Other income rose to Rs 64 lakh compared to Rs 68 lakh. Interest cost was down 20% to Rs 9.68 crore. Finance cost for the quarter ended June20 includes exchange loss on foreign currency working capital/term loans of Rs. 6 lakh compared to nil in quarter ended June19. Depreciation rose 2% to Rs 20.71 crore. PBT before EO was down 25% to Rs 27.49 crore. The company reported EO expense of Rs 4.7 crore related to Covid expenses incurred during pandemic (Rs 3 crore paid to employees as ex-gratia in addition to normal compensation and Rs 1.7 crore of other expenses which includes Rs 1 crore of additional CSR expenditure) compared to nil in the corresponding previous year period. PBT after EO was down 38% to Rs 22.79 crore. 

Effective rate of taxes was up 300 bps to 34%. PAT reported was down 41% to Rs 15 crore. 

Segment wise, Pharmaceutical Segment revenue stood at Rs 213.65 crore, up by 5% YoY and accounted for 61% of sales. Recovery in operations led by improved volume off-take by customers while commissioning of additional capacity enabled to meet higher demand. Post relaxation of Nation-wide lockdown, the operations are ramping up steadily at Bangalore and Panoli facilities. PBIT from the same was down by 23% to Rs 21.78 crore and accounted for 56% of total PBIT with PBIT margin at 10.2% as compared to 13.9% for Juine19 quarter.  

For the quarter, sales from the Crop Protection Segment stood at Rs 139.12 crore down by 30% YoY and accounted for 39% of sales. COVID-19 pandemic lockdown impacted the global customer's operations during the quarter leading to deferment of volume off-take. Repeat local lockdowns in Maharashtra (Taloja & Mahad Site) further impacted the production schedule which was already disrupted due to Nation-wide lockdown. PBIT from the same was down 37% to Rs 16.84 crore and accounted for 44% of total PBIT. PBIT margins stood at 12.1% as compared to 13.4% for June19 quarter.

Commenting on the results, Jai Hiremath, Chairman & Managing Director, Hikal Ltd. said, "We started the year with a better than expected performance and I would like to thank all the stakeholders and specially our Employees for standing strong during these difficult times. The revenue in Q1 has been lower by 12% compared to Q1 last year however, with better operational efficiencies we were able to improve our Gross Profit Margins. Our operations were at sub-optimal levels due to the nationwide lockdown and our fixed costs were greater due to the Pandemic which were not absorbed fully thereby impacting our operating profit margins. The performance for the quarter has been impacted by a COVID expense of Rs. 4.7 crore towards employee benefits and other additional costs incurred to mitigate the effect of the pandemic and help society at large. 

Our Crop Protection Division saw a revenue dip of 30% in Q1 as compared to corresponding period last year mainly due to several headwinds faced by our global customers which resulted in deferment of volume offtake. Restrictions imposed by State Government in Maharashtra where both our crop protection plants are located also led to lower production and sales. Our Pharmaceutical Division has reported a growth of 5% in top line led by improved capacity ramp-up and better volume off-take by customers. 

Looking forward, we are witnessing improvement in capacity utilization and higher volume off-take by our customers for both our divisions. We continue to be positive on growth prospects of both the divisions based on the new opportunities arising due to supply chain de-risking strategy of our customers. 

We continue to work on various cost and efficiency improvement initiatives which has already started to show results with improvements in Gross Margins over the last year. We are going ahead with our Capex plans which has been delayed due to the Pandemic and the new capacity is expected to be commissioned between March and June 2021. 

As the COVID-19 pandemic situation continues to be volatile and with intermittent lockdowns potentially impacting our operations, therefore at this juncture estimating the performance for the current year is difficult. However, with new capacity coming on stream in early part of next financial year along with normalization of COVID-19 related disruption we will be able to capitalize on our strong customer relationships, new customer inquiries, a healthy product pipeline and new opportunities under "Atmanirbhar Bharat."

Performance for the year ended Mar20 

For year ended Mar20, net sales remained fell 5% to Rs 1507.26 crore. The company operating margins decreased 700 bps to 18.1%. As a result operating profits fell 8% to Rs 273.15 crore.  

Other income rose 64% to Rs 3.7 crore. Interest cost was down 10% to Rs 52.42 crore. Finance cost for the year ended Mar20 includes exchange loss on foreign currency working capital/term loans of Rs. 3.07 crore compared to loss of Rs 7.35 crore in year ended Mar19. Depreciation fell 11% to Rs 82.46 crore. PBT before EO was down 5% to Rs 141.97 crore. The company had EO expense of Rs 15.4 crore compared to nil in the corresponding previous year period. Exceptional item during the current period comprises customs duty Rs. 13.39 crore on past imports of raw materials at an Export Oriented Unit of the Holding Company and interest of Rs. 2.01 crore thereon, paid during the quarter on directions of the Customs authority. PBT after EO was down 15% to Rs 126.57 crore. 

Effective tax rate was up 200 bps to 33%. PAT reported was down 18% to Rs 84.43 crore. 

For the 12 months, sales from the Pharmaceutical segment stood at Rs 886.87 crore and accounted for 59% of sales. PBIT from the same was down by 1% to Rs 127.53 crore and accounted for 56% of total with PBIT margin at 14.4%.  

For the 12months, sales from the Crop Protection segment stood at Rs 620.39 crore and accounted for 41% of sales. PBIT from the same was down by 11% to Rs 99.65 crore and accounted for 44% of total with PBIT margin at 16.1%. 

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