#SHKhelkar conducted their conference call today at 2:00 PM
"Expected to continue the momentum (~15% growth) and improve the margins"
Here are the key takeaways π
"Expected to continue the momentum (~15% growth) and improve the margins"
Here are the key takeaways π
Business Updates:
β’ All the segment grew well. Acquired new customer in the domestic market.
β’ Net debt reduce by 132cr owing to increase in CF.
β’ Did the acquisition of Nova in this quarter.
β’ Co. focus on improving the Cash Flow generation and strengthening Balance Sheet.
β’ All the segment grew well. Acquired new customer in the domestic market.
β’ Net debt reduce by 132cr owing to increase in CF.
β’ Did the acquisition of Nova in this quarter.
β’ Co. focus on improving the Cash Flow generation and strengthening Balance Sheet.
Domestic Market (Covid)
β’ All the domestic segment grew well, and there was no impact on customer side in domestic market.
β’ Covid did had little impact over the segment, however growth momentum again picked up.
β’ Expected to growth 12-13% over coming year.
β’ All the domestic segment grew well, and there was no impact on customer side in domestic market.
β’ Covid did had little impact over the segment, however growth momentum again picked up.
β’ Expected to growth 12-13% over coming year.
Fragrance Segment:
β’ Won some few mid and large size FMCG.
β’ Improving operating leverage resulted in higher profitability YoY basis.
β’ Domestic market has grown well, Europe remain major contributor of growth.
β’ Won some few mid and large size FMCG.
β’ Improving operating leverage resulted in higher profitability YoY basis.
β’ Domestic market has grown well, Europe remain major contributor of growth.
Flavour Market:
β’ Flavour market is expected to grow more than Fragrance market.
β’ Target remains 17-18% growth.
β’ Domestic and Europe market grew well in Q4.
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β’ Flavour market is expected to grow more than Fragrance market.
β’ Target remains 17-18% growth.
β’ Domestic and Europe market grew well in Q4.
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Nova Fragranze:
β’ SH has some internal sales, while incremental sales of the company stands around 10-12cr.
β’ Nova shares relatively higher margins and growth is expected to come in coming year.
β’ Effective from this quarter.
β’ SH has some internal sales, while incremental sales of the company stands around 10-12cr.
β’ Nova shares relatively higher margins and growth is expected to come in coming year.
β’ Effective from this quarter.
Write off:
β’ There are certain project which didn't worked well for the company, which has been written off.
β’ While there certain other new project, SH is working on increasing the CWIP.
β’ Certain write off expense will be carried to next year.
β’ There are certain project which didn't worked well for the company, which has been written off.
β’ While there certain other new project, SH is working on increasing the CWIP.
β’ Certain write off expense will be carried to next year.
CFF Segment:
β’ CFF segment grew at around 7-8% and is expected to grow well in Italy market.
β’ Target remains 9-10% growth over coming years (including Nova sales)
β’ CFF segment grew at around 7-8% and is expected to grow well in Italy market.
β’ Target remains 9-10% growth over coming years (including Nova sales)
Future Focus:
β’ Company has done enough capex in past and now focus remains on increasing the growth of company.
β’ With increasing volume margins is expected to be improve. Gross Margins target of 45% over next 5 year.
β’ R&D expense will increase as increase in margin.
β’ Company has done enough capex in past and now focus remains on increasing the growth of company.
β’ With increasing volume margins is expected to be improve. Gross Margins target of 45% over next 5 year.
β’ R&D expense will increase as increase in margin.
Isobionics:
β’ Sandalwood oil is unique product. Typically trees take 15-16 years and there is risk of bio-diversity.
β’ With this SH has tied up with Santalol, which is made other organic product.
β’ Guideline: 25 cr with 10% margin, and 7-8% net margin.
β’ Sandalwood oil is unique product. Typically trees take 15-16 years and there is risk of bio-diversity.
β’ With this SH has tied up with Santalol, which is made other organic product.
β’ Guideline: 25 cr with 10% margin, and 7-8% net margin.
Debt:
β’ In coming 2-3 years co. would be looking much on becoming debt free. However target remains to generate enough CF to be net debt positive.
β’ If co. dont find any good good acquisition, then there would be focus on reducing the debt.
β’ Much of the debt is at lower rate.
β’ In coming 2-3 years co. would be looking much on becoming debt free. However target remains to generate enough CF to be net debt positive.
β’ If co. dont find any good good acquisition, then there would be focus on reducing the debt.
β’ Much of the debt is at lower rate.
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