Hester Biosciences - Q2FY21 Company Update - ICICI Securities

Q2FY21 revenues grew 20.8% to Rs. 53.4 crore mainly due to 27.8% growth in poultry segment to Rs. 34.3 crore as feed price stabilised and demand for milk and eggs improved. Animal healthcare segment grew 16% YoY to Rs. 13.8 crore. EBITDA margins improved 458 bps YoY to 29.6% mainly due to lower staff & other expenses, partly offset by lower gross margins. EBITDA grew 43% YoY to Rs. 15.8 crore. PAT grew 2.4% to Rs. 6.7 crore in line with operational performance and a higher tax rate.

Valuation & Outlook

After witnessing a muted performances in the last few quarters, first on account of maize price issues affecting poultry vaccines and then the Covid related disturbances, the Q2 performance witnessed a substantial revival. Going ahead, opportunities panning out from PPR, Brucella vaccine tenders being floated in near term besides increased focus on health products, growth prospects looks promising for animal segment. That said, higher dependence on poultry segment and mostly tenderised nature of animal vaccine segment in the domestic market continue to influence performances. The management intends to move away from preventive healthcare to curative healthcare as a long term strategy. We maintain HOLD and arrive at a target price of Rs. 1765 based on 30x FY23E EPS of Rs. 58.8.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Hester_CoUpdate_Oct20.pdf

Shares of HESTER BIOSCIENCES LTD. was last trading in BSE at Rs.1759.55 as compared to the previous close of Rs. 1742.2. The total number of shares traded during the day was 488 in over 124 trades.

The stock hit an intraday high of Rs. 1787.25 and intraday low of 1737.7. The net turnover during the day was Rs. 856210.

Source : Equity Bulls

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