Hester Biosciences Limited (NSE: HESTERBIO) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Nisha Shetty
Rajiv Gandhi — Chief Executive Officer and Managing Director
Nikhil Jhanwar — Chief Financial Officer
Priya Gandhi — Deputy Director – Business Operations
Analysts:
Unidentified Participant
Rushab Shah — Analyst
Meg Jain — Analyst
Presentation:
operator
. Ladies and gentlemen, good day and welcome to the Hyster Biosciences Q1 FY26 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an opportunity by pressing Stars and zero on your touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Nisha Shetty. Thank you. And over to you, .
Nisha Shetty
Am. Thank you, Anushka. Good afternoon everyone. On behalf of ICICI Securities, I welcome you all on Q1 FY26 earnings conference call of Hester Biosciences. And I thank the Hester Biosciences management team for giving us this opportunity to host this call today. On this call we have with us Mr. Rajiv Gandhi, CEO and Managing Director. Ms. Priya Gandhi, Executive Director and Mr. Divesh Maru, CFO. I will now hand over the call to the Hester management team for their opening remarks. Thank you. Over to you, ma’.
operator
Am. Ladies and gentlemen, it seems like the line for the management has been disconnected. Please stay connected till I rejoin the lines. Ladies and gentlemen, thank you for waiting patiently. The management’s line has been displayed. Has been connected. Thank you.
Priya Gandhi — Deputy Director – Business Operations
Yes. Shall we start?
operator
Yes. You could speak.
Priya Gandhi — Deputy Director – Business Operations
Okay. Thank you. Good afternoon everyone. This is Priya Gandhi. Thank you for joining us on this call for our Q1 FY26. As always, we really appreciate your continued interest and belief in our journey. One which is rooted in purpose and long term value creation. Q1 FY26 has presented to be a mixed quarter with a lower standalone performance but a strong performance on a consolidated front. While our India business has faced some headwinds due to timing delays in institutional orders, we saw a notable turnaround in our Africa operations which has driven the overall profitability higher. Despite the dip in the top line, our profitability has remained intact.
Supported by a series of focused actions over the past few quarters. We worked on standardizing key processes across our plant functions. Tightening cost controls, making deliberate choices around product mix that positively favor the profitability. We also prioritized efficiency in how we deploy our teams. Growing capabilities where needed while maintaining leaner structure. Overall, these are not reactive measures but a part of sustained effort to strengthen our organization’s resilience and readiness for scale. On a standalone divisional product wise performance which has stood at 63 crore which reflects of 14% degrowth and PAT declining by 7%. Mainly on account of delayed government institution programs in our Animal Health division.
That said, our EBITDA and PAT margins have held steady supported by cost optimization and operational efficiency. Despite the top line pressure, our focus on improving internal efficiencies and managing product mix has helped in protect our profitability. Coming to our Animal Health division particularly, which includes both the ruminant as well as the pet care business which saw a 33% decline primarily due to the deferred execution of our two large immunization programs for PCR and lumpy skin disease. For lumpy skin disease in which we use our we provide our goat pox vaccine. These programs are typically tender driven and tend to have an organic and a non linear timeline.
While this quarter bore the brunt of those delays, we do expect traction and a return in Q2. At the same time, we ensured continuity in the field through stable demand for our core products in the line of therapeutics have also introduced alternate products in key geographies where there were earlier regulatory challenges. I want to say that these are not cancellations but just deferrals and we expect execution to begin picking up in Q2 and beyond. The fundamentals of our business remain strong. On the pet care front we continued our market development efforts especially in the western part of India.
This includes deeper veterinarian engagement, expansion of distribution and focused outreach programs. While early stage we are seeing good signals in terms of repeat demand and prescription interest as we build scale. We believe segment will start continuing more meaningfully to the top line in the coming quarters. Coming to our poultry healthcare division which has been which has recorded a little bit of a growth of 2% has led by our sustained demand in our key vaccines, namely the Newcastle disease vaccine and Marek’s vaccine. Our peat supplements and disinfectants launched last year are gaining acceptance and we expect their contribution to improve further over the next two quarters.
We also expand our technical support engagement effort with our customers, especially integrators and large poultry players and that will help us to maintain strong market presence despite a broader industry volatility. On a consolidated level, divisional sales has gone up despite of the dip that we see on a standalone basis and our pack has grown by over 100% driven primarily by improved international performance and margin control. We focused a lot on maintaining the cost discipline and execution efficiency across execution of efficiency across regions and that has started reflecting in our results. I’m happy to share that Hester Africa has not only recovered the loss that it had incurred in the same quarter last year, but it has also made profit of 5 crore in this quarter and this was on a top line of 17 crore, up significantly from 2 crore in the corresponding quarter in the last period.
This turnaround was driven by improved commercial execution and better market penetration. Our facility in Tanzania is now stabilized and we are leveraging that base to expand our presence in regions with high demand for ruminant and poultry vaccines. We are cautiously scaling our footprint across priority markets in the continent and are optimistic about sustaining profitability here. And Africa continues to be a long term strategic market for us. Coming to Hester, Nepal, it has shown a consistent performance as typical of this geography. Quarterly revenues can vary due to timing of institutional orders rather than underlying demand. That said, our market position remains strong and we continue to maintain leadership across categories.
We remain confident in operational momentum and the pace of regulatory clearances and product registration that will support sustained performance going forward. While external factors have weighed us on the quarter’s standalone performance, we’ve used this period to make significant internal improvements. We’ve realigned our sales and marketing approach to be more field focused. We’ve strengthened our R and D prioritization around products. One key focus area this quarter has been enhancing our preparedness for our upcoming launch of the avian influenza vaccine which we had spoken about getting launched in Q1. Everything from our side is clear, just waiting for some regulatory clearances which are anticipated to come in this quarter anytime.
We’ve also expanded our feed, supplement and disinfectant range and initial feedback from the market has been encouraging. On the international front, we are focusing on capacity utilization, improving logistics and response time and growing local engagement, particularly in Africa where we selectively expanded our team to better address commercial opportunities. Looking ahead, we remain optimistic about the remaining part of FY26 with institutional demand expected to normalize combined with increased momentum in newer markets across our pet care and poultry portfolios, we are confident of returning to growth in the coming quarters and on an overall consolidated performance which gives us further confidence that our strategic foresight that we place in terms of geography, portfolio internal capabilities are headed in the right direction.
We remain inspired, focused and ready, staying true to our purpose in animal healthcare while pursuing innovation led growth. Thank you all for patiently hearing me out and we now look forward to taking your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star n1 on their touch tone telephone. If you wish to remove yourself from the question queue you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles. Before we take the first question, I would like to remind participants, please limit your questions to two per participants so that the management is able to address questions from all participants.
The first question is from the line of Rushab Shah from Bugle Rock pms. Please proceed.
Rushab Shah
Hi, thanks for the opportunity. So my first question is, could you comment on the FMD vaccine? Because in one of the 2020 calls you had mentioned that. Yes, in the long run as the biosciences would get into FMT vaccines. So what is the status out there? Could you please comment on that?
Priya Gandhi
SMD is a disease which is of a very high national and in fact even international importance. However, yes, we may have at some point expressed our interest or desire, but at this point of time we are not into FMB and we don’t have any short term plan of getting into that right away.
Rushab Shah
Okay, so my second question is how big is the poultry vaccine market? Globally? Since domestically you have a 30% market share, but globally, how big is that market?
Rajiv Gandhi
Yeah, Rajiv, Rajiv Gandhi. These statistics are not ready with us at the moment on the whole global market scenario. Sorry for that. Probably it could be answered offline later on.
Rushab Shah
Okay, fine. Thank you sir.
Rajiv Gandhi
Thank you.
operator
Thank you. The next question is from the line of Harshal Mehta from Zen Nivesh. Please proceed.
Unidentified Participant
Hello. Am I audible?
Rajiv Gandhi
Yes.
Unidentified Participant
Congratulations sir, for a great turnaround in your African operations. So my first question is sir, as per my understanding, poultry segment is always been a cyclical business. And we were expecting the cycle to, you know, begin the up move since many quarters now. But the numbers are still not showing that enough strength any more color maybe for the subsequent quarters that you would like to share.
Rajiv Gandhi
Yes, poultry in a way being cyclical. Yes, feed, you know, it is even very cost sensitive. The if you really go to see if you take the poultry market, we have had a marginal growth on the poultry side, 2%, but overall there has been a dip. So I think what we have done is at least we have been able to maintain our turnover, etc. And we are very confident that this will now go up. You might say that every time we say that we have that confidence, but it is something which we are also dependent on market forces and yes, but having said that, within the current situation we are doing our best and we are definitely now have taken up an objective to gain more market share in the coming months.
And that should probably give us an upward trend irrespective of the dynamics of the poultry Industry.
Unidentified Participant
Amazing. Sir. Sir, my next question is. So talking about your Nepal business. So what is your long term strategy with Nepal? Because it’s. It’s not growing. It. It’s not growing at all for many quarters now. So.
Priya Gandhi
So the Nepal plant was specifically built to cater to the worldwide eradication PPR program. And I mean for various reasons which are beyond our control, it has been quite fluctuating. Especially Covid was impacted that quite a bit. Having said that going forward we are going to be needing more capacity given the demand which is also going to come in Africa. So within our three plants we will look at optimizing our capacity across these three plants that we have given the rising demand that we see in the continent of Africa.
Unidentified Participant
Okay, so just a follow up on that. African business only. So you have seen African business impact on consolidated numbers going ahead. So there was a huge turnaround in the African business for this quarter. So you see how it can affect the consolidated numbers for subsequent quarters.
Priya Gandhi
I mean if the trend continues, it will affect in a positive way which we are hoping to have at the same time. I mean we really don’t want to comment whether this is the trend. It will continue to happen. But yes, all we can say is that there is a lot of demand and we are working very hard in developing and commercializing products specific for the continent of Africa. Very localized, which are very much in demand. But difficult really to comment right now on whether this trend is going to continue in the next quarters or whether it is going to fluctuate.
But yes, I think as a base we started off something on a very positive on.
Rajiv Gandhi
Yes. And extending this, what Priya mentioned the current business as what we have done and there are more registrations also coming in from various African countries. So even if there is a dip in one type of business, I am sure we would be able to somehow compensate through the new additional business that we would get. But it would be prudent for us to say that we have started the trend. We will try our best to uphold it.
Unidentified Participant
Amazing. Sir, congratulations once again for the, you know, superb turnaround in African options. All the best, sir.
Rajiv Gandhi
Thank you.
operator
Thank you. We take the next question from the line of Meg Jain from Gomel one llp. Please proceed.
Meg Jain
Yes, thank you. So my first question is when is your BSL3 facility likely to be capitalized and will the entire 176 crore work in progress as on March 2025 be capitalized?
Rajiv Gandhi
Yes, the BSL3 facility was specifically made to address and manufacture the COVID bulk antigen as you all are aware, thank God that Covid has gone away. But yes, that has left us with a facility which we are trying to get it repurposed and we are in progress to getting it repurposed. Probably we should get the permission in the next few months and then we have plans on how to use this BSL3 facility to increase our product range for animal vaccines is a lag which we have to accept.
Meg Jain
Okay, for my second question, please share your insights on the kind of interaction Hyster is having with other countries on PPR eradication program. Also, when will the African Swine fever vaccine launch in Africa?
Rajiv Gandhi
The PPR vaccine is mainly tender business so it is centralized earlier by fao. Now it has been moved to an African agency. We are regularly in touch with them and there are absolute follow ups. And besides that we are also targeting the private, whatever small the private market for PPR is. We are focusing on quite a few countries in Africa. African Swine Fever we have not yet got any visibility on the African Swine fever vaccine. There is no vaccine currently available in the world, but we are as much scouting to how to get into the manufacturing of African Swine fever.
We have a few leads but at this point of time it would be inappropriate for us to talk anything on that vaccine at this point. You can take it, we are working on it and we have no outer timeline.
Meg Jain
Okay.
Rajiv Gandhi
Thank you, thank you.
operator
Thank you. A reminder to the participants, in order to ask a question please press star N1.
Rajiv Gandhi
I think there are no more questions, ma’. Am.
operator
Alright, so as there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Priya Gandhi
Thank you everyone. It was nice interacting and is encouraging for us to be here present quarter on quarter and present our results. As mentioned that yes, Q1, the standalone for Q1 has seen a little bit of a dip but the consolidated performance is giving us a lot of confidence that whatever strategies etc we are putting in place are taking shape across geographies and portfolios. And yes, we are here to serve you all and the animal healthcare industry. So thank you all for your continued support. On behalf of ICICI securities limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.