According to reports from CNBC TV18, Hikal reported weak March quarter performance with net profit declining 71.3% year-on-year to ₹14.4 crore from ₹50.2 crore in the corresponding quarter last year. Revenue fell 5.4% to ₹520 crore compared with ₹550 crore a year earlier, though it showed 5% sequential growth from ₹494.3 crore in Q3 FY26. The company experienced severe bottom-line pressure with EBITDA margins contracting by nearly 200 basis points YoY to 20.4% from 22.34% in the previous year, reflecting higher operational costs and pricing headwinds in both pharmaceutical and crop protection segments. Total income for the quarter stood at ₹526 crore compared to ₹552.9 crore in the year-ago period, with the revenue decline of ₹30 crore YoY highlighting struggles in core pharmaceutical and agri-chemical segments.
As reported by CNBC TV18, 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 noted that the pharmaceuticals segment's performance during the year was affected by the USFDA warning letter issued in August 2025 concerning its Jigani manufacturing facility. The company is currently navigating a transition phase where its traditional API and Crop Protection businesses are facing cyclical headwinds, with the contraction in EBITDA margins to 20.4% being concerning but expected given the global pricing environment in the chemical sector.
According to CNBC TV18, profit before tax before exceptional items stood at ₹55.4 crore versus ₹68.3 crore in Q4 FY25, marking an 18.9% decline year-on-year. However, sequentially, PBT before exceptional items improved sharply from ₹28.8 crore reported in Q3 FY26. The company reported an exceptional loss of ₹47.1 crore during the quarter, compared to an exceptional loss of ₹38 crore in the December quarter, which significantly impacted overall profitability. Employee benefit expenses increased to ₹67.2 crore from ₹63.4 crore YoY, while finance costs declined to ₹14.6 crore from ₹17.9 crore. Depreciation and amortisation expenses rose to ₹42 crore compared to ₹37.7 crore in the corresponding quarter last year. The drop to ₹14.4 crore was driven by a combination of a 5.4% decline in revenue and a 194 bps contraction in EBITDA margins, likely due to higher raw material costs and lower realizations in the pharma segment.
As reported by CNBC TV18, Hikal is focusing on operational streamlining over the past 90 days, with the company receiving environmental clearance for expansion at its Maharashtra facility in April. The company has also seen leadership transitions in its R&D wing to accelerate the Specialty Chemicals roadmap. While the Q4 numbers are disappointing, Hikal's strategic pivot toward high-value Specialty Chemicals and Personal Care represents a significant structural shift, though benefits are only expected from FY27. The expanded CDMO pipeline is expected to stabilize margins and provide long-term revenue visibility, though management anticipates these contributions will only become significant starting from FY27. Given the 71% slump in consolidated net profit, the company may prioritize capital preservation for its FY27 expansion plans over aggressive dividend payouts in the immediate quarters.
