Hester Bio to focus on business rationalisation

Rutam Vora Ahmedabad | Updated on June 29, 2020

Vaccine for Covid-19 to go on animal trials by November

Turbulent economic conditions in the country and abroad have hammered sales and profitability for animal vaccines major, Hester Biosciences Ltd. The company is now focusing on rationalisation of products, territorial spread of sales workforce and ‘smart’ operations in a changed dynamics of businesses post Covid-19.

“Last year wasn't good for us due to internal as well as external factors. We invested in marketing and sales for increased geographical coverage. But that didn't provide us commensurate growth because of a recessionary condition in poultry segment. So, our expenses went up and the sales went down. That resulted into reduction in topline and bottomline,” Rajiv Gandhi, Managing Director, Hester Biosciences, told Businessline. The poultry health division showed a de-growth by 5 per cent during the fiscal.

Brucellosis vaccine order soon

However, Gandhi believes that revival is just round the corner.

In an immediate boost for the company, the government’s programme on elimination of Brucellosis disease in cattle under the National Animal Disease Control Programme will unlock growth opportunity. “We have participated in the government tender and there were only two participants. So, the business would probably be divided between the two. We are now waiting for the Government to place an order, Gandhi said adding that the order has been delayed by a few months. “We expect that to happen by next month,” he added.

The market for Brucellosis vaccine is estimated at ₹80-100 crore and this would give Hester a big boost. For the Foot and Mouth Disease (FMD), which is a bigger market estimated at ₹1,000 crore, Hester plans to take a relook at its plan before venturing into FMD vaccine business.

Vaccine for Covid-19

On the tie-up with Indian Institute of Technology (IIT) Guwahati to develop vaccine for Covid-19, Gandhi said work to develop the vaccine has been initiated. “A recombinant vaccine is being developed in collaboration with IIT Guwahati. We hope to get into animal trials by November-December,” he said. The vaccine is likely to be out by about a year-and-a-half after the initial animal trials.

The company has put on hold capex or fund raising plans till the completion of the first half of the fiscal. “We plan to stabilise and consolidate our operations at present,” he said.

Hester Q4 net down

The company posted net profit of ₹5 crore for the fourth quarter ended March, 60 per cent lower from ₹12 crore in the same quarter last year. Net sales for the quarter stood at ₹41 crore, against ₹49 crore, down 15 per cent.

For FY20, the company reported net profit of ₹31 crore, down 29 per cent from ₹44 crore in the previous year. Net sales stood at ₹169 crore, down 1 per cent from ₹171 crore in the previous year.

The company’s board of directors has recommended a dividend of ₹6.60 per equity share or 66 per cent for the FY20 .

Published on June 29, 2020

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