|
Hikal
consolidated net sales increased 8.55% to Rs 545.29 crore in Q4FY23 compared to
Q4FY22. Sales of Crop protection
products segment has gone up 58.85% to Rs 308.82 crore (accounting for 56.63%
of total sales). Sales of
Pharmaceuticals segment has gone down 23.21% to Rs 236.47 crore (accounting for
43.37% of total sales).
Profit
before interest, tax and other unallocable items (PBIT) has jumped 61.38% to Rs
66.70 crore. PBIT of Crop protection
products segment rose 162.39% to Rs 30.49 crore (accounting for 45.71% of total
PBIT). PBIT of Pharmaceuticals segment
rose 21.88% to Rs 36.21 crore (accounting for 54.29% of total PBIT).
PBIT
margin of Crop protection products segment rose from 5.98% to 9.87%. PBIT margin of Pharmaceuticals segment rose
from 9.65% to 15.31%. Overall PBIT
margin rose from 8.23% to 12.23%.
Operating
profit margin has jumped from 12.14% to 16.14%, leading to 44.30% rise in
operating profit to Rs 88.01 crore. Raw
material cost as a % of total sales (net of stock adjustments) decreased from
54.88% to 51.12%. Employee cost decreased
from 10.76% to 10.65%. Other expenses
fell from 22.11% to 22.03%.
Other
income rose 40.74% to Rs 0.38 crore.
PBIDT rose 44.29% to Rs 88.39 crore.
Provision for interest rose 60.64% to Rs 12.98 crore.
PBDT
rose 41.80% to Rs 75.41 crore. Provision
for depreciation rose 10.73% to Rs 26.83 crore.
Profit
before tax grew 67.81% to Rs 48.58 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 12.58
crore, compared to Rs 8.24 crore.
Effective tax rate was 25.90% compared to 28.46%.
Minority
interest was nil in both the periods.
Net profit attributable to owners of the company increased 73.83% to Rs
36.00 crore.
Equity
capital stood at Rs 24.66 crore as of 31 March 2023 to Rs 24.66 crore as of 31
March 2022. Per share face Value
remained same at Rs 2.00.
Promoters’
stake was 68.85% as of 31 March 2023 compared to 68.77% as of 31 March 2022.
In
connection with the alleged improper disposal of by-products by the holding
company in January 2022, statutory authorities have conducted investigations in
relation to alleged non-compliance with certain environmental laws and
regulations, and the matter is pending before the courts and relevant statutory
authorities. In an earlier quarter, Maharashtra Pollution Control Board (MPCB)
had directed the holding company to stop manufacturing activities at its Taloja
plant on grounds of not adhering to conditions stipulated in the relevant
consent to cperate. Subsequently, pursuant to an order of the Honourable Bombay
High Court, MPCB granted permission on 29 June 2022 to re-start manufacturing
activities at the plant.
Separately,
the National Green Tribunal (‘NGT’) had constituted a committee to make
recommendations in this regard. The committee submitted its reports to NGT,
after which the holding company filed a writ petition in the Hon’ble Bombay
High Court, inter alia, seeking to set aside the NGT order. Despite being
informed about the pendency of the aforesaid writ before the Hon’ble Bombay
High Court, in March 2023, NGT passed an order accepting the committee’s
reports , which, includes recovery of compensation of Rs. 17.45 crore from the
holding company for non-compliance with environmental laws and regulations. The
Hon’ble Bombay High Court, has stayed the said order passed by NGT.
Commenting on the
results, Jai Hiremath, Executive Chairman, Hikal Ltd. said,
“For
the financial year ’23, we achieved revenue of Rs 2,023 Crores, which is a growth
of 4% as compared to last financial year. FY23 has been a challenging year
where we witnessed significant headwinds in both our businesses. Despite the
challenges we have recorded a sequential quarter-on-quarter growth in
profitability.
Our
Board of Directors has recommended a final dividend of Rs 0.6 per share (30% of
FV). Along with an interim dividend of Rs. 0.6 per share (30% of FV) declared
in February 2023, the total dividend for FY23 stands at Rs 1.2 per share (60%
of FV).
We
are pleased to report that during Q4FY23, despite limited top-line growth, we
were able to sequentially expand operating margins with efforts put forth by
our team to reduce costs and strengthen operational effectiveness.
The
Crop Protection business revenue stood at Rs 236 Crores in Q4 FY23 with YoY
growth of 22%. We have seen softening of key RM prices and prices are
stabilizing. Our multipurpose plant at Panoli is reaching completion and
commissioning is underway. The crop protection industry is currently witnessing
an inventory correction across the supply chain. We expect the situation to
normalize from second half of this year.
For
Q4FY23, our pharmaceutical business reported revenues of Rs. 309 Crores. The
pharmaceutical industry is facing fierce competition, but price erosion is
currently occurring at a slower pace than in the year 2022 suggesting that the
worst of the erosion is behind us supported by improved raw material and
logistics cost. On the CDMO side, there is a lot of inventory and destocking is
taking place. We expect the situation to normalize by the end of Q2. We have a
strong future pipeline in our CDMO business and are actively pursuing new
opportunities. We have increased our footprint in emerging markets and added
several new customers.
I
am pleased to inform you our API facility in Panoli, Gujarat, was audited by
the US FDA from 8-12 May 2023, and the audit was concluded with ‘Zero’ 483
observations which highlights our high standards of regulatory compliance.
Our
new multipurpose facility for animal health is on track and should be
operational during H1 FY24. Development of new products as a part of a
long-term contract with an innovator animal health company is going as per our
plan.
One
of the key factors that sets us apart is our commitment to sustainability,
which is the core of our ESG Strategy. We understand the growing global concern
for the environment, and we are working to make a positive impact through our
operations. Our investments in technology, waste reduction initiatives, and sustainable
manufacturing processes will help position us as a preferred partner for our
global customers.
Project
Pinnacle initiatives have already begun to yield positive results and will help
us emerge stronger, and more sustainable.
We
foresee a slowdown in the coming couple of quarters due to the global economic
downturn and increasing pricing pressure. However, we are focusing on
operational excellence and capital efficiency to reduce costs and improve our
margins to remain competitive in this challenging global environment. We are
well positioned for sustainable growth in the medium to long term, driven by
our focus on innovation, commitment to sustainability, global presence, and a
strong financial foundation.”
Full year results
analysis
Net
sales (including other operating income) of Hikal has increased 4.13% to Rs
2023.03 crore. Sales of Crop protection
segment has gone up 37.17% to Rs 1,115.18 crore (accounting for 55.12% of total
sales). Sales of Pharmaceuticals segment
has gone down 19.64% to Rs 907.85 crore (accounting for 44.88% of total sales).
Profit
before interest, tax and other unallocable items (PBIT) has slumped 36.80% to
Rs 168.20 crore. PBIT of Crop protection
segment fell 43.59% to Rs 64.95 crore (accounting for 38.61% of total
PBIT). PBIT of Pharmaceuticals segment
fell 31.63% to Rs 103.25 crore (accounting for 61.39% of total PBIT).
PBIT
margin of Crop protection segment fell from 14.16% to 5.82%. PBIT margin of Pharmaceuticals segment fell
from 13.37% to 11.37%. Overall PBIT
margin fell from 13.70% to 8.31%.
Operating
profit margin has declined from 17.53% to 12.71%, leading to 24.52% decline in
operating profit to Rs 257.07 crore. Raw
material cost as a % of total sales (net of stock adjustments) increased from
52.17% to 55.04%. Employee cost
increased from 10.28% to 10.92%. Other
expenses rose from 20.34% to 21.42%.
Other
income rose 10.63% to Rs 5.41 crore.
PBIDT fell 24.02% to Rs 262.48 crore.
Provision for interest rose 54.12% to Rs 48.1 crore. Loan funds rose to Rs 748.19 crore as of 31
March 2023 from Rs 675.02 crore as of 31 March 2022. Inventories declined from Rs 328.98 crore as
of 31 March 2022 to Rs 316.74 crore as of 31 March 2023. Sundry debtors were higher at Rs 441.78 crore
as of 31 March 2023 compared to Rs 437.72 crore as of 31 March 2022. Cash and bank balance rose to Rs 59.55 crore
as of 31 March 2023 from Rs 49.09 crore as of 31 March 2022. Investments declined from Rs 10.91 crore as
of 31 March 2022 to Rs 5.30 crore as of 31 March 2023.
PBDT
fell 31.78% to Rs 214.38 crore.
Provision for depreciation rose 13.94% to Rs 109.01 crore. Fixed assets increased to Rs 1,350.27 crore
as of 31 March 2023 from Rs 1,163.97 crore as of 31 March 2022. Intangible assets declined from Rs 10.29
crore to Rs 10.20 crore.
Profit
before tax down 51.79% to Rs 105.37 crore.
Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 26.98
crore, compared to Rs 58.06 crore.
Effective tax rate was 25.61% compared to 26.56%.
Minority
interest was nil in both the periods.
Net profit attributable to owners of the company decreased 51.16% to Rs
78.39 crore.
Equity
capital stood at Rs 24.66 crore as of 31 March 2023 to Rs 24.66 crore as of 31
March 2022. Per share face Value
remained same at Rs 2.00.
Promoters’ stake was
68.85% as of 31 March 2023 compared to 68.77% as of 31 March 2022 .
The scrip is
currently trading at Rs 283.
|
Hikal : Consolidated Results
|
|
Particulars
|
2303
(03)
|
2203
(03)
|
Var.(%)
|
2303
(12)
|
2203
(12)
|
Var.(%)
|
|
Net Sales
|
545.29
|
502.35
|
9
|
2,023.03
|
1,942.72
|
4
|
|
OPM (%)
|
16.1
|
12.1
|
|
12.7
|
17.5
|
|
|
OP
|
88.01
|
60.99
|
44
|
257.07
|
340.56
|
-25
|
|
Other Inc.
|
0.38
|
0.27
|
41
|
5.41
|
4.89
|
11
|
|
PBIDT
|
88.39
|
61.26
|
44
|
262.48
|
345.45
|
-24
|
|
Interest
|
12.98
|
8.08
|
61
|
48.1
|
31.21
|
54
|
|
PBDT
|
75.41
|
53.18
|
42
|
214.38
|
314.24
|
-32
|
|
Depreciation
|
26.83
|
24.23
|
11
|
109.01
|
95.67
|
14
|
|
PBT
|
48.58
|
28.95
|
68
|
105.37
|
218.57
|
-52
|
|
EO Income
|
0
|
0
|
|
0
|
0
|
|
|
PBT after EO
|
48.58
|
28.95
|
68
|
105.37
|
218.57
|
-52
|
|
Taxation
|
12.58
|
8.24
|
53
|
26.98
|
58.06
|
-54
|
|
PAT
|
36
|
20.71
|
74
|
78.39
|
160.51
|
-51
|
|
EPS (Rs)*
|
#
|
#
|
|
6.4
|
13.0
|
|
|
Notes
|
|
* EPS is on current equity of Rs 24.66 crore, Face value of Rs
2, Excluding extraordinary items.
|
|
# EPS is not annualised
|
|
bps : Basis points
|
|
Figures in Rs crore
|
|
Source: Capitaline Corporate Database
|
|
Hikal : Consolidated Segment
Results
|
|
|
% of (Total)
|
2303
(03)
|
2203
(03)
|
Var.(%)
|
% of (Total)
|
2303
(12)
|
2203
(12)
|
Var.(%)
|
|
Sales
|
|
Crop protection products
|
57
|
308.82
|
194.41
|
59
|
55
|
1,115.18
|
812.98
|
37
|
|
Pharmaceuticals
|
43
|
236.47
|
307.94
|
-23
|
45
|
907.85
|
1,129.74
|
-20
|
|
Total Reported Sales
|
100
|
545.29
|
502.35
|
9
|
100
|
2,023.03
|
1,942.72
|
4
|
|
Less: Inter segment revenues
|
|
0
|
0
|
-
|
|
0
|
0
|
-
|
|
Net Sales
|
|
545.29
|
502.35
|
9
|
|
2,023.03
|
1,942.72
|
4
|
|
PBIT
|
|
Crop protection products
|
46
|
30.49
|
11.62
|
162
|
39
|
64.95
|
115.14
|
-44
|
|
Pharmaceuticals
|
54
|
36.21
|
29.71
|
22
|
61
|
103.25
|
151.02
|
-32
|
|
Total PBIT
|
100
|
66.7
|
41.33
|
61
|
100
|
168.2
|
266.16
|
-37
|
|
Less : Interest
|
|
12.98
|
8.08
|
61
|
|
48.1
|
31.21
|
54
|
|
Add: Other un-allcoable
|
|
-5.14
|
-4.3
|
-20
|
|
-14.73
|
-16.38
|
10
|
|
PBT
|
|
48.58
|
28.95
|
68
|
|
105.37
|
218.57
|
-52
|
|