SH Kelkar hits 52-week high on Anhui acquisition, advances 50% in four days

Shares of S H Kelkar and Company moved higher by 14 per cent to Rs 138.35 on the BSE in the intra-day trade on Tuesday after the company, through Keva Singapore, completed acquisition of remaining 23.3 per cent equity stake in Anhui Ruibang Aroma Company (Anhui).

Headquartered in Fuyang, Anhui is a leading aroma ingredient company in China having tonalid manufacturing facility. During the financial year 2019-20, Anhui registered an operating revenue of Rs 34.92 crore and a profit after tax of Rs 0.51 crore.

On August 1, 2018, S H Kelkar had acquired 66.7 per cent stake in Anhui for Rs 26.55 crore. The promoters of Anhui, from whom Keva Singapore has acquired 90 per cent stake, shall continue to hold 10 per cent stake in Anhui, the company said in a regulatory filing. READ HERE

The stock of the fragrance and flavour company hit a fresh 52-week high today. It has surged 50 per cent in the past four trading days after the company reported strong operational performance in September quarter (Q2FY21).

In Q2FY21, the company's standalone operating EBITDA (earnings before interest, taxes, depreciation, and amortization) margin expanded to 21.4 per cent from 13.9 per cent in Q2FY20.

The company's net profit more-than-doubled to Rs 53.8 crore in Q2FY21 from Rs 15.0 crore in Q2FY20. Total operating income also grew 26.9 per cent year-on-year at Rs 355 crore as against Rs 279 crore in the corresponding quarter of the previous fiscal.

"Better product mix and higher operating leverage resulted in improved profitability performance during the quarter. In addition, a stable raw material environment and cost optimization measures executed over the last few quarters further enhanced margins. The company believes healthy margins level going forward due to improved cost efficiencies and a stable raw material environment," the management said in a statement.

The company further said it witnessed improved traction in terms of order enquiries and leads from new and existing large and mid-sized fast moving consumer goods (FMCG) customers during the quarter. Business wins across domestic and international markets also remained robust. A normalized operating environment along with stable raw material environment and several cost optimization measures undertaken in the past should enable the Company to deliver a healthy and sustainable performance in the longer-term, it said.