Hester Biosciences FY26: Poultry execution lifts profits as Animal Healthcare waits for tender rollouts

Hester Biosciences closed FY26 with a clear split narrative: strong execution in Poultry Healthcare and delayed execution in tender-driven Animal Healthcare. In the corporate presentation for FY26 and the Q4 earnings call, management positioned the year as a phase of consolidation, operational strengthening and capacity building.

On a consolidated basis, revenue for FY26 stood at INR 332.60 crore and profit after tax (PAT) at INR 57.48 crore. Standalone revenue was INR 292.14 crore with PAT of INR 52.10 crore. The company also pointed out that FY26 profitability benefited from exceptional financial income related to a partial divestment of its stake in Texas Lifesciences.

The quarterly commentary underscored a sharp improvement in profitability. Management stated that standalone revenue grew 22% in Q4, while PAT rose 174%. At the consolidated level, management said revenue grew 22% in Q4 and 7% for the full year, while PAT increased substantially in Q4 and for the full year, almost by 100%.

Revenue mix stayed poultry-heavy, but the stated aim is balance

The presentation gives a clean snapshot of how the year played out across divisions. On a standalone basis, Poultry Healthcare contributed 71% of divisional revenue in FY26, while Animal Healthcare contributed 29%. On a consolidated basis, the split was 62% Poultry Healthcare and 38% Animal Healthcare.

Management was asked about the steady-state mix and said the company is aiming to return to a more balanced profile, closer to a 50:50 mix between the two divisions, so that it is not hyper-dependent on one segment. It also indicated that the R&D pipeline focus is higher on Animal Health biologicals going forward.

Poultry Healthcare: growth, product mix, and the H9N2 milestone

Management credited the FY26 improvement to stronger execution in Poultry Healthcare, favorable product mix and operational discipline. The Poultry Healthcare division was described as delivering a strong performance, growing 41% in Q4 and 21% for the full year. The company attributed this to deeper market penetration, expanded placements, stronger field execution and sustained demand across its vaccine portfolio.

A key operational milestone in Q4 was the receipt of both marketing and manufacturing licenses for the H9N2 Avian Influenza vaccine. Management described this as an important milestone that strengthens the biologicals portfolio in the poultry segment.

The company also framed H9N2 as more than a single-product opportunity. Management stated it has developed an integrated avian influenza management approach covering vaccination, farm hygiene, bird immunity and environmental management. It also introduced complementary health products focused on gut health, along with probiotics and disinfectant solutions aimed at improving post-vaccination outcomes and farm-level disease control.

Animal Healthcare: demand intact, but tender timing hurt execution

The Animal Healthcare division was impacted by delays in tender-led immunization programs. Management repeatedly framed this as timing-related rather than demand-related. It said that execution under the National PPR immunization program improved during Q4, with supplies of 6.3 crore doses in the quarter.

However, management acknowledged that the overall Animal Healthcare performance for FY26 continued to reflect the earlier delays. This dynamic matters because Animal Healthcare includes large government immunization programs where the timing of rollouts can create uneven quarterly numbers.

The Petcare segment was described as gradually scaling across selected therapeutic and supplement products and remaining a long-term focus. When asked directly about share in pet vaccinations, management stated the company has none at present because it does not have commercialized vaccines in the pet division.

International operations, Africa strategy, and capacity investments

Hester operates three manufacturing plants across India, Nepal and Africa. The company described itself as the world’s largest supplier of PPR vaccine and a supplier to the WOAH PPR vaccine bank, and also highlighted its position as a leading LSD vaccine supplier across Africa.

On Africa, management said the company continued to participate in the GALVmed-led VITAL 2 program, which focuses on vaccine awareness, adoption and ruminant livestock health improvement initiatives across Africa, including Kenya, Nigeria and Tanzania. It also said the Africa strategy is evolving towards more structured and selective execution, with focus on registrations, market development and R&D. Management stated registrations were expanded in key African markets and on-ground presence strengthened through country-level teams.

In the Q&A, the CEO said there are three or four private animal vaccine producers on the African continent and Hester is one of them, while many governments have smaller state-owned units and most vaccines are still imported.

On manufacturing and infrastructure, management stated that during FY26 the company capitalized its Fill-Finish and BSL-3 facilities. The Fill-Finish facility was positioned as enhancing drug product capacity and adding flexibility for future scale-up across domestic and export markets. For BSL-3, management stated it is undertaking optimization initiatives aligned with current operational requirements to improve utilization efficiency and operating cost over the long term.

Working capital focus and capital allocation signals

Investors flagged receivables and bad debt write-offs in the call. On receivables, the CFO said the increase was partly because over 33% of sales occurred in Q4, and that the company is working to reduce overall receivable days. On provisions and write-offs, the CFO said these largely relate to the provision of debtors as required and a few old non-recovered debts that were identified and written off.

On leverage, management highlighted balance sheet deleveraging. The CFO said total debt reduced to around INR 70 crore from INR 102 crore and that debt-to-equity is about 0.19 times, which is comfortable.

The call also provided an explicit capital allocation datapoint. Management said an exceptional item in profitability was linked to a partial divestment of its stake in Texas Lifesciences, and stated that priorities going forward are centered on strengthening and scaling the core biologicals and vaccine business where it sees stronger long-term opportunities and synergies.

Takeaways from FY26

The company’s FY26 story is best read as a combination of operational execution and mix shift. Poultry Healthcare delivered growth and helped lift profitability, while Animal Healthcare was held back by the timing of tender rollouts despite management stating demand remains intact.

For FY27, management’s stated focus is disciplined growth, operational efficiency, better capacity utilization and working capital management. It also flagged the two key external risks that can shape near-term outcomes: volatility in tender business timing and raw material cost pressure linked to geopolitical developments and supply chain disruptions. The credibility check for investors will be whether the company can translate its expanded infrastructure, new poultry vaccine licenses, and Africa registrations into steadier, repeatable execution across both divisions.