Hikal Limited (Hikal), a pharmaceuticals and specialty chemicals company, has informed the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) of India about irregularities discovered during an internal fact-finding review concerning revenue recognition and supporting documentation. The company filed the regulatory disclosure on 26 December 2025, pursuant to Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015.
Nature of Irregularities and Suspected Misconduct
The matter involves suspected misconduct by certain employees in operational functions including sales and marketing, logistics, and allied support functions. The irregularities relate to alterations of documents concerning revenue recognition during specific periods under review.
Based on the investigation conducted to date, the suspected irregularities appear to involve transactions spanning the Q4FY24-25, the Q1FY25-26, and Q2FY25-26. Hikal is treating this as an internal misconduct case and continues to examine the situation to ensure complete understanding of the scope and nature of the irregularities.
Financial Impact and Revenue Adjustments
The impact on Hikal's financial statements relates primarily to the timing of revenue recognition rather than the validity of underlying transactions, affecting quarterly financial results and related financial statement line items with consequential impacts across various reporting periods.
According to the company's quantified assessment, reported sales would have been approximately 2% lower in both the Q4FY24-25 and the Q1FY25-26 had these irregularities not occurred. As part of corrective measures, Hikal has already reversed revenue amounting to ₹80.7 crore for the Q2FY25-26.
Confirmation of Genuine Transactions
Despite these irregularities, Hikal has provided important assurances to stakeholders. The company confirmed that all underlying sales transactions are legitimate and supported by valid customer purchase orders. Critically, Hikal explicitly stated that the review found no evidence of fund diversion, clarifying that there has been no siphoning, embezzlement, or misappropriation of company funds.
Regulatory Compliance and Next Steps
Hikal stated it is currently evaluating applicable reporting requirements under relevant laws and regulations. The company indicated it will take appropriate steps to notify relevant authorities as may be required, subject to legal advice and statutory obligations.
The disclosure was made under provisions specifically relating to irregularities or defaults by employees that have or may have an impact on the listed entity, reflecting the company's commitment to transparency as it works to ensure full compliance with applicable laws and regulations, while addressing the irregularities identified in its revenue recognition practices.
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