Did Pharma Firm Hikal Limited Face a Loss of Rs 22.4 Crore in Q1?
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Synopsis
In a surprising turn of events, Hikal Limited has reported a significant net loss of Rs 22.4 crore for Q1 FY26, a stark contrast to the profits earned in the same quarter last year. The drop in revenues and rising expenses raise questions about the company's financial health.
Key Takeaways
- Hikal Limited reported a net loss of Rs 22.4 crore for Q1 FY26.
- Revenue from operations decreased by 6.5 percent to Rs 380.4 crore.
- EBITDA fell significantly to Rs 251 million.
- Company's expenses reached Rs 411.8 crore, primarily due to rising raw material costs.
- Post-announcement, Hikal's shares fell by 5.56 percent on the NSE.
Mumbai, Aug 7 (NationPress) The life sciences enterprise Hikal Limited disclosed a net loss of Rs 22.4 crore for the quarter that concluded on June 30 (Q1 FY26), showcasing a stark contrast to a net profit of Rs 5.1 crore during the same timeframe last year (Q1 FY25).
The Mumbai-based organization's revenue from operations decreased by 6.5 percent, totaling Rs 380.4 crore, down from Rs 406.8 crore in Q1 FY25, as reported in its stock exchange statement.
Sequentially, revenue also saw a decline from Rs 552.4 crore reported in the prior quarter (Q4 FY25).
Total income for the quarter reached Rs 381.4 crore, compared to Rs 407.3 crore a year earlier and Rs 552.9 crore in the March 2025 quarter.
Additionally, earnings before interest, taxes, depreciation, and amortisation (EBITDA) plummeted to Rs 251 million, down from Rs 580 million in the same quarter last year.
This decline resulted in the EBITDA margin contracting to 6.6 percent from 14.26 percent year-on-year (YoY), as indicated in the company's regulatory filing.
The company’s expenses remained elevated at Rs 411.8 crore, primarily due to soaring raw material costs, which were Rs 182 crore.
Employee costs hit Rs 62.9 crore, with other expenses recorded at Rs 105.6 crore.
Hikal reported a pre-tax loss of Rs 30.4 crore for the quarter, in contrast to a profit of Rs 6.9 crore in Q1 FY25 and Rs 68.3 crore in the preceding quarter.
A tax reversal of Rs 8 crore offered some reprieve but was insufficient to prevent the company from entering the loss zone.
Post the earnings announcement, shares of Hikal Limited experienced a drop on the National Stock Exchange (NSE), falling by 5.56 percent or Rs 17.1, settling at Rs 290.2 per share.
Founded in 1988, the company excels in delivering solutions across the pharmaceutical, animal health, biotech, crop protection, and specialty chemicals sectors.
Point of View
The recent financial downturn of Hikal Limited serves as a critical reminder of the volatile nature of the life sciences industry. While the company has shown potential in the past, this loss highlights the challenges it faces amidst rising costs and fluctuating revenue. Stakeholders should closely monitor the situation as it unfolds.
NationPress
19/08/2025
Frequently Asked Questions
What caused Hikal Limited's loss in Q1 FY26?
Hikal Limited's loss in Q1 FY26 is attributed to a decline in revenue, high expenses driven by increased raw material costs, and an overall challenging market environment.
How does this loss compare to previous quarters?
In Q1 FY25, Hikal reported a profit of Rs 5.1 crore, while the current quarter saw a net loss of Rs 22.4 crore, indicating a significant downturn.
What are the implications for investors?
Investors may need to reassess their positions in Hikal Limited, given the current financial instability and declining stock performance.
What sectors does Hikal Limited operate in?
Hikal Limited specializes in the pharmaceutical, animal health, biotech, crop protection, and specialty chemicals sectors.
What was the stock market reaction to this announcement?
Following the earnings announcement, shares of Hikal Limited dropped by 5.56 percent on the National Stock Exchange.
