Hikal Q1 FY27 Results (NSE: HIKAL)
Signal: Loss narrowed
The read
Hikal's Q1FY27 shows early signs of recovery: revenue grew 5.9% YoY, gross margin expanded 380bps, and EBITDA margin improved 300bps. However, the bottom line remains in loss (-₹7.4 Cr) even after an exceptional gain of ₹8.9 Cr. Crop protection segment turned loss-making, while pharma grew but is still constrained by the USFDA warning letter. The environmental litigation continues as an overhang.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹40.28 Cr | +5.9% | -22.4% |
| EBIT | ₹-0.39 Cr | +70.7% | |
| Net profit | ₹-0.74 Cr | +67.0% | |
| EPS | ₹-0.6 | +67.0% | |
| EBIT margin | -1.0% |
P&L walk
Revenue growth aided by pharma segment; gross margin expansion 380bps drives EBITDA margin improvement, but employee cost growth and crop protection loss keep bottom line in red even after exceptional gain.
Segments
Pharma segment remained profitable with PBIT of ₹75 million, while Crop protection swung to a PBIT loss of ₹60 million, dragging consolidated profitability; the USFDA warning letter continued to impact pharma sales but segment still grew 15% YoY.
Key positives
- Revenue growth of 5.9% YoY after two quarters of decline (Q3FY26 +10.3%, Q4FY26 -6.0%)
- Gross margin expanded 380bps YoY to 54.7% on better product mix
- EBITDA margin improved 300bps YoY to 9.6%
- Net loss narrowed to ₹7.4 Cr from ₹22.4 Cr YoY
Key concerns
- Crop protection segment swung to PBIT loss of ₹60 million from profit of ₹173 million YoY
- USFDA warning letter on Jigani facility continues to impact pharma sales
- Exceptional gain of ₹8.9 Cr from salary restructure inflated profit; underlying operations still loss-making
- Employee cost grew 18.3% YoY, outpacing revenue growth
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