Hikal clarifies Mahad unit is operating normally

The company said there has been no closure at the unit.

Hikal clarified on Wednesday (11 March 2020) that the Mahad unit, which received the closure notice from Maharashtra Pollution Control Soard (MPCB), contributed Rs 260 crore, translating to 16% of turnover of the listed entity for entire financial year 2018-19.

"There has been no closure at the said unit and the unit has been operating normally. We are working with the MPCS to resolve the matter amicably and are confident of a positive outcome," Hikal said in a release.

Hikal being a responsible care certified company stands by its commitment to long term sustainability and ethical way of doing business, it added.

On 6 March 2020, Hikal announced that it received a notice from MPCB for closure of Mahad unit based on a complaint received from the local community in Taloja. The complaint mentioned that a tanker of an authorised transporter, carrying by-product of Hikal was found near the river Kasadi in Taloja. This material was en-route for further processing to a MPCB approved manufacturer located in MIDC Dhule.

Following the order, Hikal said it was representing to MPCB for withdrawal of the closure notice and submitted all relevant documents proving that the company is not responsible for any pollution and or polluting activities in or near the river. The company also filed a writ petition in the Bombay High Court for a stay.

It, however, said that there is a possibility of some impact on the company's operations at Mahad site until this matter is resolved.

Shares of Hikal slumped 10.97% to Rs 89.25. It hit 52-week low at Rs 87.20 during intraday trade.

Hikal's consolidated net profit fell 3.5% to Rs 28.36 crore on a 3.2% slip in net sales to Rs 392.51 crore in Q3 December 2019 over Q3 December 2018.

Hikal is engaged in the manufacturing of various chemical intermediates, specialty chemicals, active pharmaceutical ingredients (APIs) and contract research activities. The firm offers pharmaceuticals and agrochemicals. Its segments include crop protection and pharmaceuticals.

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