- 02 Aug 2024
- ICICI Securities
HIKAL Q1FY25- CROP PROTECTION PERFORMS WELL BUT PHARMA MUTED
HIKAL - 407 Change: 1.95 (0.48 %)News: Revenues grew 5% YoY to ₹ 407 crore driven by 9% growth in Crop protection segment to ₹ 177 crore. However, Pharma grew just 2% to ₹ 229 crore. EBITDA grew ~15% to ₹ 58 crore and margins stood at 14.3% (130 bps improvement). PAT de-grew 26% to ₹ 5 crore which was mainly on account of higher depreciation and interest expenses.
Views: Pharma growth was impacted by 8% decline in API sales (63% of Pharma) mainly due to planned shut-down for capacity expansion and change in product mix. Pharma CDMO (37% of Pharma) on the other hand grew ~26%. In Pharma the company completed 13 customer audits during the quarter. Crop protection business was driven by Own products (30% of crop protection) growth of ~44% even as CDMO business (70% of Crop protection) declined ~2%. As per management, the global Crop protection scenario is expected to improve by Q4FY25. In Pharma CDMO, the company continues to receive multiple requests for proposals from emerging pharmaceutical companies and global innovators. In animal healthcare, the company has completed the development and validation of five products and are currently on track to finish validating several others by the end of this year. The management has guided for 10-15% sales growth and set an EBITDA margin target of ~20% post FY26. The commentary and the guidance is based on the demand scenario and the capex executed over the last three years.
Impact: Neutral