# HESTER BIOSCIENCES LTD
CMP is 1240 , MCAP 1050 Cr , Promoters holding around 54% , Good growth till Fy 19 , FY 19-20 was weak ,Dividend paying company ,BV 236 , Small equity
CMP is 1240 , MCAP 1050 Cr , Promoters holding around 54% , Good growth till Fy 19 , FY 19-20 was weak ,Dividend paying company ,BV 236 , Small equity
Started business in 1987 as a trading company, now second largest poultry vaccine manufacturer in India ( largest is venkys ) with two manufacturing unit in Ahmedabad and Nepal . Diagnostic lab - Anand , Hyderabad
Company operates through 4 verticals
1-Poultry vaccines
2-Animal vaccines
3-Poultry health products
4- Animal health products
Company is having around 50 vaccines and 35 health products
1-Poultry vaccines
2-Animal vaccines
3-Poultry health products
4- Animal health products
Company is having around 50 vaccines and 35 health products
Revenue distribution- 76% revenue from poultry 21% from animals
and 3% others .
Poultry division- 14 live vaccine, 32 Inactivated vaccine
Anti infective medicines
Food supplements
Disinfectant for farms and equipment’s sanitizer
and 3% others .
Poultry division- 14 live vaccine, 32 Inactivated vaccine
Anti infective medicines
Food supplements
Disinfectant for farms and equipment’s sanitizer
Animal health division- 3 active vaccine
Drugs- anti infective, pain killer,
Feed supplements
Disinfectants
Drugs- anti infective, pain killer,
Feed supplements
Disinfectants
Subsidiary
1-Hester Bio Nepal -65% stake of Hester
2-Texas life Sciences- 54.80% stake ( manufacturing and supplying formulation, tablet , capsules , powder for human and veterinary market )
1-Hester Bio Nepal -65% stake of Hester
2-Texas life Sciences- 54.80% stake ( manufacturing and supplying formulation, tablet , capsules , powder for human and veterinary market )
3- Hester Africa -100.% subsidiary ( Tanzania) for veterinary vaccines and animal health products
which will start commercial production by end of 2020
4- Hester Kenya -100% subsidiary-trading business
5-Hester bioscience Tanzania-Trading business
which will start commercial production by end of 2020
4- Hester Kenya -100% subsidiary-trading business
5-Hester bioscience Tanzania-Trading business
Company started product diversity by focusing on large animal vaccines and because of which poultry health care division revenue contribution is coming down from 84% to 74% as a part of their strategy.
Last year FY 20 was below expectation because of recession in poultry industries because of high maize price(in poultry industry 75% budget goes to feed cost and 50% feed cost is from maize ) and q4 was bad due to covid and company hired more people for new territory, investment.
R&D Pipeline-
1Poultry-development of diagnostic kit
2-Thermotolerant ppr vaccines (thermotolerance–the ability of a vaccine to retain its potency following storage at temperatures in excess of the cold-chain )
3-PPR Nasal spray vaccine.
4-Covid vaccine .
1Poultry-development of diagnostic kit
2-Thermotolerant ppr vaccines (thermotolerance–the ability of a vaccine to retain its potency following storage at temperatures in excess of the cold-chain )
3-PPR Nasal spray vaccine.
4-Covid vaccine .
Why poultry health is important
Poultry products contain variable but moderate energy content, highly digestible proteins (with low levels of collagen) of good nutritional quality, unsaturated lipids ,B-group vitamins
Poultry products contain variable but moderate energy content, highly digestible proteins (with low levels of collagen) of good nutritional quality, unsaturated lipids ,B-group vitamins
mainly thiamin, vitamin B6, and pantothenic acid), and minerals (like iron, zinc, and copper) make poultry meat a valuable food. Poultry vaccines are widely applied to prevent and control contagious poultry diseases and increase production.
Growth drivers
Rising global demand for animal protein
• Increasing trend of Zoonotic diseases to drive demand for vaccines
• Natural resources constraints driving need for more efficient food production
Rising global demand for animal protein
• Increasing trend of Zoonotic diseases to drive demand for vaccines
• Natural resources constraints driving need for more efficient food production
• Livestock rearing is a prominent source of income in some economies
• Increased pet ownership and spending
• Higher focus on food safety and food security
• Increased pet ownership and spending
• Higher focus on food safety and food security
Why I am bullish on Hester
1-Government announced National Animal Disease Control Programme to cover around 53 crore animals, of which 1.5 crore cows and buffaloes have already been vaccinated.(Aim is to increase milk production)
1-Government announced National Animal Disease Control Programme to cover around 53 crore animals, of which 1.5 crore cows and buffaloes have already been vaccinated.(Aim is to increase milk production)
According to estimates, India has 14.6crore female cows (total 19.3 crore male and female), 10 crore female buffaloes (total 11 crore male and female), 7.4 crore sheep, 14.9 crore goat and 90 lakh swine and they have to be vaccinated.
The main animal vaccines are Peste des petits ruminants (PPR) vaccines to protect against viral goat plague, Brucella vaccine to protect against Brucellosis and FMD vaccine to protect against Foot and mouth disease (FMD).
Hester manufacture Brucella and PPR vaccine, Brucella vaccines tender size is around 100 Cr this yr and apart from Hester Indian Immunologicals are the only suppliers of Brucella vaccines, PPR vaccine tender is small around 12 Cr
2-Tanzania unit - At full capacity utilisation total turnover of around 200 Cr is expected, Hester received commitment worth $14 million from Bill & Melinda Gates Foundation, US and till now In Africa 80% Animal vaccines are imported ( will start by end of 2020 )
3-Poultry vaccines company is having 35% market share and in animal vaccine it’s a small player and company is focusing in this area now .
4-Company signed agreement with Egyptian company for technology transfer where Hester will get technology fee.
4-Company signed agreement with Egyptian company for technology transfer where Hester will get technology fee.
So Brucella tender , Tanzania unit (where at full capacity utilisation revenue of 200cr is estimated) and increase geographical presence more focus on animal health and poultry segment will be growth driver ( Capex is almost over )
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