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
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