Hikal Limited announced its results for the quarter and nine months ended December 31, 2025, marking a significant return to positive operational performance following regulatory cycles. Consolidated revenue for Q3 FY26 reached ₹494 crore with an EBITDA of ₹83 crore. The Pharmaceutical segment saw a strong recovery, while strategic investments in new capabilities position the company for sustained growth in FY27.
Executive Commentary: Transition to Sustainable Growth
The Executive Chairman highlighted that Q3 FY26 marks a transition from remediation to recovery, positioning the company for sustainable, higher-quality growth. Remedial measures related to the US FDA audit have been largely completed. The Pharmaceutical business experienced a significant recovery in volumes and capacity utilization returned to optimal levels. The Animal Health business also moved into commercial volumes.
Q3 FY26 Consolidated Financial Performance
The company posted strong sequential results for the third quarter:
- Consolidated Revenue: ₹494 crore (up 55% QoQ from ₹319 crore in Q2FY26).
- EBITDA: ₹83 crore, resulting in an EBITDA margin of 16.8% (up from 2.4% in Q2FY26).
- PBT before exceptional items: ₹29 crore.
- PAT: A loss of ₹6 crore, impacted by ₹38 crore in exceptional items related to the new labour code.
- Balance sheet strengthened with an improved debt-equity ratio of 0.58x.
Segmental Performance: Pharmaceuticals
The Pharmaceutical segment showed strong momentum in Q3:
- Revenue: Grew to ₹337 crore.
- EBIT Margin: 12.3%.
- Revenue Split: CDMO mix increased to 55% of segment revenue (up from 43% in Q3FY25).
The resumption of supplies is progressing well, and the company anticipates Q4 FY26 to show momentum. Strategic investments, including the High Potency lab and pilot plant, enhance positioning in high-entry-barrier areas like Oncology.
Segmental Performance: Crop Protection
The Crop Protection segment delivered revenue of ₹157 crore with an EBIT margin of 3%.
- Revenue Split: CDMO contribution grew to 57%.
The industry faces normalization due to pricing pressure, but sales at the end-customer level are improving, leading to higher enquiries. The Personal Care business is gaining traction, with commercialization of 3-4 products expected in FY27 as part of the diversification strategy.
Nine Months Ended (9M FY26) Performance
For the first nine months of FY26:
- Consolidated Revenue: ₹1,193 crore (down 9% YoY).
- Consolidated EBITDA: ₹115 crore (down 44% YoY), with a margin of 9.6%.
- Net Profit: A loss of ₹63 crore, heavily impacted by the ₹38 crore exceptional item.
Historical Context and Operational Strength
Historical highlights show revenue peaked at ₹2,023 crore in FY23 before dipping, indicating the current recovery is vital. Operationally, Hikal maintains 5 manufacturing facilities and has invested $60 Million in Capex in new assets. The company holds numerous regulatory approvals, including from the US FDA, and focuses on continuous improvement as evidenced by recent awards for employee engagement and skill development.
Source: BSE
