The outlook for #Hester Biosciences’ does not seem very strong for the next year. They are facing major issues in multiple segments. Some takeaways from their Q2 FY23 concalls below⚠️⚠️
Their poultry business, which is their largest vertical, is not doing well as cost of raw materials has increased and demand for the end product has been decreasing. Poultry farmers are trying to reduce input costs which means lower demand for Hester’s products.
The company’s product mix is shifting from mainly vaccines toward animal health products which are generally lower in margin than vaccines. This issue is also made worse by the increase in raw material prices for their health products which is further reducing margins.
The capex done in Africa is facing difficulties in scaling up as the demand for their products have decreased in the neighboring countries as their currencies have depreciated sharply against the dollar
The capex done for manufacturing the antigen for Covaxin can also not be used for that purpose since the demand for Covid vaccines has reduced dramatically. They are currently looking for other ways to utilize the facility like producing the Monkeypox Virus Vaccine.
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