- 11 Aug 2022
- ICICIdirect Research
Hester Biosciences reports below par numbers on all countsHESTERBIO - 1655 Change: -23.70 (-1.41 %)
News: Revenue witnessed a 16% decline YoY to Rs 51 crore on back of 14% YoY de-growth in poultry business to Rs 38 crore and 20% YoY decline in animal business to Rs 12 crore. EBITDA margins declined 1370 bps YoY to 14.7%, mainly due to higher market development cost in Animal Health and Petcare Divisions on account of company’s continuous efforts in expansion activities. EBITDA declined 56% YoY to Rs 7.4 crore. Subsequently, PAT was down 68% YoY to Rs 4 crore.
View: Hester’s poultry vaccines continued to face strong headwinds on account of increased cost of inputs (mainly feed) and pricing pressure on eggs and broiler birds. Overall margins are down due to the increase in the proportion of health products sales which have lower gross margins compared to vaccines. Health Products sales constituted 34% of the total sales in Q1FY23, versus 20% in Q1FY22. Going ahead, Hetesr is expected to focus on Vaccine tailwinds on back of LSD outbreak and PPR tender while improving sales productivity and scaling-up health products remain key for better operating leverage. As the company strengthens its hold in the animal healthcare space, order flow and pricing power is likely to improve.