Buy S H Kelkar and Co.; target of Rs 298: Motilal Oswal

It seems that nationwide lockdown has not much impacted the fertilizer sector. In May 2020, the Indian Fertiliser industry has witness sales growth of 25% to 5 million tonnes as compared to 4 million tonnes in the same month last year.  Coromandel International and Chambal Fertilisers have seen major sales growth in the sector. The research firm Prabhudas Lilladher is bullish on 5 stocks in the sector and among that they expect stock Insecticides India may see the upside of 82 percent, report dated June 09, 2020.

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26 Aug, 2025 12:21

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Motilal Oswal's research report onS H Kelkar and Co.

Fragrance business, which contributed 87% of total revenues, reported de-growth of 8.6% YoY (on account of lower off take in the FMCG sector due to GST rollout), leading to a decline of 12% YoY in domestic revenues. 1QFY18 also witnessed a decline of 45% YoY in service income to INR88m. However, the industry is expected to witness recovery in consumer demand, the impact of which is expected to be seen from 3QFY18.

We believe the company will revive from the transitional effect of GST and get back on the growth track. However, the impact of costcutting measures and recovery post GST will not be witnessed before 2HFY18. Hence, we cut our earnings estimates by 8%/4% for FY18/FY19, and expect SHK to post revenue and PAT CAGR of 12% and 17%, respectively, over FY17-19E. We maintain Buy with a target price of INR 298 (30x FY19E EPS).

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