This small-cap stock rallied over 7 per cent on the back of stellar Q2 and H1 FY 25 results!

Hester Biosciences’ shares soared by more than 18 per cent to touch an intraday high of Rs 2,645 on Monday. The company announced its Q2 & H1 FY25 Results on October 28, 2024, in which Standalone Divisional Product sales were up by 12 per cent & net Profit was up by 38 per cent. Consolidated Divisional Product sales were up by 21 per cent & net Profit was up by 108 per cent doubling from last year's quarter.

Standalone Financial Highlights

The divisional product sales have shown growth by 12 per cent and 24 per cent in Q2 and H1 FY25 respectively.

Animal Healthcare Division

In Q2 FY25, the Animal Healthcare Division maintained its upward trajectory with 4 per cent growth in the quarter and 20 per cent growth in H1, driven by sustained growth in the Dairy Sector and Product Introductions. The strong domestic demand for milk and dairy products continued into Q2, further boosting sales within the dairy sector. The feed supplements, dewormers and anti-infective to support herd health continued to grow in Q2. The newly launched brand isumovet MP, a pain relief product, and protinc Keto+, showed strong sales trends.

Supporting National Immunization Programs. The Goat Pox vaccine continued to play a crucial role in preventive vaccination against Lumpy Skin Disease in cattle. Supplies of the PPR vaccine for sheep and goats remained steady as part of the Government of India’s National Immunization Programs.

Poultry Healthcare Division

In Q2 & H1 FY25, the Poultry Healthcare Division achieved a commendable growth of 20 per cent and 27 per cent, respectively. Vaccine sales grew by 21 per cent in Q2, supported by a significant 59 per cent increase in exports, continuing the strong performance seen in Q1. To enhance disease control measures in poultry farms, we introduced a new disinfectant,which is also contributing to the growth of our health products segment.

Petcare Division

In Q2 FY25, the Petcare Division achieved a growth of 12 per cent and 20 per cent in Q2 & H1 FY25 respectively. During the quarter, Hester launched Diet Fortify, a range of pet food designed to address lifestyle-related health issues in pets. This new product, developed with inputs from veterinarians, strengthens Hester’s market position while offering science-based nutrition to improve pet health.

Standalone Profitability Analysis

The gross profit margin remained stable in Q2 FY25 due to the product mix, it saw a 6 per cent increase in H1 FY25, driven by a more optimal product mix. Higher revenue from divisional product sales led to better absorption of fixed costs, improving the EBITDA margin by 2 per cent. Absolute PAT rose by 38 per cent, aligning with sales growth, and the PAT percentage increased by 3 per cent, highlighting enhanced operational efficiency.

Consolidated Financial Highlights
Consolidated results include operations of subsidiaries from Nepal and Tanzania.  

Hester Nepal achieved a net profit of Rs 0.03 crore in Q2 FY25, reversing from a loss of Rs 0.71 crore in Q2 FY24. The subsidiary fulfilled export orders from government tenders and met domestic vaccine demand, showcasing its growth potential. Hester Nepal remains debt-free with strong cash flows from the quarter.

Hester Africa reduced its net loss to Rs 2.37 crore in Q2 FY25, down from net loss of Rs 4.92 crore in Q2 FY24. Hester Africa is actively participating in international tenders and meeting trade demands across various African countries, with increasing awareness and demand for vaccines.

In conclusion, we remain focused on diversifying our product portfolio by introducing new, innovative solutions across all segments. Alongside this, we continue to enhance our operational efficiency, driving profitability and growth. Our goal is to position Hester as a holistic animal health company, meeting the evolving needs of the industry through a comprehensive range of products and services.

Hester Biosciences Ltd is one of the leading animal health care companies & the second largest poultry vaccine manufacturer in India. Founded by Mr. Rajiv Gandhi in 1987, it has now a presence in over 30 countries & has a key market in India, Nepal & Tanzania.

This Small-Cap stock is trading at Rs 2,366. The company has a market cap of Rs 2,028 crore. The stock price has jumped 43.02 per cent in the last year. The company has been maintaining a healthy dividend payout of 24.8 per cent.

Investors should keep an eye on this Small-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.