Conference Call with Hikal Ltd. Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Pharmaceuticals company Hikal announced Q1FY25 results: Revenue of Rs 407 crore EBITDA stood at Rs 58 crore PAT stood at Rs 5 crore Hikal’s long term credit rating is maintained at A+ by ICRA Pharmaceuticals: Revenue Stood at Rs 229 crore Demand for Own Products is robust DMF for 1 product filed during quarter 13 customer audits completed successfully during the quarter In the last 2 quarters have received a growing number of inquiries EBIT Stood at Rs 9 crore A combination of product mix and scheduled plant maintenance shutdowns leading to lower capacity utilization affected our margins Crop-protection: Revenue Stood at Rs 177 crore Positive traction from several major global innovators in Q1FY25 6 CDMO Projects in Pipeline Commercialization of the new products developed in last 2-3 years resulted in revenue growth in CDMO business Own products witnessed volume uptick EBIT stood at Rs 21 crore Favorable product mix led to an increase in margins year on year Global crop protection industry facing challenges: overcapacity and price pressure from competitors, especially China. Commenting on the results, Jai Hiremath, Executive Chairman, Hikal said, “The global chemical industry is experiencing a recovery in demand, with a steady improvement in consumption, production and capacity utilization. We expect prices to stabilize in the coming quarters. In Q1FY25, our revenues reached Rs 407 Cr, with an EBITDA of Rs 58 Cr representing a 5% and 16% growth respectively. This financial improvement was driven by stable raw material prices, as well as our efforts in reducing costs, optimizing processes and diversifying our product range. In Q1FY25, our pharmaceutical business generated revenue of Rs 229 Cr, with an EBIT of 3.8%. While we saw an increase in volume demand from existing customers in the API segment, a combination of product mix and scheduled plant maintenance shutdowns leading to lower capacity utilization affected our margins. In the CDMO segment, we continue to receive multiple requests for proposals from emerging pharmaceutical companies and global innovators. Several projects are progressing through to advanced development stages. We have a healthy pipeline of projects in various stages of development. In Q1FY25, our crop protection business generated revenue of Rs 177 Cr, with an EBIT of 11.9%. While the crop protection market is still challenging, we had a favorable product which led to an increase in margins year on year. With the global crop protection industry facing challenges such as overcapacity and price pressure from competitors, particularly from China, we expect the market to stabilize by the end of this calendar year with volumes recovery. Our animal health business has made significant progress. We have completed the development and validation of five products and are currently on track to finish validating several others by the end of this year. This marks a crucial milestone towards obtaining product registration and eventually launching them commercially in global markets. Under our strategic transformation initiative, Pinnacle, we have achieved significant strides in sustaining growth across our different business segments. We have focused on reducing risks in our supply chain, developing unique capabilities, acquiring new customers, and building a distinctive technology platform. As we move forward with our strategic plan, we will prioritize front-end opportunities to build and commercialize a robust pipeline across business segments. Despite ongoing global challenges, we are confident that market conditions will improve in this financial year. Our primary objective is to achieve profitable and sustainable growth in all our business segments. We are committed to adapting our strategies to meet changing market conditions and to capitalize on the growing list of emerging opportunities.” Result PDF