Hester Biosciences Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹2,236.00+₹39.60 (+1.80%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Hester Biosciences Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Hester Biosciences Limited manufactures and trades in veterinary vaccines and health products in India and internationally. It operates through two segments, Poultry Healthcare and Animal Healthcare.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees483

Annual revenue₹333 Cr

How does it make money?

Turns over ₹333 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹32 left at the operating level before interest, tax and depreciation. Each of its 483 employees supports ₹68.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹68.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +25% while net margin moved +67% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+25%

Margin effect+67%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.43 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

75/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

13.9x

3Y Median

56.5x

40 monthly readings · mean 64.2x · range 33.3x–116.9x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 75% below its 3y median of 56.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 58% below the peer median of 33.3x.

vs. its own history

Cheap

56.5x median over 40 months · -75%

vs. sector peers

Cheap

33.3x median of 4 peers · -58%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

19.8x

PEG

0.50

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 24.9% to 31.9% over 3 years.
Debt is being paid down
Total debt is down 29% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 9.5% to 15.4%.
Return on capital is rising
ROCE has improved from 8.7% to 15.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 24.9% to 31.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 29% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 75% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 58% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 7.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 30%✓ 31.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 6% a year✓ 7.7% CAGR
Latest reported year was -8.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹46 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 2 neutral · 2 weak

Market Cap

₹1,902 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.9x

Cheap

Cheap against the generic band

P/B Ratio

5.28x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹160.95

Profitable

Profitable on a per-share basis

ROE

15.4%

Strong

Strong capital efficiency

ROCE

15.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.53x

Low

Conservative leverage

Revenue Growth (YoY)

-8.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

459.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.49%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹46 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

20.4%

Good

Healthy core-business profitability

Net Margin

41.6%

Good

Strong bottom-line conversion

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

69%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2159.6 / 2272.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

55.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹266 Cr	₹305 Cr	₹311 Cr	₹333 Cr	+7.7%
EBITDA	₹66 Cr	₹58 Cr	₹65 Cr	₹106 Cr	+16.9%
EBITDA Margin	24.9%	18.9%	21.0%	31.9%	—
PAT (Net Profit)	₹27 Cr	₹19 Cr	₹27 Cr	₹56 Cr	+27.8%
EPS	₹31.3	₹22.2	₹32.31	₹65.4	+27.8%
ROE	9.5%	6.5%	8.7%	15.4%	—
ROCE	8.7%	7.4%	9.1%	15.8%	—
Total Debt	₹274 Cr	₹244 Cr	₹213 Cr	₹195 Cr	-10.8%
Free Cash Flow	-₹54 Cr	₹24 Cr	₹44 Cr	₹46 Cr	—

🟢 Revenue has grown at 7.7% a year over 3 years.

🟢 EBITDA has grown at 16.9% a year over 3 years.

🟢 EBITDA Margin has risen from 24.9% to 31.9% over 3 years (+6.9 pts).

🟢 PAT (Net Profit) has grown at 27.8% a year over 3 years.

🟢 EPS has grown at 27.8% a year over 3 years.

🟢 ROE has risen from 9.5% to 15.4% over 3 years (+5.9 pts).

🟢 ROCE has risen from 8.7% to 15.8% over 3 years (+7.2 pts).

🟢 Total Debt has shrunk at 10.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹54 Cr to ₹46 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹678 Cr

Total Liabilities

₹310 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹64 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

68.8%

Corporate Actions

Dividend Rate

₹11

Ex-Dividend Date

14 Jul 2026

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

3 positive1 mixed2 general

HESTER BIOSCIENCES Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 17 Oct

Hester Biosciences Limited (NSE:HESTERBIO) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Simply Wall Street, 10 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Hester Biosciences Sets ₹11-per-share Dividend

HDFC Sky, 13 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Hester Biosciences Q4 Results: Stock jumps 14% after profit growth, strong operating performance

CNBC TV18, 15 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Hester Biosciences: Best Stock in Its Sector? Key Metrics

Univest, 28 Sept

Hester Biosciences Poultry revenue surges 48% in Q1FY27; management cites deeper market penetration

scanx.trade, 30 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Revenue growth is negative (-8.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingGrowth · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 5 tripwires holding · see Key things to watch ↑