Kotak Institutional maintains buy on SH Kelkar & Co, revises target to Rs 160

Kotak Institutional Equities has maintained long term buy rating on SH Kelkar and Company and revised fair value to Rs 160 from Rs 190. The stock ended flat at Rs 117.75 on Friday.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 271.53 crore, up 1.10 % from last quarter sales of Rs 268.57 crore and up 15.06 % from last year same quarter sales of Rs 235.98 crore. The company has reported net profit after tax of Rs 18.98 crore in latest quarter.


Investment Rationale

SH Kelkar operates in what is a pretty nice, steady industry globally, said Kotak Institutional. Being sub-scale may mean higher volatility for SH Kelkar than what one generally sees for the global flavour and fragrance majors; however, the brokerage said the degree of volatility in the past couple of years was surprising. Valuations aren’t particularly demanding but need the support of consistent earnings delivery, the brokerage said.