Hikal Limited (HIKAL) AI Stock Analysis

• Market Cap: ₹23.08B
• Dividend Yield: 0.58%
• Average Volume (3M): 34.88K
• Price to Earnings (P/E): 228.5
• Beta (1Y): 1.21
• 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): -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: ₹201.00 ▼(-11.47% 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

Gross margin strength

A 55% TTM gross margin indicates durable unit economics from specialty chemicals and CDMO work. High gross margins support reinvestment in R&D and capacity, provide a buffer vs. input cost swings, and underpin long-term profitability if mix and utilization hold.

Robust cash generation

Substantial TTM free cash flow and a 3.09 operating cash to net income ratio show strong cash conversion quality. Durable cash generation improves financial flexibility to fund capex, service debt, and invest in CDMO scale or R&D without relying on external financing.

Diversified B2B CDMO model

A business spanning pharma and crop protection with CDMO and R&D capabilities creates sticky, contractual revenue streams and technical barriers to entry. This diversification across end markets and long-term supply relationships supports resilience and repeatable manufacturing volumes.

Negative Factors

Inconsistent revenue growth

Negative and inconsistent revenue growth reduces forecasting reliability and hampers capacity planning for a manufacturing-centric CDMO. Persistent top-line variability can limit the ability to make confident long-term investments in facilities or sustain hiring and R&D commitments.

Earnings volatility and low net margin

A steep EPS decline signals earnings instability; despite strong gross margins, net profit margin is just 4.9% TTM. This gap suggests mix, operating leverage, or nonrecurring items are pressuring the bottom line, constraining retained earnings and long-term capital allocation.

Free cash flow volatility

Volatile free cash flow undermines predictability for capex, debt servicing, and strategic investments. In CDMO and specialty chemicals, working-capital swings and contract timing can cause FCF variability, limiting ability to smooth investments or absorb demand shocks over months.

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: Neutral
• STOCH: Neutral

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 204.75, above the 50-day MA of 222.91, and below the 200-day MA of 289.38, indicating a bearish trend. The MACD of -9.82 indicates Positive momentum. The RSI at 35.64 is Neutral, neither overbought nor oversold. The STOCH value of 32.31 is Neutral, 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	₹32.71B	16.14	―	0.85%	―	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
HIKAL	58 Neutral	₹23.08B	228.54	―	0.58%	-6.72%	-86.26%
SEQUENT	58 Neutral	₹88.78B	127.55	―	―	14.39%	152.14%
MOREPENLAB	57 Neutral	₹19.68B	19.95	―	0.49%	-0.29%	-29.04%
UNICHEMLAB	54 Neutral	₹26.38B	32.95	―	―	25.42%	―
INDOCO	49 Neutral	₹19.52B	-19.01	―	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.