Conference Call with Hikal Management and Analysts on Q4FY24 Performance and Outlook. Listen to the full earnings transcript.
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.” Result PDF
Pharmaceuticals company Hikal announced Q3FY24 results: Financial Highlights Revenue: Revenue for the quarter was reported at Rs 448 crore, marking a sequential growth of 3% from the previous quarter. EBITDA: Earnings before interest, tax, depreciation, and amortization (EBITDA) stood at Rs 65 crore. This represents a 13% increase on a quarter-over-quarter basis. PAT: Profit after tax (PAT) reached Rs 16 crore for the quarter, showing a significant increase of 32% from the second quarter. Interim Dividend: The company declared an interim dividend of Rs 0.60 per share, which constitutes 30% of the face value. Business Segment Performance Pharmaceutical Division: Pharmaceutical sales were reported at Rs 267 crore, contributing significantly to the quarter's revenue. Crop Protection Division: Crop Protection saw revenues of Rs 180 crore for this quarter. Operational Highlights Margins: Improvements in margins were attributed to the softening of raw material prices and the implementation of business excellence initiatives. Industry Destocking: The Crop Protection Industry experienced continued destocking, impacting the overall demand dynamics. Global Exposure: The company reported notable traction for its newer pharmaceutical product portfolio in geographies such as Japan, Latin America, and the Middle East. New Facilities: A new multipurpose Animal Health Plant at Panoli has been successfully commissioned during this quarter. Commenting on the results, Jai Hiremath, Executive Chairman, Hikal said, “The global chemical industry continues to witness turbulence on the back of increased inventory levels, higher interest rates and intense price competition. We see prices bottoming out over the next few months and at the same time we can see things improving in the industry going forward. For Q3FY24, we reported revenues of Rs 448 crore and EBITDA of Rs 65 crore. The softening of raw materials prices coupled with focused cost improvement, lean initiatives and a diversified product mix helped us to improve our margins sequentially on a QoQ basis. Our pharmaceutical business reported revenues of Rs 267 crore and EBIT of 18 crore for Q3FY24. In the API business, we are seeing traction on the back of improved penetration across different geographies, stabilized prices and signs of recovery in market demand. On the CDMO side, we continue to maintain a strong pipeline of enquiries from several Pharma innovators, and several products are in the advanced stages of development. For Q3FY24, our crop protection business reported revenue of Rs 180 crore and EBIT of 22 crore. The global crop protection industry continues to experience severe headwinds. Subdued global demand on the back of the destocking situation coupled with intense price competition has impacted the industry. Proactive implementation of cost improvement programs has benefited us this quarter in maintaining the margin profile. Our new multi-purpose facility at Panoli is completed and stabilization of the plant is in progress. Result PDF
Conference Call with Hikal Management and Analysts on Q1FY24 Performance and Outlook. Listen to the full earnings transcript.
Pharmaceuticals company Hikal announced Q1FY24 results: Revenue stood at Rs 388 crore EBITDA stood at Rs 50 crore, a 122% increase on a YoY basis PAT stood at Rs 7 crore Hikal’s long-term credit rating is maintained at A+ by ICRA Commenting on the results, Jai Hiremath, Executive Chairman, Hikal said, “FY24 has started on a challenging note due to global macro-economic pressures and high channel inventories leading to lower demand across both our businesses. The chemical industry faced difficulties due to China's opening up and depressed market conditions specifically in the Crop Protection end-use markets. For Q1FY24, we reported revenues of Rs 388 crore and EBITDA of Rs 50 crore. During the quarter we witnessed disruptive channel inventory correction across the supply chain in both businesses. We were able to navigate through the market headwinds on the back of improved cost control measures and softening of certain raw materials prices. On July 22, 2023, the company received communication from Gujarat Pollution Control Board (GPCB) directing the company to seize operations within 15 days from the order date citing certain technical violations. The company has responded to the queries raised by the GPCB and the closure notice has been revoked. There has been no interruption in production and operations at the site, which continues to operate as normal. We are deeply committed to upholding the principles of responsible care and sustainable business practices. For Q1FY24, our pharmaceutical business reported revenues of Rs 225 crore. In the pharmaceutical industry, we witnessed softening of raw material prices at the same time competitive pricing environment. On the Generics side, sales have stabilized, and the inventory is expected to normalize by the end of next quarter. We expect that the off-take will return to normalcy in the second half of this financial year. We have strengthened our sales network in geographies like Latin America, the Middle East, and Japan. On the CDMO front, we continue to have a strong future pipeline and are aggressively capitalizing on new opportunities. During the quarter, our API facility in Panoli, Gujarat, was audited by the US FDA, and the audit was concluded with ‘Zero’ 483 observations as a testament to our commitment to high standards of regulatory compliance. Our crop protection business reported revenue of Rs 163 crore for Q1FY24. The global agrochemical industry has been going through a challenging phase over the last several quarters as end customers are destocking amid high channel inventories. The market is witnessing pricing pressure given the higher base of the previous year and very aggressive price competition from the Chinese companies. We are experiencing a decline in the prices of certain products due to the cost of inventory with channel partners. However, we anticipate a recovery in demand towards the end of Q3FY24. On the margins side, softening of raw material prices and deployment of cost improvement programs are expected to have a favorable impact. In our animal health business, the progress on developing new products as part of a long-term contract with an innovative animal health company is progressing well. Our new multipurpose plant for animal health is on track at Panoli, Gujarat and commissioning is underway. We will be validating several products in the upcoming quarters. We are well-positioned to benefit from the significant opportunities considering the current shift in the global supply chain and the diverse capability built over three decades. We are anticipating a better second half of the year with an up-trending revenue, realization from cost improvement programs, and raw material price stabilization. We are confident that the journey of longer-term sustainable growth and profitability is still very much intact.” Result PDF