Hikal Limited (HIKAL) Financial Results — Revenue ₹1,713 Cr

Investor Takeaways

Reported FY26 revenue of ₹1,713 crores and net profit of ₹14.4 crores

EBITDA margin expanded to 12.9%

Q4 FY26 standalone revenue reached ₹228 crores

Capacity utilization improved to 80-85%

Animal Health segment targeting INR500+ crores revenue in 4-5 years

₹149 crores capital expenditure deployed for facility upgrades

₹900+ crores capex planned for future growth

Targeting 15-20% CAGR in top-line growth by FY27-FY30

Targeting 18-20% ROCE by FY27-FY30

Overall Tone: Neutral

Key Financial Highlights

Metric	Value	YoY Change
Revenue	₹1,713 Cr	N/A
Net Profit	₹14.4 Cr	N/A
EBITDA	N/A	N/A
EPS	N/A	N/A
OPM	12.9%	N/A

What Changed

Hikal Limited reported FY26 revenue of ₹1,713 crores and net profit of ₹14.4 crores, reflecting a significant shift from prior quarter performance. The company highlighted margin expansion with EBITDA reaching 12.9%, up from previous periods. Operational improvements were evident in Q4 FY26, where standalone revenue rose to ₹228 crores, driven by volume growth and improved margins in pharma and crop protection segments. Management cited recovery from FDA compliance delays and increased capacity utilization to 80-85% as key contributors to operational stability. The Animal Health segment demonstrated strengthening momentum, with a strategic target of achieving INR500+ crores in revenue within 4-5 years. Capital expenditure of ₹149 crores was utilized for facility upgrades, particularly at the Panoli site, supporting long-term production capabilities. The company outlined plans for ₹900+ crores of future capex to sustain growth, including 5-6 DMF filings expected by Q4 2026. Management expressed confidence in sustaining margin improvement and achieving 15-20% CAGR in revenue by FY27-FY30, backed by a target ROCE of 18-20%. Peer comparisons indicate Hikal trades at a P/E of 33.35, lower than Sun Pharmaceutical (41.28) and Divi's Laboratories (72.41), suggesting relative valuation discount despite lower ROCE and margin profile.

Peer Comparison

Company	P/E	ROE	ROCE	Market Cap (₹ Cr)
Hikal Limited	33.35	N/A	N/A	2,484.02
Sun Pharmaceutical Industries Limited	41.28	15.11%	20.34%	4,50,643.09
Divi's Laboratories Limited	72.41	16.56%	22.09%	1,79,470.03
Torrent Pharmaceuticals Limited	80.06	N/A	N/A	1,49,108.91

Hikal’s valuation is lower than key peers on P/E basis, but its ROCE and ROE metrics are not available in the provided data, limiting direct operational comparison.

Risks & Concerns

No specific risks identified in this filing

Regulatory recovery from FDA delays remains a critical dependency

Margin improvement is still from a low base (12.9% EBITDA margin)

Capex intensity is high (₹900+ crores planned), requiring sustained cash flow generation

Quarterly Trend

Quarter	Revenue (₹ Cr)	Net Profit (₹ Cr)	OPM%
Q3FY25	447.7	17.2	16.1%
Q2FY25	452.9	18.3	16.54%
Q1FY25	406.8	5.1	14.26%
Q4FY24	514.1	33.97	18.37%

The company’s profitability showed strong improvement in Q4 FY24 with OPM of 18.37% and net profit of ₹33.97 crores, but declined in subsequent quarters, with Q3FY25 and Q2FY25 reporting lower profits despite higher revenue. Q1FY25 saw the lowest profit at ₹5.1 crores. The FY26 figures of ₹14.4 crores net profit represent a significant drop from Q4 FY24 levels, indicating volatility in quarterly performance. However, the full-year FY26 revenue of ₹1,713 crores is substantially higher than any single quarter in the prior fiscal year, suggesting possible seasonality or one-time factors in the reported results. The EBITDA margin of 12.9% for FY26 is below the OPM observed in prior quarters, indicating potential accounting differences or inclusion of non-recurring items. The company’s guidance on margin improvement implies expectations of stabilization and growth from current levels.

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