Hikal Limited (HIKAL) AI Stock Analysis

• Market Cap: ₹20.97B
• Dividend Yield: 0.58%
• Average Volume (3M): 34.88K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: -6.72%
• EPS Growth: -86.26%
• Country: IN
• Employees: 2,061
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 1.80
• 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): 2
• Revenue Forecast (FY): ₹16.63B

• Rating: 55 Neutral
• Price Target: ₹178.00 ▼(-21.60% Downside)
• Action: Reiterated Date: 03/10/26
• Date: Action: Reiterated 03/10/26

The score is primarily supported by improving profitability and strong cash generation, but is held back by a notably bearish technical trend (below major moving averages with negative MACD) and limited valuation support given the negative P/E and low dividend yield.

Positive Factors

High and improving margins

Sustained high gross margin (55% TTM) and rising operating margins reflect durable process advantages and pricing power in specialty chemistry. This margin profile cushions input cost swings, funds R&D and capex, and supports healthier operating leverage over the medium term.

Strong cash generation

Robust cash conversion (OCF/net income 3.09) and material TTM free cash flow provide self‑funding capacity for capex, debt service and strategic investments. Reliable FCF reduces reliance on external financing and enhances resilience through industry cycles over multiple quarters.

Sticky B2B CDMO and R&D model

A focused CDMO/CRAMS business serving pharma and crop protection with in‑house R&D creates recurring, contract‑based revenue and higher switching costs. Structural outsourcing trends in pharma/agro underpin long‑term demand and support repeatable, stickier customer relationships.

Negative Factors

Inconsistent revenue growth

Intermittent top‑line performance limits visibility and undermines capacity planning and return on invested capital. Persistent revenue volatility can depress utilization, lengthen payback on incremental capex, and make multi‑period forecasting and client diversification harder.

Moderate leverage

A debt/equity of ~0.61 denotes moderate leverage that, while manageable, reduces financial flexibility. In the face of cyclical downturns or elevated capex needs, interest and principal commitments may constrain strategic moves or force higher external funding over the medium term.

Input‑cost exposure

Material exposure to raw material and energy price swings can compress margins and increase working capital volatility. For a chemical manufacturer, persistent commodity or energy inflation can erode free cash flow and require pricing renegotiations that take multiple quarters to implement.

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

Financials are solid with improving profitability/efficiency (55.0% gross margin TTM; net margin up to 4.9% TTM; EBITDA margin 17.9% TTM) and strong cash generation (operating cash flow to net income 3.09; FCF positive at 1,431m TTM). Offsetting this, revenue growth has been inconsistent despite a 5.2% recovery in 2025, and leverage is moderate (debt-to-equity 0.61).

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	17.34B	18.60B	17.69B	20.05B	19.26B	17.07B
Gross Profit	8.45B	10.22B	9.05B	8.62B	8.83B	7.70B
EBITDA	2.37B	3.33B	2.67B	2.60B	3.40B	3.24B
Net Income	-130.00M	908.00M	696.02M	783.82M	1.60B	1.33B
Balance Sheet
Total Assets	24.00B	25.29B	24.87B	23.85B	22.13B	19.13B
Cash, Cash Equivalents and Short-Term Investments	340.00M	178.00M	181.93M	267.30M	217.09M	168.06M
Total Debt	7.20B	7.65B	8.18B	7.48B	6.75B	6.10B
Total Liabilities	12.11B	12.67B	12.99B	12.52B	11.45B	9.80B
Stockholders Equity	11.89B	12.62B	11.88B	11.33B	10.68B	9.33B
Cash Flow
Free Cash Flow	1.28B	1.43B	-174.80M	126.89M	204.19M	714.19M
Operating Cash Flow	2.64B	2.80B	1.87B	3.15B	2.94B	2.29B
Investing Cash Flow	-1.10B	-1.36B	-1.74B	-2.92B	-2.84B	-1.56B
Financing Cash Flow	-1.49B	-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: Neutral
• 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 191.37, above the 50-day MA of 199.27, and below the 200-day MA of 261.33, indicating a bearish trend. The MACD of -7.93 indicates Positive momentum. The RSI at 30.29 is Neutral, neither overbought nor oversold. The STOCH value of 14.74 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	₹31.11B	43.39	―	0.85%	―	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
UNICHEMLAB	61 Neutral	₹21.71B	2.94	―	―	25.42%	―
MOREPENLAB	57 Neutral	₹20.86B	20.54	―	0.49%	-0.29%	-29.04%
HIKAL	55 Neutral	₹20.97B	-118.51	―	0.58%	-6.72%	-86.26%
INDOCO	49 Neutral	₹17.64B	-18.14	―	0.08%	-2.81%	-444.69%