SHK Q4 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹650 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹83 Cr
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
SH Kelkar reported Q4 FY26 adjusted EBITDA of Rs 83 crore at 13.5% margin, with approximately Rs 35 crore of one-time low/negative margin product liquidation impacting results. The company is navigating a highly dynamic raw material environment where 40% of inputs are directly crude-linked, with material prices up 12-13%+ across the board. Management has taken structural steps to exit approximately Rs 50 crore of structurally low-margin business to protect portfolio quality. The Almare Netherlands Greenfield facility is now fully operational with ~Rs 10 million annual sales, while development centers in Germany, Manchester, and US represent Rs 80-85 crore annual investments with 3-4 year breakeven timelines. The Wasuli facility rebuild is delayed due to fire incident. Management expressed confidence in delivering Rs 300 crore+ EBITDA in FY27 with 10% annual debt reduction targets, though admitted the three-year outlook to 17% EBITDA margin has been deprioritized given near-term operational focus. FX contributed 3-3.5% to revenue growth. Key risk: raw material inflation could refract into Q1-Q2 results despite current inventory coverage, and the US market remains highly competitive with only Rs 1 million contracted business to date.
Colored figures show movement against the previous available record.
Guidance to track
- Management expressed confidence in recovering to FY25 EBITDA levels of Rs 300 crore+ in FY27, with strong first-half visibility and positive momentum from portfolio optimization and European capacity addition.
- Management is confident of maintaining adjusted EBITDA margin at current 13% levels through first half of FY27, supported by secured raw material inventory and confirmed price increases from large global accounts.
- Capital expenditure for FY27 expected at Rs 140 crore, front-loaded in first two quarters for completion of Wasuli facility and Vasuli factory commissioning, with Almare factory already operational.
- Management targets 10% annual debt reduction from current Rs 850 crore levels, though acknowledges potential near-term increase due to insurance receivables timing and inventory buildup for supply security.
Risks flagged
- Management acknowledged that current raw material cost increases (~12-13%+ across the board) may not have fully impacted Q4 due to existing inventory coverage but will refract into Q1-Q2 results. Citrus, crude derivatives, and operating costs like power/fuel all showing inflation.
- Analyst raised concern about Rs 550-600 crore total investment (Rs 350 crore capex + Rs 200 crore operating losses) with management admitting returns will take longer than 1-2 years and payback on US market specifically is 4 years. US market described as highly competitive relative to Europe.
- Fire incident at Wasuli facility forced unplanned Indian capex reinvestment, creating temporary setback in domestic operations. Full rebuild expected by next year with potential capacity gap in interim.
- Management deferred sharing the detailed plan to move from 13% to 17% EBITDA margin over two to three years that was promised in the prior quarter, citing changed priorities post-March 10th geopolitical developments and focus on near-term execution.
Key quotes
- We have also already seen business in the US upwards of 1 million contracted. So we are on track for these markets.
- We are talking about markets which are 20 to 25 times bigger than the Indian markets. So we will take time to build the capability and the market size but the growth runway is very very large.
- The environment post 7th or 10th of March has completely changed. So we are very much focused on ensuring the quarter-on-quarter delivery for the next few quarters rather than the longer-term strategy.
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