Hikal Limited reported strong recovery in Q3 FY26, with consolidated revenue reaching INR494 crores and EBITDA at INR83 crores (16.8% margin). The company successfully navigated regulatory scrutiny, leading to improved capacity utilization. Both Pharma and Crop Protection segments are on a recovery path, with Pharma showing EBIT margin improvement to 12.3% and Crop Protection beginning its transition into specialty chemicals. Hikal remains focused on deleveraging and high-ROI investments.
Financial Highlights for Q3 and 9 Months FY26
Hikal Limited announced its financial results for the quarter and nine months ended December 31, 2025. Consolidated revenue for Q3 stood at INR494 crores, achieving an EBITDA of INR83 crores, translating to a robust margin of 16.8%. This signifies a clear return to operational profitability. For the 9 months FY26, consolidated revenue reached INR1,193 crores, with an EBITDA margin of 9.6% (INR115 crores). The company also announced an interim dividend of INR0.2 per share.
Finance costs saw a reduction of 17% YoY due to lower debt levels. However, an exceptional item of INR38 crores was accounted for related to new labor code charges, which resulted in a quarterly loss before adjusting for this item.
Pharmaceutical Segment Momentum
The Pharmaceutical division delivered revenue of INR337 crores in Q3 FY26, with an EBIT margin of 12.3%. Management confirmed that remediation measures following regulatory concerns are now substantially implemented, marking a turning point. The focus is shifting from remediation to operational excellence. The segment is seeing increased volume utilization and progress in advancing key starting materials (KSMs) for global innovators into Phase III clinical trials, with commercial launch scheduled for FY ’28.
R&D efforts are yielding a strong pipeline in high-barrier areas like oncology, CNS, and gastroenterology. The company noted that its CDMO project funnel has improved in velocity and technical complexity.
Crop Protection and Diversification
The Crop Protection segment recorded revenues of INR157 crores during the quarter, with an EBIT margin of 3%, reflecting ongoing pricing pressures and structural overcapacity, particularly from China. To mitigate this, Hikal is accelerating its portfolio diversification strategy, focusing on the Personal Care specialty chemicals vertical.
The Personal Care business is gaining traction, with 2 products commercialized in Q3 and volume ramp-up expected over the next 9 to 12 months. The company anticipates meaningful revenue from this segment starting in the next fiscal year (FY ’27). Strategic focus remains on operational excellence and cost optimization to stabilize margins.
Strategic Progress and Future Outlook
Hikal highlighted its resilience due to a diversified portfolio and deep customer partnerships, some spanning over 25 years. The company is strategically investing in high-technology segments, including the operationalization of a new high-potency laboratory and R&D center in Pune.
Regarding capital expenditure, the total capex for the current year has been prudently cut down to INR150 crores, compared to the initial guidance of INR200 crores. For the Animal Health business, management is confident in achieving their long-term goal of building a business exceeding INR500 crores plus over the next 4 to 5 years, with FY ’27 showing increased utilization.
Management expressed strong confidence that the challenging period of regulatory and external headwinds is behind them, paving the way for a path of higher quality growth and improved margins starting from FY ’27 onwards.
Source: BSE
