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Last Updated : Jul 01, 2020 03:27 PM IST | Source:

Hold Hester Biosciences; target of Rs 1190: ICICI Direct

ICICI Direct recommended hold rating on Hester Biosciences with a target price of Rs 1190 in its research report dated June 28, 2020.

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ICICI Direct's research report on Hester Biosciences

FY20 revenues grew a mere 2.9% mainly due to 4% decline in poultry segment (66% of revenues) amid lower vaccination drive due to sharp increase in maize prices and Covid-19 (C19). Animal healthcare segment grew 22% YoY to Rs 139.6 crore (26% of revenues), driven by strong export growth and lower base. EBITDA margins contracted 798 bps YoY to 30.2% mainly due to increase in field force count (140-150 from 80) and negative operational leverage. EBITDA de-grew 18.6% YoY to Rs 55.4 crore. PAT fell 29.8% to Rs 29.2 crore due to a below expected operational performance.


The animal health segment, on the other hand, is expected to remain strong due to tenders and strong export potential. However, fortunes in the poultry segment would continue to weigh on sentiments. We arrive at a target price of Rs 1190 based on 22x FY22 EPS of Rs 54.

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First Published on Jun 30, 2020 12:20 pm