Hester Biosciences Q1 FY27 Results: Standalone Profit Jumps 88%, Poultry Business Drives Growth

What Happened ?

Hester Biosciences delivered a strong standalone quarter driven by robust growth in its Poultry Healthcare business, supported by higher institutional sales, deeper market penetration, and encouraging traction in recently launched health products. However, the Animal Healthcare business remained affected by delays in government immunisation programme tenders. On a consolidated basis, revenue declined due to lower contributions from Nepal and Africa operations, while profitability increased sharply because of a one-time accounting gain related to the amendment of the Gates Foundation loan.

key details

Business & Operational Highlights:

• Standalone revenue increased 14% YoY to ₹72.66 crore.
• Poultry Healthcare revenue grew 48% YoY to ₹61.77 crore.
• Growth was driven by:
  • Higher institutional business.
  • Deeper market penetration.
  • Stronger customer engagement.
  • Healthy demand for feed supplements and disinfectant products launched during FY26.
• Animal Healthcare revenue declined 50% YoY due to delays in government immunisation programme execution rather than weakness in demand.
• Gross profit margin improved to 78% from 69%.
• Standalone EBITDA margin expanded to 36% from 21%.
• Consolidated revenue declined because of weaker business in Nepal and Africa.
• Consolidated profitability included an exceptional accounting gain of ₹85.35 crore following the restructuring of the Gates Foundation loan, where the outstanding loan was reduced from USD 12 million to USD 5 million, accrued interest was waived, and the revised loan became interest-free.

Note:

• For FY27, Hester plans to strengthen its biologicals portfolio, expand domestic and export market penetration, increase investments in research and development, improve manufacturing efficiency, and continue enhancing operational excellence and cost discipline. 

Risk Analysis

Summary:

The standalone business remains fundamentally strong, but consolidated revenue continues to face challenges from international operations and the timing of government procurement programmes.

Key Risks:

• Animal Healthcare performance remains dependent on government immunisation programme execution.
• Nepal operations continue to experience variability in institutional order timing.
• Africa business is still focused on market development and registrations.
• The sharp increase in consolidated profit was largely driven by a one-time exceptional gain rather than recurring operating performance.

Worst Case:

If government tenders remain delayed and international markets recover slowly, revenue growth could remain uneven while reported profitability normalises after the exceptional gain.

Risk Level: Medium

Company Commentary

Management highlighted the following during the quarter:

• Management reaffirmed its long-term strategy of “Building with Intent. Growing with Science.”
• The company will continue expanding its biologicals portfolio across Poultry and Animal Healthcare.
• Hester plans to increase domestic and export market penetration while investing in research, regulatory approvals, manufacturing efficiency, and operational excellence.
• Management believes investments made over recent years position the company for sustainable long-term growth despite near-term market challenges.