Hikal Ltd

Financial Performance

• Q1 FY27 revenue Rs 403 crores; EBITDA Rs 37 crores; EBITDA margin 9.2%; PAT Rs -7 crores.
• Exceptional income of Rs 9 crores due to reversal of labor-code provision.
• Capex in quarter Rs 45 crores; focused on de-bottlenecking, upgrades, and new capacities.
• Debt-to-equity ratio at 0.53; improvement from 0.56 in March quarter.
• Pharma revenue Rs 233 crores; EBIT Rs 8 crores; EBIT margin 3.2%.
• Crop Protection revenue Rs 170 crores; EBIT Rs -6 crores.
• Pharma remediation progress; U.S. FDA remediation nearing completion; re-inspection expected end of year.
• Panoli DMF filings to rise to 6-7 per year from 2-3.
• Net debt down to Rs 685 crores; debt-to-equity 0.53.
• Personal Care line Panoli commercial; revenue by year-end.
• Pharma CDMO pipeline includes 8-9 molecules; expansion into Japan, Latin America.
• Animal Health target Rs 400 crores by FY30; margins 20%+ EBITDA.

Segment Trends

• Pharma: demand normalization; capacity utilization 55-60% at Panoli/Bangalore.
• Crop Protection: volume-led recovery; pricing under pressure from China; margins under pressure.
• CDMO capacity expansion: Panoli Pilot Plant; DMF filings 6-7/year.
• Animal Health: pipeline; potential strategic partnerships with Japanese companies.
• Personal Care: Panoli line commissioned; revenue to begin this year.
• Cash/Capex: Rs 900 crores capex in 4 years; Rs 300 maintenance; Rs 600 growth.

Outlook & Guidance

• FY27 guidance: revenue growth 14-16%; EBITDA growth 25-30%.
• FY28 outlook: pharma growth accelerates; remediation costs fade; EBITDA margin expansion.
• Expansion in regulated markets; Japan and Latin America; CDMO contributions rising.
• FDA re-inspection by year-end; remediation program on track.

Q&A Highlights

• Animal Health top line Rs 400 crores by FY30; margins 20%+ EBITDA.
• Crop Protection: 3-year growth mid-to-high single digits; company CAGR 15-16%.
• Remediation cost impact on current EBITDA; FY28 better as remediation ends.
• FDA remediation progress; re-inspection planned; no contract losses in last year.
• Personal Care revenue to exceed Rs 200 crores in 3 years; margins >20% EBITDA.

Risks & Watchpoints

• Raw material and energy costs remain a near-term headwind.
• Pricing pressure from China; end-market price elasticity limited.
• End-customer consolidation and geopolitical volatility.

Financial highlights

• Q1FY27 consolidated revenue ₹403 crore, up 6.2% YoY from ₹380 crore.
• EBITDA ₹37 crore; margin 9.2%; up 260 bps YoY.
• PAT: loss ₹7 crore; EPS: loss ₹0.6.
• Pharma revenue ₹233 crore; Crop-Protection ₹170 crore.
• Pharma revenue grew 15.2% YoY in Q1FY27.
• Pharma share of revenue: 58%; Crop-Protection: 42%.

Operational and regulatory highlights

• Commissioned a new cGMP pilot plant in Pune to enhance development and scale-up.
• EcoVadis Gold rating awarded, strengthening customer confidence and global positioning.
• DMF filings rising to 5–6 annually from 2–3 historically.
• US FDA remediation nearing final stages; reinspection expected in current FY.
• CDMO pipeline: four CDMO molecules in development.
• Panoli Personal Care facility commissioned July 2026.

Outlook and strategy

• Management expects stepwise revenue and profitability recovery through FY27.
• Improving demand visibility and CDMO opportunities support growth.

Business overview

• Core business: pharma CDMO with own products, crop protection, animal health, personal care segments
• Strategic focus on differentiated APIs and DMF filings; emphasis on Oncology, CNS, and GI
• EcoVadis Gold rating places Hikal in top 5% globally

Operational highlights

• Q1 FY27 revenue ₹403 Cr; EBITDA ₹37 Cr; EBITDA margin 9.2%
• Pharmaceuticals revenue ₹233 Cr; 15.2% YoY growth
• New Pune cGMP pilot plant commissioned; DMF filings rising to 5–6 annually
• Crop Protection revenue ₹170 Cr; CDMO demand subdued; margins pressured by input costs
• Personal Care: Panoli facility commissioned; UV filter skincare focus
• Animal Health resilient performance; expanding development pipeline

Financial performance

• FY26 consolidated revenue ₹1,860 Cr; EBITDA ₹220 Cr; EBITDA margin 12.9%
• FY26 net profit after exceptional items ₹-49 Cr
• Consolidated Q1 FY27: revenue ₹403 Cr; net profit ₹-7 Cr
• Operating cash flow ₹302 Cr; investing ₹-145 Cr; financing ₹-160 Cr
• Total assets ₹2,365 Cr; shareholders' funds ₹1,199 Cr; borrowings ₹681 Cr; cash ₹10 Cr

Capital structure & liquidity

• Borrowings: current ₹308 Cr; non-current ₹373 Cr
• Total borrowings ₹681 Cr; cash ₹10 Cr; net debt ~₹671 Cr
• Operating cash flow strong; financing outflow ₹160 Cr

Outlook & strategic priorities

• Stepwise revenue and profitability recovery expected in FY27
• Expand CDMO opportunities; accelerate DMF filings; growth in Japan, LATAM, MENA
• Invest in High Potency capabilities; Pune R&T pilot enables development-to-scale
• EcoVadis Gold accreditation supports credibility

Risks & mitigations

• US FDA remediation ongoing; regulatory delays risk
• Rising input costs; margin pressure due to geopolitics
• Customer inventory adjustments affecting CDMO demand
• Mitigation: focus on operational excellence and diversification

Governance & leadership

• No major governance changes disclosed
• Company Secretary: Rajasekhar Reddy

Financial results approved

• Unaudited standalone and consolidated quarterly results for quarter ended 30 June 2026 approved.

Auditor remarks and regulatory note

• Limited Review Report unmodified; environmental investigations pending before Supreme Court; no adjustments.

Trading window update

• Trading window reopens August 9, 2026; special closure for Directors/KMPs remains.

Meeting Details

• Date and time: August 06, 2026 at 5:00 PM IST
• Type/Mode: group conference call, virtual
• Event: Q1 FY27 Post Results Conference Call; organiser Strategic Growth Advisors Pvt. Ltd.

Participants

• Vice Chairman and Managing Director
• Senior President, Business Transformation and Animal Health
• Chief Financial Officer
• President, Pharmaceuticals Business

Purpose

• Discuss Q1 FY27 results and operational performance for quarter ended June 30, 2026

Additional Notes

• RSVP via Strategic Growth Advisors; Diamond Pass registration
• Universal access numbers available for attendees

Meeting Details

• Date: August 06, 2026; time and venue undisclosed.

Key Agenda Items

• Consider, approve and take on record standalone and consolidated unaudited financial results for quarter ended June 30, 2026.

Other Notes

• Trading window closure periods are not specified in the filing.