Hikal Q4 results muted; sequential recovery driven by crop protection growth

Hikal reported a weak March quarter performance on May 20, with profit, revenue and margins declining year-on-year amid regulatory headwinds and one-time adjustments, although the company indicated signs of sequential recovery.

Net profit for Q4FY26 fell 71.3% year-on-year to ₹14.4 crore from ₹50.2 crore in the corresponding quarter last year. Revenue declined 6% to ₹519.4 crore compared with ₹552.4 crore a year earlier.

EBITDA for the quarter dropped 14.6% year-on-year to ₹105.4 crore from ₹123.4 crore, while EBITDA margin narrowed to 20.3% from 22.3%.

Despite the weaker annual comparison, the company said performance improved sequentially during the quarter. Profit after tax recovered to ₹14.4 crore from a net loss of ₹5.9 crore in the preceding quarter.

The crop protection business emerged as the key growth driver during the quarter, with segment revenue rising to ₹227.8 crore from ₹201.1 crore in the year-ago period.

The pharmaceuticals segment reported revenue of ₹291.6 crore during Q4FY26. Hikal said the segment’s performance during the year was affected by the USFDA warning letter issued in August 2025 concerning its Jigani manufacturing facility.

During FY26, the company recorded one-time strategic and regulatory accounting adjustments amounting to ₹85.1 crore, which weighed on annual profitability.

These included an impairment charge of ₹47.1 crore linked to repurposing an existing manufacturing plant for a different product portfolio, as well as an incremental ₹38 crore impact arising from revised employee benefit provisions following the notification of new labour codes by the Government of India.

The board recommended a final dividend of 20%, or ₹0.40 per equity share, taking the total dividend payout for FY26 to 30%, or ₹0.60 per equity share.

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Hikal operates across pharmaceuticals, crop protection and speciality chemicals, offering services ranging from research and development to commercial manufacturing.

Ahead of the earnings announcement, shares of Hikal closed 1.35% higher at ₹220.99 on the NSE.