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Hikal Ltd.

BSE: 524735 Sector: Health care
NSE: HIKAL ISIN Code: INE475B01022
BSE LIVE 15:40 | 18 Aug 207.25 -1.30
(-0.62%)
OPEN

205.00

HIGH

208.50

LOW

205.00

NSE 15:31 | 18 Aug 207.00 -1.30
(-0.62%)
OPEN

207.90

HIGH

208.50

LOW

205.00

OPEN 205.00
PREVIOUS CLOSE 208.55
VOLUME 2272
52-Week high 256.10
52-Week low 161.75
P/E 24.61
Mkt Cap.(Rs cr) 1,704
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 205.00
CLOSE 208.55
VOLUME 2272
52-Week high 256.10
52-Week low 161.75
P/E 24.61
Mkt Cap.(Rs cr) 1,704
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hikal Ltd. (HIKAL) - Chairman Speech

Company chairman speech

Chairman’s Message

Dear Shareholders

The financial year 2015-16 ended on a satisfactory note. We registered revenue growthof 6% to 9256 million from 8718 million in the previous year and a 2% increase in ourprofits compared to the previous year. This growth was achieved in a very challengingyear. The Board of Directors recommends a dividend of 50% for the year.

The first half was slow because of the postponement of supplies by our major clientsbut the second-half results made up for the shortfall. Our Pharmaceutical division grew by6% from 5372 million to 5692 million and our Crop Protection division grew by 7% from3343 million to 3561 million. Though there has been an erosion in prices of some of ourmajor products we have been able to maintain our EBITDA margin at 20% by operationalexcellence and other cost-cutting initiatives. Our debt / equity ratio improved to 0.89compared to 1.02 last year.

In the current financial year 2016-17 we are making significant investments to enhanceour capabilities. We are focusing on:

• Upgrading our quality systems and infrastructure to comply with latest US FDAand other regulatory requirements

• Expanding our environmental control systems

• Capacity expansion across all our sites for existing products to meet growingdemand from our expanding client base

• New projects for multinational companies with whom we have signed long-termcontracts

• Research and development Besides undertaking custom / contract manufacturing formajor clients we are also introducing new products for direct market access

• We are also looking at allied businesses in the animal health and biocidessectors

• We are continuing to widen our client and product base in both thePharmaceutical and Crop Protection divisions and have appointed experienced marketingpersonnel to cater to diversified global markets

• To deliver on these initiatives we have employed more staff in our R&DMarketing and Human Resources departments.

We are changing our business model and organization to achieve these goals. Based onthe new strategy and significant capital expenditure we expect healthy growth in thecoming years. Some of our senior management professionals who retired during the year werereplaced by highly qualified personnel. We have appointed a seasoned scientist to head ourR&D division. He will look at new technologies and develop products for our own sales.Last year we filed four drug master files (DMFs) which is a big improvement compared toprevious years. We expect to do better in the coming year since we now have a robustpipeline.

Several new clients are approaching us based on our past record of delivery andcompliance business ethics and technical capabilities.

We give utmost importance to regulatory compliance and quality to meet US FDA EU andother regulatory authority requirements. We are also investing in training to improve ourwork culture. We take our corporate social responsibility (CSR) seriously and haveundertaken several projects across all our sites. We are already seeing the benefits of'Srijan' our CSR initiative.

Looking ahead Hikal is creating a solid foundation in infrastructure R&D andhuman resources. We are confident of achieving sustainable growth with the new team andstrategy we have put in place. To manage the expected growth we have received financingon favourable terms with extended repayment periods at a lower cost. This will be ofimmense help to us as we are a capital-intensive company with long gestation periods dueto regulatory approvals.

I would like to express my gratitude and appreciation to our employees clientsbankers shareholders and other partners for their support.

We look forward to a successful 2016-17.

With regards

Jai Hiremath

Chairman and Managing Director