Hikal Ltd gets reprieve from Hon’ble Bombay High court on MPCB order till Feb 22, 2022
Hikal Ltd had filed a writ petition in the Bombay High Court against the closure order of Maharashtra Pollution Control Board (MPCB) as informed on 15.02.2022 and on February 18, 2022, the Hon’ble Court was pleased to order that no precipitative action shall be taken by the authorities in the matter, till February 22, 2022.
Must read concall for HIKAL investors
hikal.pdf (1.0 MB)
Q4FY22 Concall Transacript
Investor Presentation
Legal updates :
Management reiterated that the truck that left with affluent is not the one that is involved in the incident, all the evidence is produced, court is on holidays, arguments will resume soon after. No staff are under judicial custody.
Writ petition is pending before the bench to allow them to re-open the plant, this is expected come for hearing in coming weeks. From the tone of the management it appears that they are confident of reopening the plant start working on the pending order book.
Management suggested there will be impact on the crop protection segment due to the plant closure (once open the ramping up will take time)
Post incident measures on the plant safety
on-boarded a reputed audit firm Mahajan & Aibara for our internal audit. Partnered with a reputed ESG firm and initiated focused third party audits for our entire plant network to identify and fill in gaps for further areas of
improvement.
Hi, sharing the first Q results and Investor Presentation
Hope this helps
dr.vikas
Haven’t studied the company yet. was just going through the cheif justic’s judgement on the indiankanoon website.
A recent discussion on the company revealed that the mangament is very honest and dosen’t resorts to bribing the xyz board (won’t name for obvious reasons) or its officials, so this xyz board tried to get HIKAL’s production units closed for as long as possible…
In all, the crux actually seems to match with the court’s judgement…
The judgement referred to is here : Hikal Limited vs State Of Maharashtra Thr. Gp And ... on 23 June, 2022
But, would like to know from the people following the company, why hasn’t the business recovered or is it the perception of the company that is bad as of now?
dis : not invested
According to the latest investor presentation, both the pharma and agro-chem business have been affected by problems from the clients’ side. This is in addition to the closure of Taloja plant. Now that the Taloja plant has resumed operations, it should start supplying.
disclosure: holding FOC quantity
shiv kumar
Corporate Governance of the Company seems to be reasonably satisfactory. Taloja capacity shall be ramped up in coming quarters. It appears that worst is behind and has been fully priced at current valuation.
Disclosure: Invested today at around 272 levels and forms 1% of my portfolio.
Detailed Report OF JOINT COMMITTEE IN COMPLIANCE OF ORDER OF HON’BLE NGT uploaded on www.indiaenvironmentportal.org.in
Can someone please EXPLAIN what this means in simple words?
dr.vikas
If you are referring to the BSE Notice, HIKAL (Hiremath-Kalyani) company might not have direct financial implications, but this fight between promoters on transfer of shareholding (31.36+2.65=34.01%) will have some impact on how the company is steered. Crucial decisions that might be tactical or longer term strategic decision making will be slower, and thus might affect the company, just like we have seen in other companies having Promoter turmoil.
Quantifying the impact will be difficult, but rest assured it might not be a great time holding this business, till the promoter ownership issues are resolved or clarity given to stakeholders.
this might impact the coming rally otherwise commentary & potential both are good
Does someone know how one can contact the organization for any questions as an investor?
The website mentions “email : secretarial@hikal.com”.
But I think I am blocked. Not sure why - never mailed them before
send email to rajasekhar_reddy@hikal.com
@Yogi Thanks. I’ll try
ICRA Rating Update
As per ICRA discussion with the management with regard to the court case, Management has clarified the suit pertains only to the Transfer of shares from KICL and BIFL to the Hiramath family and may not have any adverse Implications on the company’s operations.
https://www.icra.in/Rationale/ShowRationaleReport/?Id=119163
Hikal Q4 concall highlights -
Q4 outcomes -
Revenues - 545 cr, up 9 pc yoy
EBITDA - 90 cr, up 48 pc yoy, margins at 16.5 pc, up 437 bps yoy
PAT - 36 cr, up 74 pc yoy
Segment wise results -
Pharma -
Revenues - 309 vs 308 cr
EBIT - 36 vs 30 cr due lower RM costs
Multipurpose animal health plant to be operational in H1 FY 24
Other cost optimisation efforts in place
Enhanced traction from existing and new CDMO customers
Crop Protection -
Revenues - 236 vs 194 cr
EBIT - 31 vs 12 cr, due fall in RM prices
New multipurpose plant at Panoli to go live in Q1 FY 24
New opportunities in advanced stages with global innovators
Sales break up - Generics : CDMO -
Pharma - 59:41
Crop protection - 26:74
Overall for the company - 44:56
Dispute between Hiramath and Kalyani group (2 biggest shareholders) is a private dispute. Not likely to have any material impact on financial performance of the company
Pharma industry’s pricing pressures abating
8-9 generic APIs in development phase. Aim to launch 3-4 this yr
02 Pharma CDMO products likely to go commercial this yr
API plant at Panoli received zero US FDA observations during its audit
Various cost optimisation programs running currently to improve margins
Demand for agrochemicals - subdued in Q4. Expected to remain same in H1 FY24
Witnessing increased traction in enquiries in CDMO segment in agrochemicals from existing and new customers
Seeing India as a major beneficiary of China+1 shift
Expecting significant ramp up in growth and margins in next 3 yrs on the back of increased focus on CDMO operations
Expect a challenging H1 but still better than LY. Expect significant ramp up in H2
Margins expected to be better in FY 24 vs 23 despite tepid H1
Validation Batches for Animal Health CDMO contract to start in H2. Commercial quantities to start in FY 25 end
Till then, validation batches to contribute to sales
New agrochemicals plant being commissioned (next Qtr) is for both own and CDMO products
With Panoli API plant being cleared by USFDA, company now has 02 USFDA approved API plants. Gives a lot of confidence to the customers
Total capex over last 3 yrs-700 cr. Expect asset turns of 1.5 times or so in about 2 yrs. Capex for FY 24 to be around 200 cr
Full yr EBITDA margins for FY 24 should be better than FY 23 margins
R&D spends at around 4 pc of revenues
Additional Pharma revenues to flow in this yr from the capex done at Panoli and Bengaluru over last 2 yrs
Animal Pharma business to cross 500cr+ run rate in next 5 yrs
Aim to reach FY22 end bottomline by FY24 end
FY25 should be much better
Planing to take up a tracking position
