Any current/future capex/capital investment/strategic investment?

Majority of the existing capex for ongoing projects has been completed; remaining expenditure is not expected to be significant as per CFO Nikhil Jhanwar. Current focus is on regulatory approvals for completed capacity expansion, which will double overall vaccine manufacturing capacity. The BSL-3 laboratory, initially for COVID vaccine production, is being repurposed for other vaccines (human/animal) with nominal additional spend estimated to be around INR 0.5 to 2 crores. No significant new capital investment planned unless new projects arise. Company is working on four new vaccine developmen

Future growth expectations in sales/revenue/volumes?

Animal Healthcare division is growing rapidly, now contributing 42% to the top line, up from 30% last year, driven by increased vaccine sales (e.g., PPR and LSD vaccines). Vaccine business expected to increase as a percentage, though larger health products market will require more focus on health products for scale-up. LSD immunization in India seen as repeatable business with annual vaccination; potential market linked to 9 crore cattle vaccinated recently. African market growth is delayed due to economic and regulatory challenges but expected to pick up in 6-8 months; presence there position

Future growth expectations in earnings/operating earnings/profits/EPS?

Hester Biosciences is focused on achieving significant growth, targeting INR500 crores in the next 2–3 years. The animal healthcare division is growing rapidly, now contributing 42% to the top line, expected to increase further. Expansion in Africa is expected to pick up within 6–8 months despite current delays due to economic and regulatory hurdles. Vaccine sales, especially PPR and LSD, are planned to increase with stable production capacity; LSD immunization is now a repeat annual business. Health product sales in poultry are rising, balancing margins despite lower vaccine sales. New vaccin

Current/ Expected Orderbook/ Pending Orders?

PPR vaccine expected sales from current quarter till end of supply: Approximately INR 35 crores (around INR 3 crores per month) (Page 6). LSD vaccine doses expected: 5 to 6 crore doses over next three quarters, translating to INR 30 to 45 crores revenue (Page 11). PPR vaccine quantity expected: 30 crore doses post-24 quarters, translating to INR 45 crores revenue (Page 11). Challenges include funding issues in countries like Nepal and Africa due to economic constraints and regulatory delays (Pages 7, 15). Africa market facing slow pick-up; management estimates 6-8 months for recovery and bette

Any current/future new fundraising through debt or equity?

No significant new capital expenditure (capex) is expected on existing projects; majority of expenditure is already done, currently in regulatory approval stage. No mention of new fundraising through debt or equity for ongoing projects; the company feels well-covered financially for current projects. Any new projects requiring finances would be separately addressed; currently, no such announcements. Repurposing existing BSL-3 facility for vaccines will require nominal spend (estimated up to a couple of crores INR, possibly less than 50 lakhs INR), implying limited need for fresh funds. Overall

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Hester Biosciences LtdQ2 FY23Pharmaceuticals & Biotechnology

Hester Biosciences Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,953P/E: 38.0Market Cap: ₹1.6K CrSector: Pharmaceuticals & Biotechnology

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

0 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Animal Healthcare division is growing rapidly, now contributing 42% to the top line, up from 30% last year, driven by increased vaccine sales (e.g., PPR and LSD vaccines).
→Vaccine business expected to increase as a percentage, though larger health products market will require more focus on health products for scale-up.
→LSD immunization in India seen as repeatable business with annual vaccination; potential market linked to 9 crore cattle vaccinated recently.
→African market growth is delayed due to economic and regulatory challenges but expected to pick up in 6-8 months; presence there positions Hester advantageously for future demand.
→New generation vaccines (e.g., next-gen Brucella, Classical Swine Fever, Lumpy Skin Disease) under development to drive future growth.
→Sales in pharma/trading products are currently one-time but could recur.
→Overall revenue growth supported by expanded sales force and wider product reach.

Margin guidance

Category 3

→Hester Biosciences is focused on achieving significant growth, targeting INR500 crores in the next 2–3 years.
→The animal healthcare division is growing rapidly, now contributing 42% to the top line, expected to increase further.
→Expansion in Africa is expected to pick up within 6–8 months despite current delays due to economic and regulatory hurdles.
→Vaccine sales, especially PPR and LSD, are planned to increase with stable production capacity; LSD immunization is now a repeat annual business.
→Health product sales in poultry are rising, balancing margins despite lower vaccine sales.
→New vaccine developments (Brucella, Classical Swine Fever, Sheep Pox, Lumpy Skin Disease, Avian Influenza) aim to boost future revenues.
→Operating margins are expected to stabilize with improved product mix; animal health products have better ROI than vaccines.
→One-time pharma product sales have boosted recent gross margins but are not expected to be recurring.
→Overall, Hester commits to working hard for sustainable long-term profitability and growth.

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Fundraise plans

→No significant new capital expenditure (capex) is expected on existing projects; majority of expenditure is already done, currently in regulatory approval stage.
→No mention of new fundraising through debt or equity for ongoing projects; the company feels well-covered financially for current projects.
→Any new projects requiring finances would be separately addressed; currently, no such announcements.
→Repurposing existing BSL-3 facility for vaccines will require nominal spend (estimated up to a couple of crores INR, possibly less than 50 lakhs INR), implying limited need for fresh funds.
→Overall, no indication of immediate or planned fundraising through debt or equity as per the current transcript.

Order book

→PPR vaccine expected sales from current quarter till end of supply: Approximately INR 35 crores (around INR 3 crores per month) (Page 6).
→LSD vaccine doses expected: 5 to 6 crore doses over next three quarters, translating to INR 30 to 45 crores revenue (Page 11).
→PPR vaccine quantity expected: 30 crore doses post-24 quarters, translating to INR 45 crores revenue (Page 11).
→Challenges include funding issues in countries like Nepal and Africa due to economic constraints and regulatory delays (Pages 7, 15).
→Africa market facing slow pick-up; management estimates 6-8 months for recovery and better sales flow (Page 7).
→No significant capex expected; existing projects are mostly complete and in regulatory approval (Page 11).
→Positive trend observed with planned government immunization campaigns supporting order inflows (Pages 8-9, 15).

Capex plans

→Majority of the existing capex for ongoing projects has been completed; remaining expenditure is not expected to be significant as per CFO Nikhil Jhanwar.
→Current focus is on regulatory approvals for completed capacity expansion, which will double overall vaccine manufacturing capacity.
→The BSL-3 laboratory, initially for COVID vaccine production, is being repurposed for other vaccines (human/animal) with nominal additional spend estimated to be around INR 0.5 to 2 crores.
→No significant new capital investment planned unless new projects arise.
→Company is working on four new vaccine developments, leveraging existing infrastructure.
→Strategic investment includes expanding into African markets despite short-term challenges, with backing from the Bill & Melinda Gates Foundation.

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