Kotak reinitiates coverage on SH Kelkar with 'buy' tag, sees 54% upside on strong revenue growth

Over the past 12 months, shares of the fragrance player surged 86 percent, outperforming the frontline index Nifty 50.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Supplier of flavors and fragrances, specialty chemicals player SH Kelkar's share price soared 17 percent in trade after Kotak Institutional Equities suggested that the counter could see a whopping 54 percent upside from current levels.

"SH Kelkar is starting to make inroads into the massive global market, as demonstrated by its recent empanelment by FMCG giant Unilever. We believe SHK is well-placed to drive double-digit revenue growth accompanied by margin expansion and healthy cash," said the brokerage.

As a result, Kotak reinitiated coverage on the firm with a 'buy' rating, assigning a fair value of Rs 400 per share, implying an upside of around 54 percent.

At 2.45 pm, SH Kelkar's share price jumped 17.5 percent on the NSE to quote Rs 301.75 per share compared to the previous close.

Follow our market blog to catch all the live updates

Kotak sees a long runway for growth for SHK, given its established and sticky relationships in the growing Indian market as well as its growing footprint in Europe, Southeast Asia and the US.

"We also see potential for margin expansion driven by growth in higher-margin geographies (e.g., Europe) and operating leverage, as well as strong cash flows given a business model light on fixed assets," added the brokerage.

The large order win from global FMCG giant Unilever bolsters confidence in management guidance for 12 percent+ revenue growth for the next few years. Additionally, operating leverage should mean expanding EBITDA margins—the company has already created substantial surplus capacity, meaning that capex needs will be limited.

Over the past 12 months, shares of the fragrance player surged 86 percent, outperforming the frontline index Nifty 50 by a large margin.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.