Hikal

Hikal Limited is a Mumbai-based chemicals company. It specialises in research, development and manufacturing of fine chemicals, agrochemicals and pharmaceutical intermediates.

In 1988, the company started manufacturing and selling chemicals, intermediates, medicines and insecticides. Hikal Chemical Industries Limited (HCIL) was a joint venture between the Hiremath family and Surajmukhi Investment and Finance Limited, a fully-owned subsidiary of Kalyani Steels Limited.

Hikal Limited became a full-fledged public limited company in 1994. The year 2000 saw the rebranding of Hikal Chemical Industries Ltd to Hikal Ltd. The company's plan to diversify into agrochemicals, pharmaceuticals and biotech is reflected in the name change. In 2005, Hikal Ltd and Crompton Corporation USA signed a long-term agreement to produce and supply a next-generation crop protection product.

In 2008, the company founded Acoris Research Ltd., a fully operational contract research facility situated at the International Biotech Park Pune. A year later in 2009, the company enhanced its manufacturing capabilities. The construction of a new multi-purpose plant for active ingredients in crop protection at the Taloja site, in Maharashtra, was successfully concluded. It commissioned several new multipurpose Active Pharmaceutical Ingredient (API) plants in Bangalore, which holds approval from the US Food and Drug Administration (FDA). A new multipurpose pharmaceutical intermediates plant was established in Panoli, Gujarat.

The market capitalisation of Hikal Limited is over ₹3,700 crore as of January 11, 2024. Hikal share price has gained over 70% in the last three years.

Business operations

Hikal’s business is divided into two segments – crop protection and pharmaceuticals, with a broad portfolio of goods and services to meet the client's changing demands. In its crop protection segment, the company combines research and technology, production skills and intellectual capital to deliver top-notch crop protection products, including insecticides, fungicides, herbicides, biocides and intermediates.

Hikal Limited provides active pharmaceutical ingredients, active ingredients and intermediates to international clients. Its facilities are also designed to cater to the customised requirements of clients in the United States, Europe and Japan. There was a substantial increase in its global customers in 2023 after the introduction of new products within the antidiabetic therapeutic category.

The crop protection division experienced a 12% annual revenue growth, reaching a total revenue of ₹907.9 crore in FY23. The pharmaceutical division reported revenues amounting to ₹1,115 crore during the same period.

The company operates five manufacturing facilities across India situated in Taloja and Mahad in Maharashtra, Panoli in Gujarat and Jigani in Karnataka. It also runs a research & technology centre in Maharashtra’s Pune. These facilities undergo regular inspections by multinational corporations and global regulatory authorities. Hikal's R&D has a comprehensive infrastructure that includes 11 synthetic laboratories, four analytical labs and one process intensification lab.

Financial highlights

– Hikal Limited's revenue from operations for FY23 stood at ₹2,023 crore, up by 4% compared to ₹1,943 crore in FY22.

– EBITDA (earnings before interest, taxes, depreciation, and amortisation) decreased to ₹262.5 crore as against ₹345.4 crore for the previous year, a decline of 24%.

– Hinal Limited’s profit after tax (PAT) of the company decreased to ₹78.4 crore as against ₹160.5 crore for the previous year, a decline of 51%.

— The earnings per share (EPS) for FY23 was ₹6.36 compared to ₹13.02 in the previous financial year.