ICICI Direct's research report on Hikal
Hikal is predominantly a B2B player that provides intermediates and active ingredients to global pharmaceutical, animal health, crop protection and specialty chemical companies. Pharma & crop protection comprise 54% & 46% of sales, respectively. Pharma business (including animal healthcare) is currently divided into 60:40 ratio between APIs and CDMO • In crop protection, ~70% of sales are derived from CDMO while remaining is from proprietary products, specialty chemicals & specialty biocides • One of the largest suppliers of Gabapentin API (CNS). In crop protection, one of the largest suppliers of Thiabendazole (TBZ).
Outlook
Upgrade from REDUCE to HOLD as we await recovery in EBITDA margin to reach base level of 18-20% and also consistency in performances. Valued at Rs 375 i.e. 18x FY25E EPS of Rs 20.7
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
