Hester Bios — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Hester Biosciences reported a mixed Q1 FY26 with standalone performance impacted by delayed institutional orders and a 14% revenue degrowth to INR63 crores, alongside a 7% PAT decline. However, consolidated PAT grew over 100% driven by a strong turnaround in Hester Africa, which posted a INR5 crore profit on INR17 crore revenue. The company remains optimistic about returning to growth in the coming quarters with normalizing institutional demand and new product momentum.

Highlights

  • Consolidated PAT grew by over 100% YoY, driven by improved international performance and margin control.

  • Hester Africa achieved a profit of INR5 crores this quarter, a significant turnaround from a loss in the prior year, with revenue growing from INR3 crores to INR17 crores.

  • Poultry Healthcare division recorded a 2% growth, supported by sustained demand for key vaccines.

  • Standalone EBITDA and PAT margins held steady despite top-line pressure, due to cost optimization and operational efficiency.

Concerns

  • Standalone divisional product-wise performance stood at INR63 crores, reflecting a 14% degrowth YoY.

  • Standalone PAT declined by 7% YoY.

  • Animal Health division revenue declined by 33% due to deferred execution of two large immunization programs (PPR and lumpy skin disease).

  • Regulatory clearances for the avian influenza vaccine launch are still pending, anticipated this quarter.

Key financials

  1. Standalone Revenue ₹63 Cr -14%YoY
  2. Standalone PAT Growth -7%
  3. Consolidated PAT Growth 1%
  4. Hester Africa Revenue ₹17 Cr +466.7%YoY
  5. Hester Africa Profit ₹5 Cr
  6. Poultry Healthcare Revenue Growth 2%

What they filed

Q1 FY27: revenue down 8.3%, net profit up 470.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue84 63 82 84 71 −15%77 +22%100 +22%77 −8%
EBITDA19 5 19 23 12 −37%18 +260%34 +79%23 +0%
Net profit8 11 2 17 14 +75%9 −18%17 +750%97 +471%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Animal Health
    33% Revenue Decline

Capital allocation

high confidence
  • Capex Capex disclosed
    • Repurposing BSL-3 facility for animal vaccines ₹176 Cr
    Yes. The BSL-3 facility was specifically made to address and manufacture the COVID bulk antigen, as you all are aware. Thank God that COVID has gone away. But yes, that has left us with a facility which we are trying to get it repurposed. And we are in progress to getting it repurposed, probably we should get the permission in the next few months. And then we have plans on how to use this BSL-3 facility to increase our product range for animal vaccines. It being a governmental thing is a lag, which we have to accept.

Guidance & targets

Volume

  • Animal Health Institutional Demand Volume · Q2 · Medium confidence Traction and return
    While this quarter bore the brunt of those delays, we do expect traction and a return in Q2.

    — Priya Gandhi

Product Contribution

  • Poultry Feed Supplements and Disinfectants Contribution Product Contribution · next 2 quarters · Medium confidence Improve further
    Our feed supplements and disinfectants launched last year are gaining acceptance, and we expect their contributions to improve further over the next 2 quarters.

    — Priya Gandhi

Regulatory

  • Avian Influenza Vaccine Regulatory Clearances Regulatory · this quarter (Q2 FY26) · High confidence Anticipated to come in
    Everything from our side is clear. We are just waiting for some regulatory clearances, which are anticipated to come in this quarter any time.

    — Priya Gandhi

  • BSL-3 Repurposing Permission Regulatory · next few months · High confidence Get permission
    And we are in progress to getting it repurposed, probably we should get the permission in the next few months.

    — Rajiv Gandhi

Growth

  • Overall FY26 Growth Growth · coming quarters · Medium confidence Returning to growth
    Looking ahead, we remain optimistic about the remaining part of FY '26, with institutional demand expected to normalize combined with increased momentum in newer markets across our Petcare and Poultry portfolio, we are confident of returning to growth in the coming quarters.

    — Priya Gandhi

Market Share

  • Poultry Market Share Market Share · coming months · Medium confidence Gain more
    we are definitely now have taken up an objective to gain more market share in the coming months

    — Rajiv Gandhi

What to watch in Q2 FY26

Animal Health Institutional Orders

next quarter
Current Deferred, causing 33% decline in Q1
Target Traction and return in Q2

Why it matters

Recovery in institutional orders is crucial for the standalone performance of the Animal Health division.

While this quarter bore the brunt of those delays, we do expect traction and a return in Q2.

Risks & concerns

  • Deferred execution of immunization programs

    high

    33% decline in Animal Health division due to deferred PPR and lumpy skin disease programs.

    Management acknowledged

  • Timing delays in institutional orders

    medium

    India business faced headwinds due to timing delays in institutional orders.

    Management acknowledged

  • Non-linear timelines for tender-driven programs

    medium

    Immunization programs are typically tender-driven and tend to have an organic and non-linear timeline.

    Management acknowledged

  • Regulatory clearance delays for new products/facilities

    medium

    Awaiting regulatory clearances for avian influenza vaccine and BSL-3 repurposing, noting 'governmental lag'.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
FMD vaccine plans Direct
at this point of time, we are not into FMD, and we don't have any short-term plan of getting into that right away.

Clarifies the company's current strategic focus and absence of immediate plans for FMD vaccine development, which was a prior area of interest.

Asked by Rushabh Shah

Global poultry vaccine market size Evasive
These statistics are not ready with us at the moment on the whole global market scenario, sorry for that, probably it could be answered off-line later on.

Management was unable to provide a key market statistic, suggesting either lack of immediate data or reluctance to disclose.

Asked by Rushabh Shah

Poultry segment cyclicality and future outlook Partial
we have had a marginal growth on the poultry side, 2%. But overall, there has been a dip. So I think what we have done is at least we have been able to maintain our turnover, etcetera. And we are very confident that this will now go up.

Analyst questioned the lack of strong growth in the poultry segment; management acknowledged the dip but expressed confidence in future improvement and market share gains.

Asked by Harshal Mehta

Long-term strategy for Nepal business Direct
So the Nepal plant was specifically built to cater to the worldwide eradication PPR program. And I mean, for various reasons, which are beyond our control, it has been quite fluctuating, especially COVID has impacted that quite a bit. Having said that, going forward, we are going to be needing more capacity given the demand, which is also going to come in Africa.

Explains the historical purpose and challenges of the Nepal plant, and its future role in optimizing capacity for rising African demand.

Asked by Harshal Mehta

Impact of African business turnaround on consolidated numbers Direct
I mean if the trend continues, it will affect in a positive way, which we are hoping to have. At the same time, I mean, we really don't want to comment whether this is the trend it will continue to have. But yes, all we can say is that there is a lot of demand, and we are working very hard in developing and commercializing product specific for the continent of Africa

Confirms the positive contribution of the African turnaround to consolidated results and highlights strong demand in the region, while cautiously avoiding firm predictions.

Asked by Harshal Mehta

Capitalization of BSL-3 facility and INR176 crores WIP Direct
The BSL-3 facility was specifically made to address and manufacture the COVID bulk antigen... we are in progress to getting it repurposed... probably we should get the permission in the next few months. And then we have plans on how to use this BSL-3 facility to increase our product range for animal vaccines.

Provides clarity on the status and future plans for the BSL-3 facility, including the timeline for regulatory permission and its intended use for animal vaccines.

Asked by Megh Jain

PPR eradication program and African swine fever vaccine launch Direct
The PPR vaccine is mainly tender business. So it is centralized earlier by FAO. Now it has been moved to an African agency. We are regularly in touch with them... African swine fever, we have not yet got any visibility on the African swine fever vaccine... we are working on it. And we have no outer time line.

Updates on the PPR vaccine market dynamics and the company's engagement, while indicating early-stage efforts and no clear timeline for an African swine fever vaccine.

Asked by Megh Jain

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview: Standalone Dip vs. Consolidated Strength

Hester Biosciences reported a mixed Q1 FY26. Standalone divisional product-wise performance stood at INR63 crores, reflecting a 14% degrowth, with standalone PAT declining by 7%. This was primarily due to timing delays in institutional orders in the India business. However, on a consolidated level, divisional sales increased, and PAT grew by over 100%, driven by strong international performance and effective margin control.

Animal Health Division Faces Headwinds

The Animal Health division, encompassing Ruminant and Petcare businesses, experienced a significant 33% decline in revenue. This decline was attributed to the deferred execution of two major immunization programs for PPR and lumpy skin disease. These programs are tender-driven, leading to non-linear timelines. Management anticipates a return to traction in this segment in Q2.

Poultry Healthcare Shows Marginal Growth and New Product Traction

The Poultry Healthcare division recorded a marginal growth of 2%, supported by sustained demand for key vaccines like Newcastle disease and Marek's. Feed supplements and disinfectants, launched last year, are gaining market acceptance, and their contributions are expected to improve further over the next two quarters. The company is actively working to gain more market share in this segment.

Hester Africa Achieves Significant Turnaround

Hester Africa demonstrated a remarkable turnaround, moving from a loss in the prior year's same quarter to a profit of INR5 crores this quarter. Its top line surged from INR3 crores to INR17 crores, marking a substantial increase. This improvement was driven by enhanced commercial execution and better market penetration, with the Tanzania facility now stabilized and serving as a base for regional expansion.

Strategic Initiatives and Product Pipeline Updates

The company is advancing its product pipeline, with preparations underway for the launch of the avian influenza vaccine, awaiting regulatory clearances expected this quarter. The BSL-3 facility, representing INR176 crores in work-in-progress as of March 2025, is being repurposed for animal vaccine production, with governmental permission anticipated in the next few months. Hester is also actively engaging with African agencies regarding PPR vaccine tenders and exploring opportunities for an African swine fever vaccine.

Optimistic Outlook for Remaining FY26

Management expressed optimism for the remainder of FY26, expecting institutional demand to normalize and increased momentum in newer markets for both Petcare and Poultry portfolios. They are confident in returning to overall growth in the coming quarters, emphasizing continued focus on capacity utilization, improving logistics, and growing local engagement, particularly in the strategic African market.

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