Hester Bios

Hester Biosciences reported a strong financial performance for Q4 and FY25, with standalone profit growing by 17% for the full year and 30% in Q4. Consolidated profit saw a significant increase of 36% in FY25. While overall revenue appeared flat year-on-year due to a one-time^📎 pharmaceutical export sale in the prior year, the underlying divisional product sales demonstrated a healthy 12% growth. The company also achieved an 8% increase in EBITDA, reflecting improved operational efficiency and cost control.

A key focus for FY25 was enhancing operational efficiency, which directly contributed to stronger margins and profits. Initiatives included improving production performance, reducing wastage, optimizing inventory control, and prioritizing higher-margin products. The company also carefully managed administrative and overhead costs, leading to stable standalone gross-profit margins and a determined effort to reach a 25% net margin level in the future.

The combined Animal Health and Pet Care division recorded an 8% growth in Q4 and 6% in FY25, driven by stable demand for Goat Pox and PPR vaccines and increasing prescription-driven sales in Pet Care. The Poultry Healthcare division maintained positive momentum with strong vaccine sales and the launch of new feed supplements and disinfectants. Preparations for the Avian Influenza vaccine launch are progressing well, with commercial availability expected by the beginning of Q2 FY26, positioning it as a key growth driver.

International subsidiaries showed mixed but improving results. Hester Nepal delivered stable net profits of Rs. 1.2 crore in FY25, primarily from tender business. Hester Africa significantly reduced its net loss to Rs. 10.2 crores in FY25, down from Rs. 18 crores in the previous year, backed by strong sales and tender wins for PPR & CBPP vaccines. The company expects Hester Africa to breakeven within two years and recoup accumulated losses of approximately Rs. 45 crores within 3-4 years, focusing on expanding its presence in Africa, Asia, and the Middle East.

The company's capital expenditure plan for the current fiscal year is primarily focused on maintenance, with no significant new CAPEX planned. The fill finish facility, part of the Rs. 176 crore CWIP, is expected to be capitalized by Q2 FY26, while the BSL-3 facility awaits administrative approval from BIRAC. Hester Biosciences successfully reduced its consolidated debt by Rs. 32 crores in March 2025 compared to March 2024, with debt repayments managed entirely through operational cash flow, and no new working capital additions are currently envisaged.

Hester Biosciences positions itself as a pure animal health company, distinct from integrated players like Venky's. The company is not losing market share to in-house production by large poultry players, noting that some competitors have divested their vaccine plants. In Africa, the strategy involves creating demand in primitive markets, with government-aided business gradually transitioning to the private sector, exemplified by their JV Thrishool Exim which operates with zero tender business.