Hikal Limited (HIKAL) AI Stock Analysis

• Market Cap: ₹23.92B
• Dividend Yield: 0.58%
• Average Volume (3M): 34.88K
• Price to Earnings (P/E): 236.8
• Beta (1Y): 1.23
• Revenue Growth: -6.72%
• EPS Growth: -86.26%
• Country: US
• Employees: 2,061
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -2.80
• Shares Outstanding: 123,300,750
• 10 Day Avg. Volume: 44,586
• 30 Day Avg. Volume: 34,881
• PEG Ratio: 1.79
• Price to Book (P/B): 3.92
• Price to Sales (P/S): 2.66
• P/FCF Ratio: 34.59
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: ₹209.00 ▼(-7.95% Downside)

Hikal Limited's overall stock score is primarily driven by its solid financial performance, with improving profitability and operational efficiency. However, the high P/E ratio suggests potential overvaluation, which negatively impacts the valuation score. Technical analysis shows short-term bullish momentum, but long-term trends remain bearish. The absence of earnings call data and corporate events limits further insights.

Positive Factors

High Gross Profit Margin

A 55% gross margin indicates durable product-level profitability, reflecting pricing power and efficient production in APIs and crop-chemicals. Such margins support sustained R&D investment, buffer input-cost shocks, and enable reinvestment for long-term competitive positioning.

Robust Cash Generation

Strong FCF and an operating-cash-to-net-income ratio of 3.09 show excellent cash conversion, improving financial resilience. Durable cash generation funds capex, working capital and strategic initiatives internally, reducing reliance on external financing over the medium term.

Diversified B2B Business Model

A diversified B2B mix across pharmaceuticals and agrochemicals plus custom manufacturing and long-term contracts creates sticky customer relationships and recurring revenue. Ongoing R&D and partnerships support product specialization, strengthening structural competitive advantages and market reach.

Negative Factors

Inconsistent Revenue Growth

Negative historical revenue growth reflects demand variability or client concentration risks that undermine predictability. Even with signs of recovery, inconsistent top-line trends complicate capacity planning and margin sustainability, reducing confidence in steady long-term earnings growth.

Sharp EPS Volatility

A near-90% decline in EPS signals significant earnings volatility, which can stem from cyclical end-markets, one-offs, or margin swings. Persistent EPS volatility reduces visibility for investors and management, potentially constraining strategic investment and weakening stakeholder confidence.

Volatile Free Cash Flow History

Historical FCF volatility, despite a recent large TTM FCF, suggests cash generation is not yet consistently reliable. This variability can force episodic external funding or capex deferment in downturns, limiting the firm's ability to sustain long-term projects or steady shareholder returns.

Hikal Limited Business Overview & Revenue Model

Company Description

Hikal Limited, together with its subsidiaries, manufactures and sells various chemical intermediates, specialty chemicals, and active pharma ingredients to pharmaceutical, animal healthcare, biotech, crop protection, and specialty chemicals companies. It operates through two segments, Pharmaceuticals and Crop Protection. The Pharmaceuticals segment produces active pharmaceutical ingredient (APIs). The Crop Protection segment manufactures pesticides and herbicides. The company collaborates with other companies and offer solutions in contract research, custom synthesis, and custom manufacturing of intermediates and APIs. It also provides specialty biocides and antimicrobial actives, as well as additives for leather, paint coatings, paper, water treatment, personal care, building materials, and textile industries. The company was incorporated in 1988 and is headquartered in Navi Mumbai, India.

How the Company Makes Money

Hikal Limited generates revenue primarily through the production and sale of APIs and intermediates for the pharmaceutical industry, as well as a variety of crop protection products for the agrochemical sector. The company operates on a business-to-business (B2B) model, supplying its products to major pharmaceutical companies and agricultural firms. Key revenue streams include long-term contracts with clients, custom manufacturing services, and the development of specialized products tailored to specific market needs. Hikal also benefits from strategic partnerships and collaborations with global firms, enhancing its market reach and driving sales growth. Additionally, the company's focus on research and development allows it to introduce innovative products, further contributing to its revenue generation.

Hikal Limited Financial Statement Overview

Summary

Hikal Limited demonstrates solid financial health with improving profitability and operational efficiency. While revenue growth has been inconsistent, recent trends indicate recovery. The balance sheet reflects moderate leverage and a stable equity position. Cash flow metrics indicate strong cash generation, albeit with some historical volatility. Overall, the company is on a positive trajectory, with key financial metrics showing improvement.

Income Statement

Hikal Limited shows a strong gross profit margin of 55.0% TTM, with a steady increase in net profit margin from previous years to 4.9% TTM. Revenue growth rate has fluctuated, showing a decline in recent years but a recovery to a 5.2% growth in 2025. EBIT and EBITDA margins have improved significantly from 8.5% and 15.1% in 2024 to 41.7% and 17.9% TTM, respectively, indicating better operational efficiency.

Balance Sheet

The debt-to-equity ratio stands at 0.61, reflecting moderate leverage. Return on equity has improved to 7.2% TTM, suggesting better returns to shareholders. The equity ratio is at a healthy 49.9%, indicating a stable financial position and a balanced approach to financing.

Cash Flow

The free cash flow growth rate has shown volatility, with a significant positive shift to a substantial TTM free cash flow of 1,431 million. The operating cash flow to net income ratio is robust at 3.09, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio of 1.58 reflects a good conversion of net income into free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.13B	18.60B	17.69B	20.05B	19.26B	17.07B
Gross Profit	9.82B	10.22B	9.05B	8.62B	8.83B	7.70B
EBITDA	2.96B	3.33B	2.67B	2.60B	3.40B	3.24B
Net Income	633.00M	908.00M	696.02M	783.82M	1.60B	1.33B
Balance Sheet
Total Assets	0.00	25.29B	24.87B	23.85B	22.13B	19.13B
Cash, Cash Equivalents and Short-Term Investments	180.00M	178.00M	181.93M	267.30M	217.09M	168.06M
Total Debt	0.00	7.65B	8.18B	7.48B	6.75B	6.10B
Total Liabilities	-12.62B	12.67B	12.99B	12.52B	11.45B	9.80B
Stockholders Equity	12.62B	12.62B	11.88B	11.33B	10.68B	9.33B
Cash Flow
Free Cash Flow	0.00	1.43B	-174.80M	126.89M	204.19M	714.19M
Operating Cash Flow	0.00	2.80B	1.87B	3.15B	2.94B	2.29B
Investing Cash Flow	0.00	-1.36B	-1.74B	-2.92B	-2.84B	-1.56B
Financing Cash Flow	0.00	-1.44B	-270.00M	-76.80M	-55.58M	-968.68M

Hikal Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 227.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:HIKAL, the sentiment is Negative. The current price of 227.05 is above the 20-day moving average (MA) of 215.79, below the 50-day MA of 227.61, and below the 200-day MA of 295.84, indicating a bearish trend. The MACD of -8.95 indicates Positive momentum. The RSI at 20.00 is Positive, neither overbought nor oversold. The STOCH value of 5.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:HIKAL.

Hikal Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPGLIFE	76 Outperform	₹35.32B	16.39	―	0.85%	―	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
HIKAL	58 Neutral	₹23.92B	236.85	―	0.58%	-6.72%	-86.26%
SEQUENT	58 Neutral	₹52.69B	124.17	―	―	14.39%	152.14%
MOREPENLAB	57 Neutral	₹18.73B	18.99	―	0.49%	-0.29%	-29.04%
UNICHEMLAB	54 Neutral	₹26.21B	29.63	―	―	25.42%	―
INDOCO	40 Neutral	₹19.39B	-17.53	―	0.08%	-2.81%	-444.69%

Hikal Limited Corporate Events

Hikal Limited Announces Amalgamation Impacting Equity Structure

Hikal Limited has announced a significant corporate restructuring involving the transfer of equity shares due to the amalgamation of Shri Rameshwara Investment Private Limited and Shri Badrinath Investment Private Limited with Castilia Life Sciences Private Limited. This amalgamation, sanctioned by the Regional Director, Western Region, Mumbai, is expected to impact the company’s equity structure and potentially influence its market positioning.

Hikal Limited Announces Promoter Group Amalgamation

Hikal Limited has announced a Scheme of Amalgamation involving its promoter group companies, which has been approved by the Regional Director, Ministry of Corporate Affairs. The scheme involves the amalgamation of Shri Rameshwara Investment Private Limited and Shri Badrinath Investment Private Limited into Castilia Life Sciences Private Limited, resulting in the transfer of shares held by the former two companies to Castilia. This restructuring is expected to streamline the company’s promoter group structure, potentially enhancing operational efficiencies and shareholder value.