Hester posts muted quarter, multiple commercial levers aheadHESTERBIO - 2367 Change: 10.15 (0.43 %)
News: Revenue witnessed a 2.1% decline YoY to Rs.55.7 crores on back of 5.9% YoY growth in poultry business to Rs. 41.9 crores being offset by 20.4% YoY decline in animal business to Rs.13.8 crores. EBITDA margins declined 1023 bps YoY to 27%, mainly due to higher other expenditure. EBITDA declined 29% YoY to Rs.15 core. Subsequently, PAT was down 31.3% YoY to Rs.8.5 crores. [Note: Base of Q3FY21 had Rs.3.3 crores of license fee income].
Views: Hesters animal business was impacted due to logistical challenges while poultry registering normal growth in Q3 amid no major outbreaks in poultry health. Going ahead, opportunities panning out from animal vaccines such as classical swine fever, lumpy skin disease (only player) and sheep pox (only player) in the domestic space besides increased focus on health products, growth prospects looks promising for Hester. The company is in the final stage of launching the pet division. However, this is a competitive space and we will be watching the product and geographies launched. As the company strengthens its hold in the overall animal healthcare space, the next important aspect would be its progress in the human vaccines space (via maiden Covaxin adjuvant foray from its BSL-3 facility) in the long run.