S H Kelkar and Company Ltd., a Fragrance and Flavours maker, shared the business update for Q1 FY21 with the exchanges on Monday.
As per the directives of the Central Government in response to the outbreak of the Covid-19 pandemic, SHK’s manufacturing units were temporarily shut in the month of April 2020.
Operations at all facilities resumed from April 27, 2020, onwards, though at lower utilization levels. This significantly affected production and sales in the domestic market for the months of April and May. The company witnessed encouraging demand pick-up from the last week of May continuing into June. Consequently, revenues in Q1FY21 stood between Rs 190 to 192 crores.
“Strong financial and operating discipline including maintaining a tight working capital cycle and adequate inventories enabled the company to seamlessly support its business commitments during this challenging period.
The initiatives to strengthen balance sheet continued during the quarter. The company has further reduced its net debt in Q1FY21 to between Rs 254 to 258 crores as on June 30, 2020 as against Rs 299 crores as on March 31, 2020,” company said.
“The management continues to very closely monitor the operating environment and actively engage with its customers to build demand. From June onwards, the company has been witnessing initial signs of recovery in the FMCG industry and a gradual normalization of the supply chain system. Accordingly, the Company is taking all necessary steps to ensure optimal production levels are maintained throughout the year,” it added.
While continuity of the market trend cannot be firmly ascertained at this time, the company is hopeful that the business flow will remain steady.
The company believes that once the operating situation is stabilized, it should be able to deliver revenue growth and revert to its normalized margins once again.