14.5% to ₹649.94 crore, though PAT fell sharply to ₹1.80 crore.

The company appointed BSR & Co. LLP as its new statutory auditors for a five-year term, succeeding Deloitte Haskins & Sells LLP.

An unmodified audit opinion was received on the results.

The 70th Annual General Meeting (AGM) is scheduled for July 31, 2026.

Investor Impact

The flat annual profit despite revenue growth suggests potential cost pressures or areas needing operational review.

The drastic Q4 PAT drop, even against a high-base year, requires investor attention to understand ongoing profitability.

The appointment of a new auditor may bring fresh scrutiny and a different perspective on financial reporting.

Company Overview

S H Kelkar is a significant player in India's fragrance and flavour industry, serving major FMCG companies.

S H Kelkar's Q4 FY25 results included a substantial one-time gain. This made the Q4 FY26 PAT comparison appear sharply negative and did not reflect ongoing operational profitability.

The company has previously navigated periods of mixed financial performance, influenced by fluctuating input costs.

What's New

Shareholders will observe an annual profit that has stagnated despite topline growth.

The company transitions to BSR & Co. LLP for statutory audits, a firm affiliated with the Big Four, for the next five years.

The stark difference in Q4 performance highlights the unusual nature of the prior year's comparative figures.

Shareholder approval for the auditor appointment will be sought at the AGM on July 31, 2026.

Potential Risks

The severe Q4 PAT decline, seen against an exceptionally high base in Q4 FY25 due to one-time gains, requires clarification on underlying operational profitability.

Dependence on raw material price fluctuations and demand cycles within the FMCG sector presents ongoing industry risk.

Potential scrutiny from new auditors on specific accounting policies or internal controls.

Competitor Landscape

Key peers in the fragrance and aroma chemical sector include Privi Speciality Chemicals and Oriental Aromatics.

While S H Kelkar's FY26 PAT was flat, competitors like Privi Speciality Chemicals have reported robust revenue growth, although they also face sensitivity to raw material prices.

Financial Highlights

• Consolidated Revenue: Grew 11.5% to ₹2,368.26 crore in FY26 from ₹2,123.40 crore in FY25.
• Consolidated Profit After Tax (PAT): Remained nearly flat at ₹73.01 crore in FY26, compared to ₹73.24 crore in FY25.
• Q4 FY26 Consolidated Revenue: Rose 14.5% to ₹649.94 crore from ₹567.38 crore in Q4 FY25.
• Q4 FY26 Consolidated PAT: Plunged 98.2% to ₹1.80 crore from an exceptionally high ₹102.51 crore in Q4 FY25, which included one-off items.

Looking Ahead

Management commentary or disclosures explaining the Q4 PAT comparison against the prior year's base.

The agenda and discussions at the upcoming 70th Annual General Meeting.

Performance trends under the new auditors in subsequent quarters.

Management's strategies to address cost pressures and enhance profitability.

Any specific changes in audit findings or focus areas from BSR & Co. LLP.