### **Company Overview** Hester Biosciences Limited, established in 1987 and headquartered in Ahmedabad, Gujarat, is a leading Indian animal healthcare company specializing in **vaccines and health products for poultry, livestock, and companion animals**. With over four decades of experience, the company has evolved from a poultry-focused vaccine manufacturer to a diversified, globally recognized player in animal health. It operates through three key divisions: - **Poultry Healthcare** - **Animal Healthcare** (ruminants and small animals) - **Petcare** Hester is recognized as the **second-largest poultry vaccine manufacturer in India**, with a 35% market share, and the **world’s largest producer of PPR (Peste des Petits Ruminants) vaccines**, holding approximately **75% global market share**. It also dominates India’s Goat Pox vaccine segment with over **70% market share**, which is widely used for controlling **Lumpy Skin Disease (LSD)** in cattle. --- ### **Global Presence & Subsidiaries** Hester Biosciences maintains a strong international footprint across more than 35 countries in Asia, Africa, the Middle East, and parts of South America. Key subsidiaries and operations include: - **Hester Biosciences Africa Limited (HBAL)** – Tanzania (100% owned), operating a **GMP-certified manufacturing facility with 1.5 billion doses/year capacity**. - **Hester Biosciences Nepal Private Limited (HBNPL)** – 65% stake, contributing significantly to PPR and poultry vaccine production and exports. - **Texas Lifesciences Private Limited** – Supplies health products (human and veterinary) to Hester India; Hester holds a 54.8% stake. - **Joint Venture: Thrishool Exim Limited (TEL)** – 50% stake; critical for local distribution and market access in Tanzania. The company’s strategic focus is on **Africa**, driven by high livestock dependency, rising meat demand, and a significant supply-demand gap in animal vaccines. **Tanzania, Kenya, and Ethiopia** are key growth markets, supported by partnerships with the **Bill & Melinda Gates Foundation and GALVmed**. --- ### **Strategic Growth Initiatives (Nov 2025 Update)** #### **1. Business Model Diversification** - The company is **deliberately reducing its reliance on tender-based revenues** to build a **more balanced, resilient, and diversified business model** across products, geographies, and customer segments. - Emphasis is on **expanding commercial, private, and export markets** through operational excellence and standardized processes. #### **2. Product Portfolio & Innovation** - **H9N2 Avian Influenza Vaccine**: - Received **market authorization** in India. - Positioned as a **key growth driver** for poultry, expected to unlock **export opportunities and international partnerships**. - Commercial rollout of the **Avian Influenza (H9N2) vaccine in India and Africa** is imminent, pending manufacturing license (expected by December 2025). - **Lumpy Skin Disease (LSD) Vaccine**: - Indian version under regulatory review; currently supplying **Goat Pox Vaccine**, which offers cross-protection. - **Petcare Expansion**: - Aggressively growing in **urban Indian markets** via **veterinarian engagement and distributor partnerships**. - Plans to **launch pet vaccines in India and Africa** using **existing facilities** — **without major capex**. - Exploring **licensing deals** as an interim step before establishing a dedicated pet vaccine plant. - **New Product Launches**: - Planning to launch **9 new animal health products**, including: - 3 ruminant nutrition formulations - 6 pet parasite-control and dermatology treatments - 3 poultry nutritional products - Launch of **ProtinC Keto+** for ketosis management and reformulated therapeutics (e.g., *iSumovet MPL Injection*) to comply with regulatory changes. #### **3. R&D & Manufacturing Capabilities** - **BSL-3 Facility Repurposing**: - Formerly built for **Covaxin drug substance**, now being repurposed for **high-biosecurity veterinary vaccines**. - Expected to enable production of **Avian Influenza, LSD, and other emerging zoonotic disease vaccines**. - Fully funded via a **BIRAC grant**; final approvals pending. - **Fill-Finish Facility**: - Expected to be operational by **Q2 FY26**, enhancing high-biosecurity vaccine production. - **Manufacturing Network**: - **India (Kadi, Gujarat)**: Asia’s largest single-location animal biological facility — **6.25 billion doses/year**. - **Nepal (Kathmandu)**: 1.24 billion doses/year. - **Tanzania**: 1.5 billion doses/year. - Total capacity: **~9 billion doses/year**, enabling economies of scale and global export competitiveness. #### **4. Operational & Market Expansion** - **Africa & Nepal**: - Hester Africa reduced net losses from ₹183 million to ₹103 million (July 2024–July 2025) due to **strong tender wins** and **registration of combination PPR–Sheep & Goat Pox vaccine**. - Management confident of achieving **breakeven within two years**. - Hester Nepal achieved ₹135 million in FY24 and is scaling up **poultry vaccine manufacturing** for domestic and export markets. - **Export Strategy**: - Exports primarily from Poultry Healthcare division. - Targeting exports of **H9N2, LSD**, and **PPR vaccines** to **Africa, Central Asia, and Middle East**. - Leveraging **FAO and WOAH (OIE) tenders**, especially through Nepal and Africa. --- ### **Financial & Operational Highlights** #### **Poultry Healthcare Division** - **Q2 FY26 (Nov 2025)**: 18% growth - **H1 FY26**: 10% growth - Driven by strong demand for **Newcastle Disease, Marek’s Disease, and IBD vaccines**. - Introduced **feed supplements and disinfectants** to enhance farm biosecurity and productivity. - Moving toward **holistic poultry health solutions** combining vaccines, immunity boosters, and biosecurity. #### **Animal Healthcare Division** - **Q2 FY26**: 50% decline (YoY) - **H1 FY26**: 41% decline - Due to **delays in PPR and LSD immunization programs** — **temporary and timing-related**, not reflecting weak demand. - Core therapeutic and nutritional segments remained **stable**, supporting farmer engagement. - **Petcare growth** is being built as a counterbalance. #### **Petcare Division** - **Q3 FY25 (Jan 2025)**: **105% YoY growth** - **FY24 (Jul 2024–Jul 2025)**: **49% revenue growth** - Initial product focus on **anti-infectives, joint care, parasiticides, and grooming aids**. - Branded products include **HESTACEF CV, SAFELINE SPOT ON, PETSGLOW**, and **CEFSHOT TAZO**. - Focus on **prescription-driven, veterinarian-led model** for long-term credibility. - Planning to launch **prescription pet food** for obesity, renal, and cardiac conditions. #### **Revenue & Profitability** - Achieved **₹3 billion in consolidated revenue for FY 2023–24**, a milestone. - Growing contribution from **health products**, which, while lower margin, improve **customer stickiness, volume, and market reach**. - Strategy is to **increase top-line via volume and diversification**, with **margin recovery expected from scale, capex completion, and export mix improvement**. --- ### **Strategic Priorities for FY26 and Beyond** 1. **Geographic Expansion**: Deepening footprint in **India, Nepal, and Africa**; exploring licensing models for **Middle East and South Asia**. 2. **Product Diversification**: Expanding **vaccines, health products, diagnostics, and pet biologicals**. 3. **Innovation & R&D**: - Developing **indigenous vaccines** for **Classical Swine Fever, Sheep Pox, LSD** (in collaboration with **ICAR-IVRI**). - Focus on **herbal and antibiotic-free solutions** to align with global trends. 4. **Operational Excellence**: - Fully capitalizing the **₹182 crore CWIP** at the Indian plant by **March 2026**. - Strengthening **cold chain infrastructure, diagnostics, and technical services**. - Operating **seven owned cold storage warehouses** and last-mile distribution across India. --- ### **Key Competitive Advantages** - **Thermostable vaccines** (e.g., PPR, ND) — can operate without cold chain, ideal for rural and remote areas. - **GMP-certified, high-capacity facilities** across India, Nepal, and Tanzania. - **Strong R&D capabilities** (DSIR-recognized lab), supported by **global collaborations**. - **Strategic partnerships** with **BIRAC, Gates Foundation, IVRI, and Novapharma**. - **Dual capability**: Government tender expertise + private market reach. ---