The Company's results by reporting segment showed Income from operations for Fragrance at Rs 226.9 crore, down by 11% comprising 89% of total sales and Flavours segment at Rs 27.61 crore, up by 2% comprising 11% of total sales.

Operating margin of the company fell 500 bps to 15.1%. Operating profit as a result decreased 32% to Rs 38.36 crore. Cost of material consumed as a percentage of net sales (net of stock adjustment) rose 500 bps to 57.5% while Employee benefit expense fell 60 bps to 11.5%. Other expenses increased 230 bps to 16.9%.

Other income rose 313% to Rs 6.6 crore while interest cost increased 532% to Rs 4.49 crore while depreciation rose 52% to Rs 8.86 crore. PBT before EO was down 39% to Rs 31.61 crore.

The company had nil EO items during the quarter compared to EO expense of Rs 10.07 crore in Q2FY18 related to termination cost in relation to its restructuring its operation at PFW Aroma Ingredients, Netherlands. PBT after EO fell 24% to Rs 31.61 crore.

Effective tax rate decreased 220 bps to 32.5% leading 22% decrease in PAT to Rs 21.33 crore. Considering share of profit or loss in associate and JV, Bottomline decreased 21% to Rs 21.39 crore.

For 9MFY'19 S H Kelkar reported 5% increase in its consolidated net sales to Rs 774.72 crore compared to corresponding previous year period while net profit of the company was down 5% to Rs 68.9 crore compared to 9MFY'18.

Operating margin fell 410 bps to 13.9%. Operating profit as a result decreased 19% to Rs 108.02 crore.

Other income increased 87% to Rs 15.93 crore while interest cost increased 232% to Rs 7.89 crore while depreciation was up 34% to Rs 23.21 crore. PBT before EO was down 24% to Rs 92.85 crore. The company had nil EO items compared to net EO expense of Rs 10.07 crore. PBT after EO fell 17% to Rs 92.85 crore.

Effective tax rate decreased 760 bps to 27.1% leading 7% decrease in PAT to Rs 67.69 crore. Considering share of profit or loss in associate and JV, Bottomline decreased 5% to Rs 68.9 crore.

Commenting on the performance, Mr. Kedar Vaze, Whole Time Director and Group CEO at SH Kelkar and Company said, "Over the last 3 years, since the listing of our Company, the business has undergone three high-intensity market disruptions which include Demonetization, GST implementation, and the recent raw material shortage event. However, SHK's business model and the financial parameters have held strong, enabling the underlying core business to still report gross margins in the range of 43-45% and EBITDA margins within the range 17-20%.

While we witnessed an uptick in consumer demand in the months of October and November during the quarter, the sales performance in the month of December was far below our expectations. The business delivered subdued performance in the domestic segment, especially in certain categories which witnessed a transitory slow-down due to delays in GST refund leading to uncertainty among certain customers. As things get more streamlined, we anticipate business in this segment to recover. Despite this operating environment, our client base remained intact and we witnessed a healthy pace of new client wins during Q3, so we expect the scenario to normalize going forward.

We continue to focus towards enhancing our operational capabilities and are rationalizing costs across business parameters. We believe, in the longer term, this will help bring in higher business efficiencies, and assist us to bounce back strongly when we see normalization of operating parameters. Simultaneously, we are also focusing on optimizing our Greenfield manufacturing facility at Mahad. On the whole, we are confident of delivering improved results as a revival in macros coupled with our strategic initiatives towards strengthening our product offerings and cost saving measures should help augment business performance from FY 2020 onwards."

The scrip is currently trading at Rs 163