Hester Biosciences , a leading animal healthcare company, has reported mixed results for the first quarter, with a strong turnaround in its African operations offsetting headwinds in its Indian business.

Standalone Performance

On a standalone basis, Hester Biosciences experienced a 14% decline in revenue, which stood at INR 63.00 crores. The company's Profit After Tax (PAT) also saw a 7% decrease. This dip in performance was primarily attributed to delayed government immunization programs for Peste des Petits Ruminants (PPR) and lumpy skin disease in the Animal Health division.

Divisional Performance

Animal Health Division

The Animal Health division, which includes both Ruminant and Petcare businesses, witnessed a significant 33% decline. This was mainly due to the deferred execution of large immunization programs for PPR and lumpy skin disease, for which Hester provides its Goat Pox Vaccine.

Poultry Healthcare Division

In contrast, the Poultry Healthcare division recorded a modest 2% growth, driven by sustained demand for key vaccines such as Newcastle disease and Marek's vaccines. The company's recently launched feed supplements and disinfectants are gaining acceptance in the market.

Consolidated Performance

Despite the challenges in the standalone business, Hester Biosciences reported impressive consolidated results. The company's consolidated PAT grew by over 100%, primarily driven by improved international performance and effective margin control.

Africa Operations: A Significant Turnaround

Hester Africa achieved a remarkable turnaround, posting a profit of INR 5.00 crores on a revenue of INR 17.00 crores. This is a significant improvement from the INR 3.00 crores revenue and losses reported in the same quarter last year. The company's facility in Tanzania has stabilized, and Hester is expanding its presence in African markets with high demand for ruminant and poultry vaccines.

Future Outlook

Despite the current headwinds in the Indian market, Hester Biosciences' management remains optimistic about the future. They expect institutional demand to normalize and growth to return in the coming quarters. The company is also awaiting regulatory clearances for the launch of its avian influenza vaccine, which could provide a boost to its product portfolio.

Earnings Call Highlights

During the earnings conference call, Priya Gandhi, Executive Director of Hester Biosciences, emphasized the company's focus on operational efficiency and cost optimization. She stated, "Despite the top line pressure, our focus on improving internal efficiencies and managing product mix has helped in protecting our profitability."

The management also highlighted their efforts in realigning sales and marketing approaches, strengthening R&D prioritization, and enhancing preparedness for upcoming product launches.

In conclusion, while Hester Biosciences faced challenges in its domestic market during Q1, the strong performance of its international operations, particularly in Africa, demonstrates the company's resilience and the potential of its diversified geographical presence. The management's optimism for the upcoming quarters, coupled with their focus on operational improvements and new product launches, suggests a positive outlook for the company's future performance.

Hester Biosciences Limited , a leading animal health company, has reported a mixed set of financial results for the first quarter. The company's consolidated performance showed significant improvement, while standalone results faced some challenges.

Consolidated Performance Highlights

• Consolidated revenue from operations increased by 2% to ₹841.05 crore
• Net profit surged by 131% to ₹172.96 crore
• EBITDA margin improved to 31%, up from 24% in the same quarter last year
• Earnings per share (EPS) more than doubled to ₹20.33

Standalone Performance

• Standalone revenue from operations decreased by 14% to ₹634.90 crore
• Net profit declined by 7% to ₹78.38 crore
• EBITDA margin slightly improved to 21% from 20%
• EPS stood at ₹9.21, down from ₹9.91 in the corresponding quarter

Segment-wise Performance

Animal Healthcare Division

The Animal Healthcare Division faced challenges, with a 33% decline in sales. This was primarily attributed to timing delays in key government immunization programs for PPR (Peste des Petits Ruminants) and Lumpy Skin Disease. However, the company maintains a strong market position with approximately 75% of the world market share for PPR vaccine and over 70% market share in Goat Pox vaccine in India.

Poultry Healthcare Division

The Poultry Healthcare Division showed resilience, recording a 2% growth. This growth was driven by robust demand for key vaccines, particularly for Newcastle Disease and Marek's Disease. The division also expanded its technical support initiatives and customer partnerships.

Subsidiary Performance

• Hester Nepal contributed a net profit of ₹19.19 crore on a topline of ₹50.79 crore
• Hester Africa delivered a remarkable turnaround, reporting a net profit of ₹55.02 crore compared to a loss of ₹50.00 crore in the previous comparable quarter, on a topline of ₹172.27 crore

Future Outlook

Hester Biosciences remains committed to strengthening its presence across key animal segments. The company's focus areas include:

1. Launching its Avian Influenza vaccine and expanding the feed supplement and disinfectant portfolio
2. Accelerating product diversification in the Animal Healthcare division
3. Leveraging international infrastructure, particularly in Africa, to scale revenue and margins sustainably

Rajiv Gandhi, CEO & Managing Director of Hester Biosciences, commented on the results, stating that while lower performance was mainly due to external reasons expected to be rectified in coming quarters, the company has made structural changes in sales, marketing, and R&D divisions, the results of which would be seen in the near future.

As Hester Biosciences continues to navigate market challenges and capitalize on growth opportunities, investors and industry observers will be keenly watching the company's performance in the upcoming quarters.