Hikal Flags Revenue Recognition Irregularities In Three Quarters, Reverses Rs 80.7 Crore

Hikal Ltd. has revealed discrepancies in its revenue reporting spanning Q4FY25, Q1FY26 and Q2FY26, stating that irregularities were identified during an internal fact-finding review. The company suspects misconduct by employees in roles connected to sales and operational support.

Company Reverses Rs 80.7 Crore Revenue For Q2FY26

The pharmaceutical and crop protection company confirmed the reversal of Rs 80.7 crore in revenue for Q2FY26. In an exchange filing, Hikal Ltd. said the estimated impact is largely related to “revenue recognition and the timing thereof, including potential reversals/adjustments to revenue recorded in the relevant periods and consequential impacts on the quarterly financial results and related financial statement line items.”

The company added, “Had the irregularities not occurred, sales for the relevant period(s) would have been lower by approximately 2% in Q4FY25 and Q1FY26. Further, the company has already reversed revenue of Rs 80.7 crore for Q2FY26.”

A breakdown shared in the disclosure shows:

Q4FY25: 2% lower sales

Q1FY26: 2% lower sales

Q2FY26: Rs 80.7 crore reversal

No Misappropriation, Underlying Sales Genuine

Despite the irregularities, the company said that all recognised transactions are legitimate. It noted that all sales are backed by customer purchase orders and that the findings do not indicate diversion of funds.

“Pursuant to the fact-finding review, the company confirms that all the underlying sales are genuine and are backed by customer purchase orders. The company confirms that there is no siphoning/embezzlement or misappropriation of funds,” it said.

Suspected Employee Misconduct

Hikal attributed the issue to employees within internal operational functions. Personnel linked to sales and marketing, logistics and related departments are believed to be involved, said the company in the exchange filing.

“We wish to inform you that the company has identified certain irregularities/alterations during the course of a fact-finding review relating primarily to revenue recognition and supporting documentation for certain periods. The matter involves misconduct by certain employees and is being treated as a misconduct basis a fact-finding review,” stated the company.

Measures And Next Steps

Hikal said it was assessing its statutory obligations and preparing to notify authorities where required. The disclosure noted that the company is “evaluating applicable reporting requirements and will take appropriate steps to report the matter to relevant authorities, as may be required under applicable law/regulations.”