S H Kelkar and Company Limited

12%

results document. During the first half of FY 2026, we reported consolidated revenue growth of 12% year-on-year, driven by steady demand across all our core categories, continued traction with both

Rs. 32 crore

also the ongoing investments made to strengthen our growth ambitions in new geographies. In total, Rs. 32 crore was invested in new initiatives during the first half. Further Rs. 7 crore were incurred additiona

Rs. 7 crore

geographies. In total, Rs. 32 crore was invested in new initiatives during the first half. Further Rs. 7 crore were incurred additional insurance costs during this period. Adjusted for this, our EBITDA margi

14.5%

red additional insurance costs during this period. Adjusted for this, our EBITDA margin stood at 14.5%, broadly comparable to the 14.4% in the H2 FY '25. We believe these investments in expanding our c

14.4%

ing this period. Adjusted for this, our EBITDA margin stood at 14.5%, broadly comparable to the 14.4% in the H2 FY '25. We believe these investments in expanding our creative centers and capacity enha

Rs. 17

e margins. The second quarter, we have seen a much bigger impact on margins. Kedar Vaze: About Rs. 17-odd crore. Jatin Chawla: Okay. And this additional insurance cost, INR7 crore was largely again

INR7 crore

Kedar Vaze: About Rs. 17-odd crore. Jatin Chawla: Okay. And this additional insurance cost, INR7 crore was largely again in 2Q only? Kedar Vaze: No, this is again for the half, quarter 1 and quarte

rs,

he second half also? Kedar Vaze: That is correct. Jatin Chawla: And on the development centers, you mentioned India, U.S. and Europe. So earlier, I think you were talking only about India and Eur

15%

be a very small value. So, the Fragrances that you supply. So, do they really care so much about 15%, 20% tariff on that kind of a product? No. So, it is not only about tariff. It is also the fact t

20%

very small value. So, the Fragrances that you supply. So, do they really care so much about 15%, 20% tariff on that kind of a product? No. So, it is not only about tariff. It is also the fact that w

11%

m what you are saying, it seems second half and as we head into FY '27, should we expect that this 11%, 12% growth rate will further improve on the back of some traction with the global MNC account and

45%

the benefit does come in, what sort of gross margin improvement do you expect? So, we went from 45% to 39%. We are somewhere around 42.5% for this half. Things will improve from here further 1%, I t

“The Fragrance business sustained its growth momentum, supported by stronger relationships, particularly with small and midsized clients, and the Flavour Q2 & H1 FY26 Concall Transcript division delivered healthy performance across the board, both in domestic as well as export markets.”

“With market sentiment gradually improving and new capacity additions nearing completion, performance in this region is again expected to strengthen in the next year.”

“As these initiatives contribute to our performance over the next 15 to 18 months, we expect margins and profitability to substantially improve.”

“We are confident that this commitment to innovation will be central for our next phase of growth.”

“Global MNC account and also, we anticipate good domestic business momentum in the U.S.”

“My sense was that this is for a client in their product, this will be a very small value.”

“We expect second half, we will see some more traction, it is typical how things have been evolving with the larger accounts.”

“What I was saying was, so from what you are saying, it seems second half and as we head into FY '27, should we expect that this 11%, 12% growth rate will further improve on the back of some traction with the global MNC account and the development centers that you have created in India, U.S.”

“So, we expect second half to be better than the first half.”

“So, when the benefit does come in, what sort of gross margin improvement do you expect?”

Kedar Vaze

48

Moderator

10

Madhav Marda

10

Jatin Chawla

5

Debanjana C

5

Manoj Bagadia

5

Abhijit Akella

2

Bharat Gupta

2

Henil Bagadia

2

Anoop Poojari

1

Anoop Poojari

Thank you. Good evening, everyone, and thank you for joining us on S H Kelkar and Company Limited's Q2 and H1 FY 2026 Earnings Conference Call. We have with us Mr. Kedar Vaze, Whole-Time Director and Group CEO; and Mr. B. Ramakrishnan, CEO, Fragrances, Asia and U.S.A. of the company. We will begin the call with opening remarks from the management, following which we will have the forum open for a question-and-answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Kedar to make his opening remarks.

Kedar Vaze

Hi. Good evening, everyone, and thank you for joining us today at our quarter 2 and H1 FY '26 earnings call. I trust that you have a chance to review the results document. During the first half of FY 2026, we reported consolidated revenue growth of 12% year-on-year, driven by steady demand across all our core categories, continued traction with both existing and new customers. The Fragrance business sustained its growth momentum, supported by stronger relationships, particularly with small and midsized clients, and the Flavour Q2 & H1 FY26 Concall Transcript division delivered healthy performance across the board, both in domestic as well as export markets. is progressing as scheduled and In the European Fragrance business, the business environment remained soft, and therefore, sales were muted in the first half. The brownfield expansion in the Netherlands is expected to be commissioned by end of the fiscal year. Once operational, it will help address capacity bottlenecks and improve c

Jatin Chawla

With that, I would now request the moderator to open the floor for questions. Thank you. Thank you very much. We will now begin with the question-and-answer session. The first question is from the line of Jatin Chawla from RTL Investments. Please go ahead. Good evening and thanks for the opportunity. Yes. I have a few questions. So, the first one is this Rs. 32 crore amount that you quantified for investment in new initiatives, that is for the first half, right? What is the amount for the second quarter? Just to get a sense on the margins. The second quarter, we have seen a much bigger impact on margins.

Jatin Chawla

And on the development centers, you mentioned India, U.S. and Europe. So earlier, I think you were talking only about India and Europe. So, U.S. is a new initiative?

Kedar Vaze

Yes, U.S. is a new initiative. Europe, we have already done. U.S. has been sort of operationalized. That is why I mentioned it specifically this time around.

Kedar Vaze

And this investment in U.S., is it again to kind of further penetrate deeper into our global MNC account? Or is this for some new clients that you are targeting in the U.S. market? Global MNC account and also, we anticipate good domestic business momentum in the U.S. due to the tariffs. So, we are focused on U.S. market and manufacturing within U.S. as a quick turnaround.