Hikal Ltd share Price Today

Hikal is predominantly a B2B player that provides intermediates and active ingredients to global pharmaceutical, animal health, crop protection and specialty chemical companies.

• Pharma & crop protection comprise 54% & 46% of sales, respectively. Pharma business (including animal healthcare) is currently divided into 60:40 ratio between APIs and CDMO
• In crop protection, ~70% of sales are derived from CDMO while remaining is from proprietary products, specialty chemicals & specialty biocides
• One of the largest suppliers of Gabapentin API (CNS). In crop protection, one of the largest suppliers of Thiabendazole (TBZ)

CDMO project supported the pharma business, margins suffer due to high input costs.

• Revenue increased 5% YoY to ₹ 540.2 crore
• EBITDA margins fell 425 YoY bps to 13.8%, steep increase in prices of solvents and utilities impacted the operational performance
• Adjusted PAT declined 41.5% YoY at ₹ 26.4 crore

Pharmaceuticals company Hikal announced FY24 results:

Financial Highlights:

• Revenue of Rs 1,785 crore
• EBITDA stood at Rs 267 crore
• PAT stood at Rs 70 crores
• Recommended a final dividend of Rs 0.60 per share (30% of FV); Total dividend for FY24 stands at Rs 1.2 per share (60% of FV)
• Hikal’s long term credit rating is maintained at A by ICRA

Commenting on the results, Jai Hiremath, Executive Chairman, Hikal said, “For the FY24, we achieved revenues of Rs 1,785 Crores as compared to Rs 2,023 Crores last year. FY24 was marred with several global macroeconomic pressures and depressed market conditions for the global chemical sector on account of inventory build up and overcapacity across the sector resulting in intense price competition from China predominantly in the Crop Protection market.

Our Board of Directors has recommended a final dividend of Rs 0.60 per share (30%). Along with an interim dividend of Rs 0.60 per share (30%) declared in February 2024, the total dividend for FY24 stands at Rs 1.20 per share (60% of FV).

For Q4FY24, our pharmaceutical business reported revenue growth of 26% to Rs 338 Cr and EBIT growth of 191% to Rs 54 Cr, on QoQ basis. In the API segment, we witnessed increased volume off-take based on higher demand from existing customers and from newer geographies. This coupled with stabilized raw material prices have supported us in maintaining our margin profile. In our CDMO segment we have received several RFP’s from both emerging pharma and global innovators, with several products progressing through the development stages. We have a healthy pipeline of projects in the early to mid-phase that is encouraging. During FY24, our API facility in Panoli, Gujarat, was audited by the US FDA, and the audit was concluded with ‘Zero’ 483 observations as a testament of our commitment to high standards of regulatory compliance.

For Q4FY24, our crop protection business reported revenue of Rs 177 Cr and EBIT of Rs 14 Cr. Despite proactive cost improvement initiatives, the global crop protection industry continues to face significant headwinds, including subdued global demand due to inventory in the channel pipeline and intense price erosion from competitors primarily China as a result of large capacity which are under-utilized. We expect the market to stabilize post the end of this financial year and recovery to begin thereafter.

In our animal health business, advancements in developing a portfolio of products under a long-term agreement with an innovator animal health company are proceeding well. During the third quarter, our new multipurpose animal health facility was commissioned at Panoli, Gujarat. Validation of several products is underway, and it is scheduled to be completed in the upcoming quarters. These validation batches mark the initial phase toward product registration and subsequent commercialization.

Under our strategic transformation initiative - Pinnacle, we have taken substantial strides toward sustaining growth across our various businesses. We have gained momentum in supply chain derisking, developing differentiated capabilities, the acquisition of new customers and the building of a distinctive technology platform. As we navigate through the next stage of our strategic plan, our focus is directed more towards the front-end capitalizing on the opportunities to build a healthy pipeline for our businesses.

Despite the current challenging global conditions, we anticipate a favorable shift in market dynamics over the mid to long term, and we remain focused in our strategy to deliver profitable, and sustainable growth across our businesses.”

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