Hester Bios Q4 FY26 earnings call

Hester Biosciences reported strong financial results for Q4 and FY26. On a standalone basis, Q4 revenue grew by 22%, with PAT increasing significantly by 174%. For the full financial year, standalone revenue remained flat, but profitability improved substantially with PAT up by 64%. At the consolidated level, revenue grew by 22% in Q4 and 7% for the full year, while PAT increased by almost 100% in the full year, benefiting from stronger execution and favorable product mix.

The Poultry Healthcare division was a key growth driver, delivering a strong performance with 41% growth in Q4 and 21% for the entire FY26. This growth was supported by deeper market penetration, expanded placements, and sustained demand for the vaccine portfolio. The company also secured marketing and manufacturing licenses for the H9N2 Avian Influenza vaccine, an important milestone for strengthening its biological portfolio in the poultry segment. Management aims to sustain the Q4 quarterly revenue of INR 65 crores with '30s margins.

The Animal Healthcare division continued to face challenges due to delays in tender-led immunization programs, resulting in a 30% year-on-year revenue fall for FY26. However, execution under the National PPR immunization program improved in Q4, with 6.3 crore doses supplied. Management expects recovery from Q4 onwards and is focusing on market penetration and strengthening its presence, aiming for a long-term revenue mix of 50% poultry and 50% animal health.

During the year, Hester capitalized its Fill-Finish and BSL-3 facilities, which significantly enhance drug product capacity and provide flexibility for future scale-up. The company also undertook a partial divestment of its stake in Texas Lifesciences, which was an exceptional item^📎. Net debt has been consistently reduced over the last 2-3 years, currently standing at INR 70 crores, down from INR 102 crores, resulting in a healthy debt-to-equity ratio of 0.19 times.

Hester's strategic priorities include strengthening its biologicals portfolio across poultry and animal healthcare, expanding market penetration, improving product mix and capacity utilization, and maintaining focus on operational discipline and working capital management. The company is also investing in R&D and portfolio enhancement initiatives. Management acknowledged external risks such as tender timing volatility, increasing raw material costs, and geopolitical developments, but emphasized focus on operational efficiency and price calibration.

Concerns were raised regarding high receivables, which stood at INR 92 crores against revenue of less than INR 300 crores. Management attributed this partly to strong Q4 sales and stated they are actively working to reduce the number of days for receivables. Additionally, write-offs of approximately INR 6.5 crores were reported for bad debts, which management aims to reduce in the future by focusing on non-recovered old debts.