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Hester Biosciences Ltd.

BSE: 524669 Sector: Health care
NSE: HESTERBIO ISIN Code: INE782E01017
BSE 00:00 | 01 Jul 2162.20 38.30
(1.80%)
OPEN

2101.05

HIGH

2185.00

LOW

2078.45

NSE 00:00 | 01 Jul 2147.50 25.20
(1.19%)
OPEN

2132.95

HIGH

2180.85

LOW

2080.50

OPEN 2101.05
PREVIOUS CLOSE 2123.90
VOLUME 329
52-Week high 2851.75
52-Week low 1963.90
P/E 46.55
Mkt Cap.(Rs cr) 1,840
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2101.05
CLOSE 2123.90
VOLUME 329
52-Week high 2851.75
52-Week low 1963.90
P/E 46.55
Mkt Cap.(Rs cr) 1,840
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hester Biosciences Ltd. (HESTERBIO) - Chairman Speech

Company chairman speech

Dear Shareholders As always I am pleased to present the performance of your Companyfor FY 2020-21.

FY 2020 21 IN RETROSPECT

The year FY 2020-21 has been in line with the financial forecasts and budgets.

After few setbacks faced in FY 2019-20 due to a combination of external and internalfactors we introspected ourselves. Corrective measures were identified and implemented.We ensured better planning and put necessary internal systems in place.

The pandemic has taught us to have a business model that is flexible agile resilientand above all one that needs to deal with unforeseen circumstances. During the pandemicwe witnessed examples of people uniting to fight the crisis and scientists working at arapid pace to develop vaccines coming up with holistic solutions for our end users. Whilethe challenge is not behind we remain cautiously optimistic of better days ahead.

At Hester we did our bit by contributing Rs 8.50 million to the PM CARES Fundas well as by distributing essential supplies like masks and sanitisers to combatCOVID-19 in the district of Mehsana Gujarat. While our health and safety measures havealways been uncompromised we took added measures and followed all guidelines set by theGovernment of India to ensure the safety of our employees.

BUSINESS OVERVIEW OF HESTER INDIA

Your Company reported net sales of Rs 2084.77 million in FY 2020-21 compared to Rs 1694.25 million in the previous year thereby registering a growth of 23%.

Domestic sales were at Rs 1 693.17 million as compared to Rs 1316. 04 million in FY2019-20 thereby registering a growth of 29%. The Company performed better than expectedin the domestic market.

On the other hand export sales were at Rs 215.88 million as compared to Rs 224. 19million in FY 2019-20 thereby registering a de-growth of 4%. The hit in the exportbusiness was mainly due to our inability to make international shipments as COVID-19 hadvery restricted flight movements for most of the financial year.

The higher performance in domestic sales neutralised the negative impact oninternational sales thus enabling us to achieve our yearly target.

Overall Poultry Health Division showed a growth by 25% and the Animal Health Divisionregistered a growth of 19%.

Your Company recorded a net profit after tax of Rs 399 .01 million in FY 2020-21 asagainst Rs 312.24 million in the previous year with a growth of 28%. while the quarter onquarter gross margins have always been oscillating within a band the overall year'sEBIDTA margins have improved.

In the year gone by the progress of our subsidiaries was impacted to some extent.

HESTER NEPAL

FY 2020-21 has not been as per expectations. Due to the pandemic FAO tendering for PPRhad been very low notwithstanding the restrictions in air shipments for the supply ofvaccines internationally.

Hester Nepal has registered a loss of Rs 9 .73 million with a turnover of Rs 47.52million in FY 2020-21 against a turnover of Rs 161.80 million in FY 2019-20.

TEXAS LIFESCIENCES

As mentioned before through Texas Lifesciences Hester aims at achieving completeself-reliance for the supplies of health products. A majority portion of our animal andpoultry health products are manufactured at Texas. We are in the process of expanding thecapacity besides making further improvements in the manufacturing processes as well asadding specialised human resources to increase the overall efficiency and performance.

Texas Lifesciences reported net sales of Rs 180 .01 million in FY 2020-21 as comparedto Rs 128. 03 million in the previous year thereby registering a growth of 41%.

HESTER TANZANIA

The company is in the process of establishing additional sales and distributionnetworks keeping in focus the demands from Tanzanian markets as well as of the EastAfrican countries.

HESTER AFRICA

The project construction is completed. We hope to release the first batches of thelocally manufactured PPR vaccine and New Castle Disease vaccine in this financial year.

GOING FURTHER

For many years we at Hester have established a strong portfolio around poultry whichaccounts for 73% of our FY 2020-21 revenues.

However I believe it is now time for us to graduate and build our large animalbusiness as we see a very high potential for growth in this area. Government of India isalso undertaking large-scale immunisation programmes for cattle swine sheep and goatwhich are a major source of income for the livestock farmers in the country.

In line with this we have deepened our innovation and capital allocation focussed onthe large animal healthcare.

We are actively partnering with various institutions to get the technology fordeveloping vaccines for the emerging diseases that require attention. This year we haveentered into an agreement with ICAR-IVRI (Indian Council of Agricultural Research –Indian Veterinary Research Institute) for getting technologies to develop vaccines forClassical Swine Fever Sheep Pox and Lumpy Skin Disease. The registration for thesevaccines is in process and we hope to commence the commercial production and marketing forall these vaccines by the end of this financial year.

The recently launched herbal product division is primarily going to focus on thelong-term chronic illnesses in the animals complementing our range of allopathic healthproducts. This division is expected to give us substantial results in increasing the topline in the coming financial year.

Above all at Hester we strongly believe technology as well as human resourcetogether make the place succeed. So far throughout the pandemic despite seeing some lowsand difficulties we have not had any layo_s and pay cuts. Salaries have been given ontime. This year we maintained an average of 14% of salary increment across theorganisation right from the month of April 2021. Announcements were made well in time andthis has helped us maintain and boost the overall motivation of our employees.

UPDATES ON THE HESTER'S INITIATIVES IN DEVELOPING COVID 19 VACCINE

IIT Guwahati (our technology partner) is in the process of developing the master seedbased on which Hester shall take the project further towards developing the vaccine.

On 27 May 2021 an MoU was signed between Bharat Biotech and Gujarat Covid VaccineConsortium (GCVC) of which Hester is a part. Hester shall provide the completeinfrastructure at its Gujarat plant for manufacturing the Drug Substance for COVAXIN forBharat Biotech.

IN CONCLUSION

Hester is now in an aggressive expansion mode. On one hand we have plans to growcapacities organically on the other we are actively pursuing inorganic opportunities inIndia and internationally.

We have undertaken extensive market research to ensure that we are present in the rightbusinesses and markets having a strong growth potential. We are confident that ourinvestments will generate sustainable returns without impacting the quality of our balancesheet.

While taking an aggressive posture Hester has in mind and is conscious of the factthat aggression coupled with stability will pay higher dividends.

Warm regards
Rajiv Gandhi
CEO & MD

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