Hikal incubates animal health, personal care businesses for growth

Hikal Ltd., the active ingredients & intermediates company, has recast its growth strategy around diversification, capital efficiency and higher-value chemistry, choosing adjacent businesses that can use its manufacturing assets, regulatory systems and multinational customer relationships.During COVID-19, the next generation of leadership, led by Sameer Hiremath, Vice-Chairman and Managing Director and Anish Swadi, Senior President, Business Transformation, examined how far pharmaceuticals and crop protection, which are the core business, could grow, their capital needs and likely returns. As per the advice of consultants, the company came out with a 2030 strategy, aimed at creating value over six to seven years rather than pursuing turnover alone. Animal health and personal care were selected because they were close to Hikal’s capabilities and customers, while providing diversification without requiring an entirely new manufacturing platform.“We realised that, using the same principles and some of the same assets, we could enter a different line of business without much investment. From a diversification perspective, that was very good for the business,” said Mr. Swadi.Hikal could apply its pharmaceutical processes to animal-health ingredients. In personal care, it could approach different divisions of multinational companies for which it was already an approved supplier.The approach is designed to reduce exposure to market cycles. Crop protection faced prolonged destocking and pricing pressure after COVID-19, while pharmaceutical operations were affected by regulatory remediation. So Hikal decided to incubate the new businesses during the downturn, the top executives said. “Today, 60% of the revenue comes from pharma and around 40 % from crop protection. Over the next three to four years this will change significantly” Mr. Hiremath said.The company aims to increase revenue from Animal Health to more than ₹400 crore by FY30 where margins would be in double digits once operating leverage is achieved. Personal care division began commercial production recently at Panoli and is expected to cross ₹200 crore in revenue by FY30.For FY26, Hikal reported revenue of ₹1,713 crore and EBITDA of ₹232.8 crore, translating into a 13.6% margin. A revenue growth of 14 - 16% is expected in FY27.“We do not need to raise significant debt unless we undertake a major acquisition, which is currently not in the cards. Under the current plan, we have healthy cash flows and strong financials,” Mr. Hiremath said.Rather than making acquisitions merely to add turnover, Hikal will prioritise technology partnerships and selective investments that strengthen existing chemistry platforms and produce returns sooner, he stated.Meanwhile, on a fresh development, proxy advisory firm Institutional Investor Advisory Services (IiAS) has recommended that Hikal Ltd. shareholders vote in favour of appointing Sameer Hiremath as Chairperson and Managing Director for five years from October 1, 2026, along with the remuneration proposed for him, ahead of the company’s Annual General Meeting on September 23.Backing the appointment, IiAS pointed to Mr Hiremath’s association with Hikal’s board since 1999. IiAS also noted that with Jai Hiremath stepping down as Executive Chairperson from October 1, Sameer Hiremath will become the sole representative of the Hiremath promoter faction in an executive capacity, “ensuring leadership continuity.” Published - September 22, 2026 03:00 am IST