Hikal Ltd offers solutions across the life sciences value chain providing worldclass active ingredients, intermediates and research and development services to global pharmaceuticals, animal health, biotech, crop protection and specialty chemicals companies. The company has five manufacturing facilities in India at Maharashtra (Taloja and Mahad), Gujarat (Panoli) and Karnataka (Jigani). In spite of global headwinds and uncertainties, Hikal has taken several decisive steps to strengthen its core business and streamline its operations to prepare for long-term sustainable growth path. While FY25 has been a year of strategic recalibration and focused execution policy, the backdrop remains complex on the back of geopolitical uncertainty, persistent cost pressures and supply chain problems. The company has been able to improve on the margin front due to its operating leverage and focused cost improvement initiatives. Hikal is witnessing solid business growth in the API segment driven by increasing volumes and off take of new molecules because of strengthening of its product portfolio as well as new customer registration across various geographies. The company is focusing on maintaining and strengthening the position in high growth therapeutic areas across markets like Japan, Korea, Latin America, Middle East and South East Asia. In the CMDO segment, Hikal has several projects in the progressional stage of development wherein the company is receiving a lot of enquiries. Particularly from high-quality development partners producing early stage molecules with proper integrated supply chain validation. Early stage outcomes with high value chemistries have shown excellent growth potential on the back of global demand. Similarly, in the Animal healthcare division, Hikal is also advancing well with timely completion of eight projects with multiple customers and expecting a healthy pipeline of growth. The Crop protection business is witnessing multiple headwinds over the last twelve months, and the company is aware of this challenge and is taking several steps to mitigate the risk and bring growth back in the company. Hikal has established a speciality chemical division to improve the capacity utilisation and also engage with CDMO customers for process development and commercialisation. The company management is aware of the fact that this will take at least a year to stabilise and expect sustainable growth to start only in FY27 across various markets and geographies. Hikal posted stellar Q4FY25 financial results with Net Sales at Rs 552.40 crores for March 2025 quarter, up 7.45% from Rs. 514.10 crores in March 2024 quarter. The Net Profit stood at Rs. 50.30 crores for the quarter ending March 2025, up 48.55% from Rs. 33.86 crores in the same quarter of last year. EBITDA stood at Rs. 124 crores for quarter ending March 2025, up 30.79% from Rs. 94.81 crores in the March 2024 quarter. The earning per share increased to Rs. 4.08 for March 2025 quarter from Rs. 2.75 of the quarter ending March 2024. On a year on year basis, EBITDA margins improved by 410 basis points to climb at 22.4%. The global pharmaceutical industry is well positioned for excellent growth and strong momentum for FY26 with Hikal expecting a revenue growth of around 15% along with a corresponding increase in EBIT margins . This is on the back of healthy pipeline of products from global pharmaceutical and specialty chemical companies. The Hikal share price is hovering around Rs 340 on the bourses and is an excellent purchase with a price appreciation of over 30% in the next one year time frame. Analysts and fund managers are quite bullish on the Hikal scrip and recommend to their portfolio investors for long term investment.
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