Hikal Ltd. announced its financial results for the quarter ended June 30, 2023. Muted volumes coupled with pricing headwinds and high-cost inventories on our customer’s side impacted topline and profitability. The performance is expected to gradually pickup and operating leverage to improve in the second half of the year.

Pharmaceutical sales were flat and stood at INR 225 crore as compared to INR 224 crore in Q1 FY23. Good traction in Generics from customers in Japan, Latin America and Middle East geographies for the newer product portfolio. New opportunities are under advanced stage of discussion with various global innovators in CDMO business. New multipurpose plant for Animal Health is on track at Panoli, Gujarat and commissioning is underway

Crop Protection revenue stood at INR 163 crore as compared to INR 154 crore in Q1 FY23. Commenting on the results, Jai Hiremath, Executive Chairman, Hikal Ltd. said,

“FY24 has started off on a challenging note due to global macro-economic pressures and high channel inventories leading to lower demand across both our businesses. The chemical industry faced difficulties due to China's opening up and depressed market conditions specifically in the Crop Protection end use markets.

 For Q1FY24, we reported revenues of INR 388 Cr. and EBITDA of INR 50 Cr. During the quarter we witnessed disruptive channel inventory correction across the supply chain in both the businesses. We were able to navigate through the market headwinds on the back of improved cost control measures and softening of certain raw materials prices.

For Q1FY24, our pharmaceutical business reported revenues of INR 225 Cr. In the pharmaceutical industry, we witnessed softening of raw material prices at the same time competitive pricing environment. On the Generics side, sales have stabilized, and the inventory is expected to normalize by end of next quarter. We expect that the off take will return to normalcy in the second half of this financial year. We have strengthened our sales network in geographies like Latin America, Middle east and Japan. On the CDMO front, we continue to have a strong future pipeline and are aggressively capitalizing on new opportunities. During the quarter, our API facility in Panoli, Gujarat, was audited by the US FDA, and the audit was concluded with ‘Zero’ 483 observations as a testament of our commitment to high standards of regulatory compliance.”