Hikal Limited (NSE: HIKAL, BSE: 524735) reported a loss for the quarter ended Dec. 31, 2025, after booking exceptional charges linked to labour code-related provisions, while revenue rose sequentially. The board also declared an interim dividend, according to the company’s regulatory filing and unaudited results for Q3 and 9M FY26.
Q3 FY26 financial performance
On a standalone basis, revenue from operations rose to ₹4,943 million in Q3 FY26 from ₹3,185 million in Q2 FY26, reflecting a sequential recovery in volumes. Year on year, revenue was higher than ₹4,477 million reported in Q3 FY25.
Profit before tax (before exceptional items) stood at ₹288 million, compared with a loss in the preceding quarter. However, the company booked exceptional charges of ₹380 million in Q3 FY26, primarily related to incremental employee benefit provisions following the notification of India’s new labour codes. As a result, profit before tax after exceptional items turned into a loss of ₹92 million, and net loss for the quarter was ₹59 million.
Finance costs declined sequentially to ₹155 million from ₹149 million in Q2 FY26, while depreciation and amortisation stood at ₹412 million. The company reported basic and diluted EPS of -₹0.48 for the quarter.
Nine-month FY26 performance
For the nine months ended Dec. 31, 2025, revenue from operations declined to ₹11,932 million from ₹13,074 million in the year-ago period. Profit before tax before exceptional items was a loss of ₹487 million, reflecting pressure on margins across segments and lower volumes in parts of the year.
After accounting for exceptional charges of ₹380 million, net loss for 9M FY26 widened to ₹633 million. The company attributed part of the performance pressure to softer demand in certain markets and higher operating costs.
Segment performance
The pharmaceuticals segment generated ₹3,373 million of revenue in Q3 FY26, up sequentially from ₹1,895 million, while crop protection contributed ₹1,570 million, compared with ₹1,290 million in the previous quarter. For 9M FY26, pharmaceuticals revenue stood at ₹7,294 million, and crop protection at ₹4,638 million.
Segment results showed pharmaceuticals delivered a profit of ₹415 million in Q3 FY26, while crop protection recorded ₹48 million, indicating a sequential improvement in operating performance across both segments.
Dividend and corporate actions
The board declared an interim dividend of 10%, equivalent to ₹0.20 per equity share (face value ₹2), for FY26. The record date is Feb. 17, 2026, and the dividend is scheduled to be paid on or before March 12, 2026. The trading window for designated persons is set to reopen on Feb. 14, 2026.
Regulatory and operational developments
The company disclosed that sales in the pharmaceutical segment were impacted following a USFDA warning letter issued in August 2025 for its Jigani facility, with some customers deferring purchases to later quarters.
Hikal also noted that a fact-finding review is ongoing regarding irregularities in the timing of revenue recognition identified earlier in FY26. Pending the outcome, no further adjustments have been made to the financials. Additionally, legacy matters related to environmental compliance remain pending before the Supreme Court, with no incremental provisions recorded during the quarter.
Summary
Hikal reported a sequential rebound in Q3 FY26 revenue but posted a net loss after exceptional charges related to labour code-linked employee benefit provisions. Segment-level profitability improved sequentially in pharmaceuticals and crop protection. The interim dividend declaration underscores balance-sheet resilience, while regulatory developments and ongoing reviews remain key near-term overhangs for the company’s operating outlook.