Release Date: May 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hester Biosciences Ltd (BOM:524669, Financial) achieved a significant milestone by reaching the INR300 crore revenue mark, with consolidated revenue up by 18% quarter-on-quarter and 14% year-on-year.
- The Animal Health division showed resilience with a 12% quarter-on-quarter and 8% year-on-year growth despite regulatory challenges.
- The Poultry Healthcare division experienced a robust 22% growth in Q4, driven by industry recovery and strategic product introductions.
- The company successfully reduced its debt by INR30 crore, reflecting prudent financial management.
- Hester Biosciences Ltd (BOM:524669) received the final milestone grant payment from BIRAC, enhancing its manufacturing capacity for veterinary vaccines.
Negative Points
- The company faced challenges due to regulatory changes, leading to the discontinuation of two brands in the Animal Health division.
- There was a slight sales dip in the Healthcare division in Q4 compared to the corresponding quarter.
- Hester Africa reported a net loss of INR18 crore for the year, impacted by macroeconomic factors and foreign exchange losses.
- The company is still in the process of developing and commercializing new products, which may take time to generate significant revenue.
- The dairy sector's growth is slow due to the fragmented nature of the industry and the need for consolidation and increased vaccination efforts.
Q & A Highlights
Q: With the recent uptick in poultry prices, do you see farmers spending more on poultry vaccination, and what kind of uptake do you expect in your core business?
A: Yes, the poultry industry is on an upswing, leading to a progressive approach in poultry farming. This will likely result in increased demand for vaccines, and we expect this trend to continue. - Rajiv Gandhi, CEO and Managing Director
Q: Can you provide an update on the utilization of the new plant in Nepal?
A: Nepal has shown good progress with a turnover of INR13 crore. We have more than double the capacity available, and we are optimistic about further growth. - Rajiv Gandhi, CEO and Managing Director
Q: Is the recent growth in the poultry business a one-off, or do you see a structural change in the industry?
A: The poultry industry is on an upswing, and we expect this positive trend to continue. Factors such as stable feed prices and increased demand for poultry products support this outlook. - Rajiv Gandhi, CEO and Managing Director
Q: What are the expectations for the Tanzania plant in FY25 and FY26?
A: We are optimistic about the Tanzania plant's future. Despite macroeconomic challenges, we are building a robust distribution network and expect significant progress in the coming months. - Rajiv Gandhi, CEO and Managing Director
Q: How are you addressing the demand in the dairy sector, given the rise in lending and insurance requirements?
A: We are working with stakeholders to ensure vaccination and insurance coverage for dairy farmers. This includes identifying distributors and creating a robust distribution network. - Rajiv Gandhi, CEO and Managing Director
Q: When can we expect the formal approval for the lumpy skin vaccine?
A: We are developing the lumpy skin disease vaccine and expect to be ready by next year when the government starts purchasing the vaccine. - Rajiv Gandhi, CEO and Managing Director
Q: Can you provide an update on the global PPR eradication program?
A: The program is spearheaded by the United Nations Food and Agriculture Organization. While funding is improving, we are ready to supply when orders come in. - Rajiv Gandhi, CEO and Managing Director
Q: How does the increasing heat stress and climate change impact the poultry sector and your business?
A: Controlled housing in poultry farming is becoming more prevalent, leading to more scientific farming practices. This increases the demand for vaccines, biosecurity, and other healthcare products. - Rajiv Gandhi, CEO and Managing Director
Q: What kind of losses are expected from the African subsidiary this financial year?
A: We are hopeful that the situation will improve within a year. The losses are mainly due to macroeconomic factors, and we expect to be back on track soon. - Rajiv Gandhi, CEO and Managing Director and Nikhil Jhanwar, CFO
Q: What are the expected revenue growth and margins for the next financial year?
A: We are optimistic about better performance this financial year compared to the last. We aim to maintain a growth rate similar to the previous year. - Rajiv Gandhi, CEO and Managing Director and Priya Gandhi, Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
