Summary:
Hester Biosciences reported consolidated Q2 FY27 revenue of ₹97.91 crore, up 38%, and profit after tax of ₹20.63 crore, up 44%. First-half profit rose 271%, including an exceptional ₹85.77 crore pre-tax gain from restructuring Hester Africa’s Gates Foundation loan arrangement.
Profit is up 44% for the quarter, India is firing, and Africa has finally caught a break on its debt
If you only glance at Hester Biosciences’ latest results, one number jumps out: first-half consolidated profit is up 271%. It looks fantastic, but it deserves a second look. A big chunk of that growth comes from a change to a loan at Hester Africa, not from selling more vaccines.
Set that aside and focus on the September quarter alone, and the company still delivered a solid performance. Revenue grew 38% to ₹97.91 crore, and consolidated profit after tax rose 44% to ₹20.63 crore. India is the real engine behind this story, and the big question now is how long it can keep going.
India has a much better quarter
Standalone revenue came in at ₹82.93 crore, up 28.4% from a year ago. Profit after tax more than doubled, from ₹7.21 crore to ₹16.66 crore, and the EBITDA margin climbed to 35% from 21% in the same quarter last year.
Management credits a better product mix, greater operating efficiency and tighter cost control. Higher sales clearly played a part too, though the release doesn’t tell us how much each factor contributed. A 35% margin is encouraging, but what matters more is whether the company can hold it, rather than expecting another jump of this size next quarter.
Across the group, profit before exceptional items and tax rose 52.8% to ₹26.04 crore. That’s a useful reality check, because it shows the quarter’s improvement is genuine and not just a result of the loan-related accounting gain. One small note: the consolidated PAT figures here include non-controlling interests.
Poultry keeps growing while animal healthcare plays catch-up
Standalone Poultry Healthcare revenue grew 27% in Q2 and 37% over the first half. Hester points to institutional business, a wider market reach and stronger customer engagement as the drivers. Its feed supplements and disinfectants also sit well alongside the vaccine range.
Animal Healthcare had a better September quarter, with revenue up 34%, largely thanks to tender execution. Even so, first-half revenue is still 14% lower than last year. Q2 won back some ground after a weak Q1, but it didn’t close the gap.
Government immunisation schedules can push revenue from one quarter to another in this business. So I’d want to see the strong performance repeat over the next few quarters before treating September’s growth as the new normal.
Why the first-half profit looks so high
Consolidated PAT for the first half reached ₹117.36 crore, up 271%. The results include an exceptional pre-tax gain of ₹85.77 crore, which came from restructuring the Gates Foundation loan at Hester Africa.
Under the new arrangement, the outstanding principal fell from US$12 million to US$5 million, the accrued interest was waived, and what remains is now interest-free. That certainly eases the subsidiary’s financial burden, but it isn’t extra vaccine revenue.
A fairer way to judge recurring earnings is to look at first-half profit before exceptional items and tax. It rose from ₹37.22 crore to ₹42.37 crore, an increase of about 13.8%. To be clear, that’s a pre-tax comparison and not an estimate of adjusted PAT, but it shows why the 271% headline shouldn’t go into a forecast as it is.
Timing matters here as well. Roughly ₹85.35 crore of the exceptional gain landed in Q1, with just ₹0.42 crore in Q2. If you compare the two quarters’ reported PAT without knowing that, you’ll get a misleading picture of how the business is actually trending.
Cash flow tells another side of the story
Consolidated operating cash inflow for the first half rose to ₹49.00 crore, compared with ₹17.48 crore a year earlier. The cash-flow reconciliation strips out the loan-modification gain, so this improvement is a helpful signal to read alongside the profit numbers.
Collections helped. Changes in trade receivables released ₹11.99 crore, while inventory absorbed ₹6.32 crore. Benefits from collections can swing from period to period, so it’s better to track cash flow over time than to simply double this half-year figure.
Capital expenditure, including capital advances and work in progress, was ₹4.21 crore. Subtract that from operating cash flow and you get roughly ₹44.79 crore, before other investing and financing movements. This is my own back-of-the-envelope calculation, not Hester’s reported definition of free cash flow.
Africa still needs a helping hand
Alongside the results, the board approved an unsecured loan of up to US$1 million to Hester Africa, a wholly owned subsidiary, for business purposes and working capital. The disclosed terms are 9% annual interest over three years from the first drawdown.
Nothing was outstanding at the time of disclosure, and the agreement was expected to be signed by 15 November 2026. So the approval shouldn’t be read as money that has already been paid out.
The debt relief is a real positive, yet the fresh funding approval is a reminder that Africa still depends on financial support. For shareholders, the test is whether the business can use its improved terms to stand on its own feet and rely less on the parent. Shifting money around within the group doesn’t create new cash from outside.
