Hikal Ltd

- No major new capital expenditure (capex) or large-scale investments are planned that would require significant new debt or equity fundraising. - Debt is currently being managed with strict control on working capital and long-term borrowings. - Debt levels have reduced by approximately INR 50 crores in the 9 months ending December 2025. - From FY '29 onwards, a significant reduction in overall debt is expected due to improved cash flows and absence of major new capex. - The company is financing growth initiatives through a balanced mix of internal accruals and existing debt. - Current capex guidance for FY '26 is about INR 150 crores (reduced from initial INR 200 crores), showing a conservative investment approach. - No explicit mention or indication of new equity fundraising in the near term was made during the call.

- FY '26 capex targeted at ~INR150 crores, down from initial guidance of INR200 crores, focused on debottlenecking, regulatory upgrades, and expanding CDMO capacities. - INR100 crores spent in first 9 months of FY '26; additional INR40-50 crores expected in Q4 FY '26. - Investment in a high-potency laboratory (Phase I) of about INR10-11 crores completed; commercial scale plant planned in FY '28. - Phased repurposing of crop protection plant over next 6-18 months based on customer contracts, involving limited capex mostly for reactors and pipelines. - Expansion of pilot scale capacity at Pune R&D centre underway for growing CDMO pipeline. - Future capex post FY '26 expected to be modest with focus on adding specific lines or plants as per customer demand; major new capex unlikely. - Capex strategy prioritizes high-ROI, targeted projects aligned with long-term growth. - From FY '29 onwards, reduced overall debt expected as cash flows improve and capex tapers off.

- Pharma volumes expected to return to double-digit growth next year after minor delays in FY '26 due to FDA impact. - Q3 FY '26 pharma volumes grew about 4%; strong recovery anticipated in H2 FY '26 and FY '27 onward. - Crop Protection business expected to remain flattish in FY '26; pricing pressures persist but stabilization expected. - New pharma products launching in FY '27 (second half) and Animal Health ramp-up by FY '28, driving growth. - Animal Health targeted to be INR 500 crores+ business in 4-5 years; volumes ramping up commercially over next 2 quarters. - Specialty Chemicals (Personal Care) segment to commercialize 3-4 products in FY '27, adding a new growth lever. - Overall growth to improve from FY '27 as remediation concludes and new product pipelines mature. - EBITDA margins expected to improve due to better fixed cost absorption and higher-margin new products.

- FY '27 is expected to mark the start of significant growth after a delayed recovery due to prior regulatory impacts; pharma segment growth will pick up strongly from early FY '27 onwards. - New products, especially in pharma and animal health, have better gross margins (45-50%), leading to higher EBITDA driven by existing asset base and operating leverage. - Personal Care segment and Animal Health business are poised for ramp-up in FY '27 and FY '28, contributing meaningfully to revenues and margins. - Debt reduction is expected from FY '29 onwards due to improved cash flows and controlled capex. - Q3 FY '26 marked a positive turning point with operational profitability and better demand visibility; momentum expected to build through Q4 and FY '27. - Overall, management is confident that the last 3 years of challenges will translate into sustained gains over the next 2-4 years, driving better earnings, profits, and EPS growth.

- The order pipeline in the pharmaceutical segment is robust and growing, with a significant number of Request for Proposals (RFPs), particularly from global innovators and emerging biotech firms. - Several key programs are advancing from lab to development and scale-up phases, improving medium-term revenue visibility. - The Crop Protection division is seeing a quick uptick in order inflow and inquiries due to recovery in end-customer volumes, despite competitive pricing. - Expansion into new geographical markets (Europe, Latin America, Middle East) is strengthening global presence and supporting order book growth. - New product commercializations in Personal Care and Animal Health segments are expected to add to order volume over the next 9 to 12 months. - Repurposing of crop protection plants is aligned to customer contracts, with phased execution planned over 6 to 18 months based on confirmed orders. - Overall, the company anticipates order inflows to resume strongly as global uncertainties ease and new capacities come online.