Hester Biosciences Ltd reports Net Profit of Rs. 3.56 crore and Revenues from Operations of Rs. 50.7 crore in Q1FY23

Mr. Rajiv Gandhi, CEO & MD, Hester Biosciences Ltd

August 10: One of India’s leading poultry and animal vaccine manufacturing companies, Hester Biosciences Limited, has reported a consolidated net profit of Rs. 3.56 crore and Revenue from Operations of Rs. 50.70 crores for the Q1FY23. Individually, the gross margins of the vaccines and the health products have been in line with the corresponding quarter; however, the overall margins have reduced due to the increase in the proportion of health products sales which have lower gross margins compared to vaccines. Health Products sales constituted 34% of the total sales in Q1 FY23, versus 20% in Q1 FY22.

Hester Tanzania recently received regulatory approvals for four products, with two additional products under approval. Hester Tanzania has just started commercial operations, and Revenues are expected to start in Q2. Hester Nepal has registered a 16% growth in domestic revenues; however, there were no tender sales in the current quarter due to delays in tendering by FAO and other multilateral institutions.

Going further

The company is confident of arresting the de growth in Q2 as well as hopes to improve the profitability as follows:

On the vaccine side:

1. The recent outbreak of Lumpy Skin Disease (LSD) in certain parts of the country since July 2022 is expected to result in additional sales in Q2 FY23.
2. The Company was a successful bidder in a government tender for PPR vaccine for sheep & goats, the supplies for which will likely start from September 2022.

On the Health Product side:

It is our endeavour to improve the profitability. Over the next couple of quarters, Hester will focus on growing sales on the back of improving the sales productivity of the marketing team as well as launching new products and entering new territories.

Petcare division

The Company launched a new division for Petcare during Q1 with ten products. Activities related to market development, field force establishment and product pipeline are ongoing. Petcare Division will emerge as a steady long-term growth driver, given the increasing adoption of pets in the country.

Status on Hester’s initiatives in the Covid-19 vaccine

• The Company, in consortium with Gujarat Biotechnology Research Centre (GBRC), Government of Gujarat (GoG), has entered into a term sheet agreement with Bharat Biotech India Limited to manufacture the Drug Substance for Covaxinunder the Mission Covid Suraksha Scheme of the Government of India.
• The project is to manufacture a Drug Substance equivalent to up to 7 million doses per month.
• The construction of the BSL-3 facility is nearing mechanical completion. Planning and preparation for commissioning are ongoing. The facility is expected to be ready for commercial operation in Q3FY23.
• This facility is a multi-purpose facility to handle other micro-organisms beyond Covid-19.

Other developments

1. The Company is strengthening its new product vaccine pipeline by developing new vaccines like Classical Swine Fever (CSF), Sheep Pox and an improved version of Brucella vaccines.
2. The bulk antigen production capacity expansion project is completed, and trial runs are ongoing. Expansion of Fill-Finish line capacity is expected to be completed by Q4FY23. These two expansions will double the production capacity of vaccines.
3. The recent notification by the Government of India to allow the manufacture and sale of Avian Influenza Inactivated vaccine, the H9N2 strain, will contribute to our sales from Q3.

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