1. At a Glance
A niche animal health company with a global vaccine footprint, Hester Biosciences claims dominance in PPR and Goat Pox vaccines. But with PE near 60, flat profit growth, and some working capital acrobatics, the real question is: Can this cow-cure king milk growth again?
2. Introduction with Hook
If big pharma is the corporate jungle, Hester is that veterinarian who walked in with a needle, jabbed a goat, and walked out with 75% global market share in PPR vaccines.
- Global PPR vaccine share: 75%
- Indian Goat Pox market share: 70%
- FY25 net profit: ₹29 Cr vs FY22’s ₹39 Cr
In short: They own the goat, but can they scale the herd?
3. Business Model (WTF Do They Even Do?)
Hester Biosciences is one of India’s few pure-play animal healthcare companies operating in 4 verticals:
- Poultry Vaccines (2nd largest in India)
- Poultry Health Products
- Animal Vaccines (Goat Pox, PPR = Dominator)
- Animal Health Products
Also offers:
- Mastitis control programs for cattle
- Diagnostic lab support for poultry farms
- Seroprofiling kits
Presence in 30+ countries including India, Nepal, Tanzania.
Big partnerships include:
- Bill & Melinda Gates Foundation
- GALVmed
- Golchha Organisation
- Novapharma
4. Financials Overview
Revenue & Profit Trends (₹ Cr)
| FY | Revenue | PAT | OPM% | ROCE | ROE |
|---|---|---|---|---|---|
| FY21 | 214 | 35 | 32% | 18% | 40% |
| FY22 | 235 | 39 | 26% | 14% | 46% |
| FY23 | 266 | 28 | 19% | 9% | 31% |
| FY24 | 305 | 21 | 18% | 9% | 22% |
| FY25 | 311 | 29 | 20% | 10% | 32% |
Narrative:
- OPM compressed since FY21
- Profits still below FY22 levels
- Revenue CAGR (3Y): ~10%
- Profit CAGR (3Y): -11%
- Price CAGR (3Y): -5%
→ Investors may love the product, not the price action.
5. Valuation
Current Snapshot:
- CMP: ₹1,928
- Market Cap: ₹1,640 Cr
- EPS (TTM): ₹32.31
- Book Value: ₹369
- PE: 59x
- P/B: 5.22x
Fair Value Estimate:
- Base Case (PE 35x on ₹35 EPS) → ₹1,225
- Bull Case (PE 45x on ₹40 EPS) → ₹1,800
- Bear Case (PE 25x on ₹28 EPS) → ₹700
Fair Value Range: ₹700 – ₹1,800
→ Current price is on the expensive end of optimism.
6. What’s Cooking – News, Triggers, Drama
- Dividend declared: ₹7/share for FY25
- BRSR Report Filed: Sustainability + ESG focus
- Record Date Set: July 15
- Recent Concalls: Emphasis on expanding Africa presence & CDMO opportunities
- Capex: ₹183 Cr of CWIP still ongoing—new capacity, new game?
But… where’s the growth? Revenue up just 2% TTM.
7. Balance Sheet
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹9 Cr | ₹9 Cr | ₹9 Cr |
| Reserves | ₹271 Cr | ₹283 Cr | ₹306 Cr |
| Borrowings | ₹274 Cr | ₹244 Cr | ₹213 Cr |
| Total Assets | ₹670 Cr | ₹662 Cr | ₹653 Cr |
Commentary:
- Debt declining steadily
- No equity dilution
- Capital work-in-progress (CWIP) still ₹183 Cr = expansion underway
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹24 | ₹-77 | ₹42 | ₹-12 |
| FY24 | ₹48 | ₹-22 | ₹-26 | ₹-0 |
| FY25 | ₹65 | ₹-20 | ₹-52 | ₹-7 |
Summary:
- CFO improving
- Cash burn mainly for capex and debt servicing
- Free cash flow: Still limited
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 9% | 9% | 10% |
| ROE | 9% | 8% | 9% |
| Debtor Days | 109 | 94 | 86 |
| Inventory Days | 399 | 288 | 291 |
| Payables Days | 141 | 98 | 122 |
| CCC | 367 | 284 | 255 |
Verdict:
- CCC improved but still long
- Returns are modest, not terrible
10. P&L Breakdown – Show Me the Money
| Year | Sales | EBITDA | OPM% | PAT |
|---|---|---|---|---|
| FY23 | ₹266 | ₹51 | 19% | ₹28 |
| FY24 | ₹305 | ₹54 | 18% | ₹21 |
| FY25 | ₹311 | ₹62 | 20% | ₹29 |
→ Margins recovering. PAT almost back to FY23 level. Revenue… meh.
11. Peer Comparison
| Company | Sales (Cr) | PAT (Cr) | ROCE | PE | OPM% | Mcap (Cr) |
|---|---|---|---|---|---|---|
| Sun Pharma | 52,578 | 11,454 | 20% | 35x | 28.7% | ₹4.06 L Cr |
| Zydus Life | 23,241 | 4,665 | 24% | 21x | 30.4% | ₹98,000 Cr |
| Bajaj Health | 543 | 40 | 11% | 38x | 15.2% | ₹1,652 Cr |
| Hester Bio | 311 | 29 | 10% | 59x | 20.0% | ₹1,640 Cr |
Punchline: Niche player, niche valuation. Paying large-cap pharma prices for small-cap growth.
12. Miscellaneous – Shareholding, Promoters
| Holder Type | Jun 2023 | Jun 2024 | Jun 2025 |
|---|---|---|---|
| Promoters | 53.73% | 53.73% | 53.73% |
| FIIs | 0.45% | 0.61% | 0.51% |
| DIIs | 0.00% | 0.02% | 0.02% |
| Public | 45.82% | 45.66% | 45.73% |
- Stable promoter holding
- Low institutional interest
- Retail-led story with 12,000+ shareholders
13. EduInvesting Verdictâ„¢
Hester Biosciences has the moat, the niche, and the Gates Foundation on speed dial. But the financials are still… grazing. While FY25 showed signs of margin revival, the real test lies in execution, capex yield, and revenue scaling.
At 59x PE, the market already expects greatness.
In short: The animal is healthy. But can it gallop?
Metadata
– Written by EduInvesting Team | 20 July 2025
– Tags: Hester Biosciences, Animal Health, Goat Pox Vaccine, Niche Pharma, Vaccine Stocks, Smallcap Pharma
