Life sciences firm Hikal Ltd reported 27% decline in consolidated net profit at Rs 24.47 crore for the quarter ended March 31, 2020. Its net profit in the year-ago period stood at Rs 33.34 crore, according to a regulatory filing.
Total income fell to Rs 380.72 crore in the fourth quarter of last fiscal from Rs 457.55 crore in the same period a year ago. Net profit fell to Rs 84.43 crore last fiscal from Rs 103.06 crore in 2018-19.
Total income too dipped to Rs 1,510.96 crore in 2019-20 from Rs 1,591.87 crore in the previous year.
Commenting on the results, Jai Hiremath, Chairman & Managing Director, Hikal Ltd said, “This year we faced several headwinds in our business. During the year, the busines operations in both divisions were impacted due to several reasons. In Q2 our Crop Division, we were affected by severe flooding at our Mahad facility and water cuts at our Taloja facility. Also, in Q2 in our Pharmaceutical division we took a plant shutdown to increase capacities and incurred a onetime exceptional item of Rs 15.4 crore which resulted in a loss of revenues and profits. The nationwide lockdown imposed by Government of India to contain COVID-19 pandemic further disrupted the operations resulting in loss of revenue towards the end of Q4.
Our Crop protection division recorded sales of Rs 620 crore as compared to Rs 650 crore last year, a degrowth of 4.6%. Our Pharmaceutical division recorded sales of Rs 887 crore as compared to Rs. 939 crore last year, a degrowth of 5.6%. Despite the lower sales and full operating costs in the 4 quarter, our EBITDA margins improved to 18.6% as compared to 18.4% in the corresponding quarter of the past year.
While we experienced challenges in FY19’20, we are positive about the prospects of both businesses going forward. The pandemic has led to additional inquiries from customers who are looking to de-risk their current supply chains. We are confident that we will be able to capitalise on these opportunities for future growth. We have used this valuable time to focus on efficiencies and better utilization of our resources.
We have implemented several cost rationalization and efficiency improvement measures across the company. These include increasing our domestic sourcing of key raw materials as well as investing in increasing automation, mechanization and implementing Industry 4.0 initiatives which will lead to improvement in operations efficiency.
The Board of Directors have maintained the dividend for the financial year 2019 - 20 as compared to previous year and have proposed a final dividend of Rs. 0.20 per share (10 % of Face Value). So along with the Interim dividend of Re. 1 per share (50 % of Face Value) paid in February 2020, the total dividend for the financial year 2019 - 20 will be Rs. 1.20 per share (60 % of Face Value) which is the same as FY18 ’ 19.
With strong customer relationships, a healthy product pipeline, new manufacturing capacity coming on stream for future growth, supported by a healthy balance sheet we are confident of sustainable growth with improvement in margins and return profile in the years to come." said Hiremath.
