Hester Biosciences Books Rs 85.768 Crore Loan-Change Gain

Hester Biosciences Limited recorded an Rs 85.768 crore exceptional gain for the six months ended 30 September 2026 after its wholly owned Hester Biosciences Africa Limited subsidiary revised a Gates Foundation loan, cutting principal from US$12 million to US$5 million, waiving accrued interest and making the replacement borrowing interest-free.

What changed in the Gates Foundation loan?

Hester Biosciences Africa Limited, or HBAL, amended its Gates Foundation loan during the six months ended 30 September 2026, reducing outstanding principal by US$7 million from US$12 million to US$5 million. The amendment also waived all accrued interest and made the revised US$5 million borrowing interest-free.

Hester Biosciences accounted for the amendment as a substantial modification under Indian Accounting Standard 109, or Ind AS 109, on financial instruments. The company said the present value of the revised cash flows, discounted using the original effective interest rate, differed by more than 10% from the original liability. Under this treatment, the original borrowing was extinguished and a new liability was recognised at fair value.

The resulting Rs 85.768 crore gain was recognised as an exceptional item in the consolidated financial results for the September 2026 half year. It was not reported as revenue from operations, which rose to Rs 175.156 crore from Rs 155.074 crore in the corresponding six months of 2025.

How much did the loan change affect Hester Biosciences profit?

The loan modification added Rs 85.768 crore to Hester Biosciences’ consolidated profit before tax for the six months ended 30 September 2026. Profit before exceptional items and tax was Rs 42.368 crore, compared with Rs 37.223 crore a year earlier, while reported profit before tax reached Rs 128.136 crore.

Consolidated profit after tax rose to Rs 117.363 crore from Rs 31.627 crore in the prior-year half. Tax expense increased to Rs 10.773 crore from Rs 5.596 crore. The Rs 5.145 crore increase in profit before exceptional items and tax was smaller than the Rs 85.768 crore exceptional gain, showing that the debt revision was the main driver of the reported profit increase.

The gain was concentrated in the quarter ended 30 June 2026, when exceptional items totalled Rs 85.349 crore. Exceptional items were Rs 0.419 crore in the quarter ended 30 September 2026, taking the six-month total to Rs 85.768 crore; profit after tax was Rs 96.732 crore in the June quarter and Rs 20.631 crore in the September quarter.

How did Hester Biosciences’ operating segments perform?

Hester Biosciences’ Poultry Healthcare segment drove revenue growth in the six months ended 30 September 2026, with revenue rising to Rs 124.397 crore from Rs 90.141 crore a year earlier. Animal Healthcare revenue declined to Rs 50.759 crore from Rs 64.933 crore, leaving total consolidated revenue from operations at Rs 175.156 crore versus Rs 155.074 crore.

Poultry Healthcare segment result increased to Rs 44.977 crore from Rs 22.750 crore, while Animal Healthcare segment result fell to Rs 5.448 crore from Rs 16.634 crore. Total segment results consequently rose to Rs 50.425 crore from Rs 39.384 crore before finance cost of Rs 6.065 crore and the Rs 3.941 crore share of profit from the joint venture.

Costs changed over the same periods. Finance cost rose to Rs 6.065 crore from Rs 4.017 crore, and depreciation and amortisation increased to Rs 14.121 crore from Rs 8.536 crore. Employee benefits expense declined to Rs 30.227 crore from Rs 30.783 crore, while other expenses rose to Rs 50.580 crore from Rs 47.978 crore.

How did the loan revision affect borrowings and cash flow?

Hester Biosciences’ consolidated non-current borrowings declined to Rs 43.354 crore at 30 September 2026 from Rs 89.964 crore at 31 March 2026. Current borrowings fell to Rs 58.774 crore from Rs 98.291 crore, while total liabilities decreased to Rs 207.912 crore from Rs 310.152 crore.

The filing does not separately attribute the full reduction in borrowings to the Gates Foundation amendment. Consolidated cash flows for the six months show Rs 9.234 crore of long-term borrowing repayments, Rs 3.263 crore of net short-term borrowing repayments and Rs 2.145 crore of interest paid.

Net cash generated from operating activities was Rs 49 crore for the six months ended 30 September 2026, compared with Rs 17.478 crore in the corresponding period of 2025. The cash-flow statement deducts the Rs 85.768 crore gain on substantial modification of borrowing from profit before tax of Rs 128.134 crore in reconciling to operating cash generation. Cash and cash equivalents ended the period at Rs 23.539 crore, against Rs 2.767 crore at 31 March 2026.

What else changed in Hester Biosciences’ group structure?

Hester Biosciences divested its remaining 11% holding in Texas Lifescience Private Limited during the quarter ended 30 September 2026. The board had approved the sale of 43.81% out of its 54.81% holding on 11 March 2026, and Texas Lifescience ceased to be a subsidiary from 27 March 2026.

The consolidated group included HBAL, Hester Biosciences Nepal Private Limited, Hester Biosciences Kenya Limited, Hester Biosciences Tanzania Limited as a step-down subsidiary, and Thrishool Exim Limited as a joint venture at 30 September 2026. The joint venture’s share of profit was Rs 3.941 crore for the half year, up from Rs 3.201 crore a year earlier.

Hester Biosciences’ standalone results did not include the Rs 85.768 crore consolidated exceptional gain. Standalone profit after tax was Rs 31.371 crore for the six months ended 30 September 2026, compared with Rs 15.047 crore a year earlier, while standalone profit before tax rose to Rs 42.091 crore from Rs 20.170 crore.

Conclusion

Hester Biosciences’ consolidated half-year profit was substantially shaped by HBAL’s revised Gates Foundation loan. The Rs 85.768 crore exceptional gain arose from accounting for the reduction of principal from US$12 million to US$5 million, the waiver of accrued interest and the interest-free replacement loan, while profit before exceptional items and tax increased by Rs 5.145 crore.

The next disclosures can show the effect of the revised interest-free US$5 million liability on finance cost, borrowings and cash flow after the September 2026 half year. Hester Biosciences did not disclose a repayment schedule or future target for the amended loan, leaving the future balance and terms to subsequent reporting.