Hester Bios

Hester Biosciences reported a strong Q3 FY26 on a stand-alone basis, with revenue growing by 12% and Profit After Tax (PAT) increasing by 140% year-on-year. This performance was attributed to a favorable product mix, operating efficiency, and sustained cost discipline. For the nine-month period, stand-alone revenue was down 5%, but profits still increased by 16%. On a consolidated basis, Q3 revenue grew by 22%, while 9-month sales remained broadly stable, with profitability improving substantially due to operational discipline.

The Poultry Healthcare division delivered a robust performance, growing 32% in Q3 FY26 and 17% over the nine-month period. This growth was supported by deeper market penetration, improved placement, and stronger distribution coverage for the core vaccine portfolio. Post-quarter end, the company achieved a significant regulatory milestone by receiving marketing and manufacturing licenses for its H9N2 Avian Influenza vaccine, which is expected to further strengthen its poultry vaccine offerings for both domestic and export markets.

The Animal Health division experienced a significant decline, with a 38% reduction in Q3 and 40% over nine months. This was primarily due to timing-related institutional delays in government-led immunization programs, particularly for PPR and goat pox vaccines. The Ruminant business was also affected by seasonal factors, including lower incidence of clinical cases and higher feed costs. In contrast, the Petcare segment continues to scale gradually, contributing less than 5% of the Animal Healthcare revenue, but remains a strategic focus area with exploration of pet vaccine opportunities.

During Q3 FY26, Hester Biosciences capitalized its fill/finish facility, effectively doubling its drug product capacity. The remaining Capital Work-in-Progress (CWIP) is expected to be capitalized in the coming months. The company's capex strategy is phased to support scale-up across products and markets, with anticipated returns accruing progressively as utilization increases. This expansion is aligned with projected growth in revenue and budgets.

Africa operations in Q3 FY26 were impacted by timing delays in institutional order execution and higher operating costs, though the nine-month performance remained positive. The company continues to be prepared as a global supplier for PPR eradication programs, which are long-term initiatives supported by multilateral funding. Hester's Africa strategy has evolved towards structured execution with a focus on working capital discipline and selective geographic exposure, leveraging its capabilities across multiple vaccine technologies despite regional disturbances in countries like Tanzania.

Looking ahead, Hester Biosciences is focused on reducing dependence on tender-driven revenues by deepening its presence across commercial and export markets. The company aims to leverage its expanded manufacturing capacity for future growth, strengthen its poultry vaccine portfolio (including Avian Influenza preparedness), and continue investing in innovation with a disciplined approach. Management expressed confidence in achieving a higher year-on-year trajectory for profitability, aiming to sustain and grow the current EBITDA levels.