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Hikal: 'China plus' opportunity adds to conviction for capex

For FY21 and FY22, Hikal is spending close to Rs 600 crore in capacity enhancement, where the major part of the benefit will accrue in FY24

October 28, 2021 / 11:34 AM IST
Hikal: 'China plus' opportunity adds to conviction for capex

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Hikal Ltd (CMP: Rs 551, Market cap: Rs 6,776 crore) is one of the few CDMO (contract development and manufacturing organisation) businesses that have exposure to the promising end-markets of pharma and crop protection chemicals. This makes it reasonably placed to capitalise on the “China plus” strategy although near-term hiccups are being felt due to supply-chain disturbances. Strong show in crop protection business The Q2 top line growth of 26 percent year on year (YoY) was chiefly led by the crop...

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