Hester reports poor demand environment in Q4HESTERBIO - 2097 Change: -25.40 (-1.20 %)
News: Revenue witnessed a 14% decline YoY to Rs. 56 crore on back of 25% YoY de-growth in poultry business to Rs. 40 crore being partly offset by 46% YoY growth in animal business to Rs. 17 crore. EBITDA margins declined 1253 bps YoY to 18%, mainly due to higher other expenditure amid higher spend on market expansion in animal health. EBITDA declined 48% YoY to Rs. 10 crore. Subsequently, PAT was down 41% YoY to Rs. 8 crore [note: base of Q4FY21 had Rs. 6.8 crore of license fee income]
Views: Hester’s poultry business benefitted from a major disease outbreak in Q4FY21 while this quarter poultry farm economics also turned adverse due to rise in feed costs and decline in end-product prices. Animal business benefited from new product launches and geographical expansions. Going ahead, Hetesr is expected to benefit from FAO tenders for PPR vaccines, improvement in demand environment in Africa and opportunities panning out from animal vaccines such as classical swine fever, lumpy skin disease (only player) and sheep pox (only player). Progress was made in pet division with 3 launches. As the company strengthens its hold in the overall animal healthcare space, consistent order flow and pricing power is likely to improve.