Hester Biosciences Q1 PAT Surges 88% on Strong Margins

Event Type: Q1 FY27 Earnings Conference Call hosted by ICICI Securities Limited to discuss financial results for the quarter ended 30 June 2026.
Date and Time: Held on Thursday, 30 July 2026 at 2:00 p.m. Indian Standard Time (IST).
Management Participants: Mr. Rajiv Gandhi (CEO and Managing Director), Ms. Priya Gandhi (Executive Director), and Mr. Ashish Desai (CFO).
Purpose: Discussion of Q1 FY27 financial results and business updates across all divisions.
Compliance Statement: The transcript was submitted to exchanges pursuant to Regulations 30 and 46(2)(oa) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No specific statement regarding unpublished price sensitive information (UPSI) was made in the disclosed transcript.

Standalone Performance: Revenue from operations grew 14% YoY; PAT increased 88% YoY; Gross margins improved from 69% to 78%; EBITDA grew 95% YoY.
Consolidated Performance: Revenue declined 8% YoY primarily due to lower revenues from Nepal and Africa operations.
Exceptional Item: Consolidated profitability includes an exceptional accounting gain from amendment of soft loan extended to Hester Africa by Gates Foundation - outstanding loan reduced from $12 million to $5 million, accrued interest waived, and loan made interest-free.
Debt Position: Consolidated debt as of 30 June 2026 stood at ₹103 crores.
Tax Benefit: Africa entity entitled for tax-free status on profits until 2030.

Poultry Healthcare Division: Delivered 48% growth YoY supported by higher institutional business, deeper market penetration, and strengthening customer engagement. Early traction witnessed in feed supplements and disinfectant solutions portfolio introduced previous financial year.
Animal Healthcare Division: Impacted by timing of government-led immunization programs (PPR eradication and Lumpy Skin Disease Control Initiative). Management characterized this as timing-related rather than underlying demand issue.
International Operations: Nepal and Africa reported low revenues during quarter, but strategic direction remains unchanged focusing on registration, market development, and commercial presence.

R&D Pipeline: Regulatory dossiers submitted in animal health segment during quarter. Brucella recombinant vaccine development progressing on proper timeline.
Manufacturing Capacity: Overall capacity utilization at approximately 60-65% across all facilities including new BSL3 and fill-and-finish capabilities.
Pet Care Division: Emerging business currently part of animal health division with products in antibiotics, anti-parasites, and grooming categories. Not yet reported separately.

Priorities for FY27 include strengthening biological portfolio, expanding market penetration, advancing R&D pipeline, improving manufacturing utilization, and maintaining operational excellence.
Management emphasized long-term nature of product development, regulatory approval, and market development initiatives.

Attachment: The transcript was enclosed with the regulatory filing as required by SEBI regulations.
Financial Data: Extensive financial data and operational metrics were discussed during the call, including specific growth percentages, margin figures, debt numbers, and division-wise performance breakdowns.
Q&A Coverage: The transcript included detailed question-and-answer session with analysts covering capacity utilization, demand scenario, Africa operations, pet care business, cash conversion, and government tender dependencies.