Advanced Enzyme Technologies Limited — Q1 FY26 earnings call

Call held 6 Aug 2025

Management summary

Advanced Enzyme Technologies reported a strong Q1 FY26 with record revenue and significant PAT growth, primarily driven by Human and Animal Healthcare segments. Despite a temporary dip in Bioprocessing and pressure on gross margins due to product mix and US tariffs, the company is optimistic about long-term double-digit growth, supported by ongoing R&D and strategic initiatives including a new subsidiary for nutrition products.

Highlights

  • Highest ever quarterly revenue of INR1,859 million, reflecting 20% year-on-year growth and an 11% increase quarter-on-quarter.

  • EBITDA came at INR564 million, a 10% increase year-on-year and 24% rise quarter-on-quarter, with an EBITDA margin of 30%.

  • Profit after tax reached INR404 million, registered a 16% growth year-on-year and impressive 51% increase quarter-on-quarter, with a PAT margin of 22%.

  • Human Healthcare revenue grew 21% year-on-year to INR1,221 million, driven by good demand in the pharma/API sector.

  • Animal Healthcare revenue rose 51% year-on-year to INR260 million, due to increased traction in domestic and Asian markets.

Concerns

  • Bioprocessing segment recorded a 6% decline year-on-year and a 15% sequential drop in revenue to INR236 million.

  • Gross margins are lower than historical 75%+ range, now around 72-73%, attributed to product mix change and US tariffs.

  • The 10% US tariff, in place since April 2025, is currently being absorbed by the company, impacting profitability.

Key financials

  1. Revenue 1,859 Mn +20%YoY
  2. EBITDA 564 Mn +10%YoY
  3. EBITDA Margin 30%
  4. Profit Before Tax 549 Mn +13%YoY
  5. PAT 404 Mn +16%YoY
  6. PAT Margin 22%
  7. R&D Spending 86 Mn

What they filed

Q1 FY27: revenue down 7.2%, net profit down 70.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue77 101 87 125 116 +51%96 −5%116 +33%116 −7%
EBITDA14 22 14 31 30 +114%23 +5%27 +93%30 −3%
Net profit9 15 11 74 22 +144%13 −13%22 +100%22 −70%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Human Healthcare
    1,221 Mn Revenue21% YoY Growth19% QoQ Growth65% Contribution to Revenue593 Mn Pharma Business Revenue10 Mn Probiotic Revenue56 Mn Biocatalysis Revenue552 Mn International Human Nutrition Revenue
  • Animal Healthcare
    260 Mn Revenue51% YoY Growth24% QoQ Growth14% Contribution to Revenue
  • Bioprocessing
    236 Mn Revenue-6% YoY Decline-15% QoQ Decline13% Contribution to Revenue
  • Specialized Manufacturing
    142 Mn Revenue29% YoY Growth-8% QoQ Decline7% Contribution to Revenue
  • JC Biotech (Subsidiary)
    211 Mn Revenue33 Mn EBITDA14 Mn PAT
  • Evoxx (Subsidiary)
    70 Mn Revenue14 Mn EBITDA7 Mn PAT
  • SciTech Sales (Subsidiary)
    145 Mn Revenue4 Mn EBITDA-8 Mn PAT
  • Anti-inflammatory enzyme
    417 Mn Sales22% Share of Top Line
  • B2C Segment
    1.28 Mn Revenue

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New R&D setup at Nashik ₹480 Mn
    • Solar energy project for electricity requirements
    R&D spending, Shreyans, here does not include whatever amount we are spending on new R&D setup. This is we are putting at Nashik. So far, those expenses, we have not included in this R&D expenditure because that's under work in progress. We have already spent about INR48 crores, but that we have not included in our R&D spending so far. And about the product lines, I think Mukund will give some flavor on that. what exactly we are doing on R&D. - Beni Rauka
  • M&A Advanced Nutrazyme Private Limited Acquisition · Established

    Focus on sales and distribution of company's nutrition and wellness product range.

    Additionally, we have established a new subsidiary, Advanced Nutrazyme Private Limited, which will focus on the sales and distribution of company's nutrition and wellness product range.

Guidance & targets

Margin

  • Gross Margin Margin · going forward · Medium confidence 73% to 75%
    going forward, the gross margin could be anywhere between 73% to 75%. That's what is the range, I think we can look at it.

    — Beni Rauka

R&D

  • R&D Spend as % of Revenue R&D · Medium confidence 5% to 6%
    We are somewhere between 5% to 6%, right? ... Yes. And what we were mentioning is it might go up by another 1% or somewhere as we move on when the new center will start.

    — Vasant Rathi, Mukund Kabra

Capacity

  • Capacity Utilization Capacity · Medium confidence 60% to 65%
    But I would say that it's not a 50%, it's 60%, 65%, somewhere around that rate.

    — Mukund Kabra

  • Next Capacity Expansion Capacity · Medium confidence when utilization reaches 80%
    And whenever it will come to 80%, we will go for the next capacity extension round.

    — Mukund Kabra

Capex

  • New R&D Facility Commissioning Capex · last quarter of this year · High confidence commissioned
    We expect in the last quarter of this year.

    — Mukund Kabra

Market context

  • Overall Growth Growth · longer run · Medium confidence double digit
    I would always go with a double digit over a longer run.

    — Mukund Kabra

What to watch in Q2 FY26

New R&D Facility Commissioning

last quarter of this year
Current Under construction, INR48 crores spent
Target Commissioned

Why it matters

Signals future product development and innovation pipeline, crucial for long-term growth.

We expect in the last quarter of this year.

Risks & concerns

  • US Tariffs and their impact on profitability

    medium

    10% tariff on US exports (INR50 crores total) leads to INR12-12.5 crores direct impact, currently being absorbed.

    Management acknowledged

  • Gross Margin Pressure

    medium

    Gross margins are lower (72-73%) due to product mix changes and tariff absorption, compared to historical 75%+.

    Management acknowledged

  • Competition and Pricing Pressure

    medium

    Analysts inquire about competitors undercutting prices; management states industries adjust, and there might be pricing pressure, but it's not uniform.

    Analyst acknowledged

  • Uncertainty in Biocatalysts Commercialization

    low

    Global pharma market and US tariffs create 'murky situations', making it difficult to predict the full commercialization of biocatalysts.

    Management acknowledged

Q&A highlights

3 direct, 1 evasive
Gross Margin Decline and Outlook Partial
I think the gross margin is likely -- the gross contribution that is what we say generally remains to be about 72% to 73% in that range.

Analyst challenges management on lower gross margins; management attributes it to product mix and tariffs, providing a revised range.

Asked by Shubham Sehgal

Biocatalysts Commercialization and Industry Shift Evasive
I think it takes another 1 or 2 quarters to really come out with the answers on this front. As of now, we are well placed. That's all what I can say.

Analyst probes for progress on biocatalysts and the industry shift; management confirms some sales but defers detailed outlook due to market uncertainties.

Asked by Shubham Sehgal

Impact of US Tariffs on Exports Direct
But if you really talk about direct, probably our export is in the tune to the U.S. is about INR50 crores or so. So we might have like about INR12 crores, INR12.5 crores impact.

Management quantifies the direct impact of US tariffs on its exports, providing a specific figure.

Asked by Shubham Sehgal

Passing on US Tariffs to Customers Direct
Not so far.

Management explicitly states they are currently absorbing the 10% US tariff, indicating a direct impact on profitability.

Asked by Umang Shah

Intermediate Business Development Partial
Ketan ji, you already mentioned that we did some of the sale of that as well, but I think it's too premature because there are a lot of factors which are playing as of now. In the next 1 or 2 quarters, once the picture gets clear, we would like to put more light on that.

Analyst asks for an update on a previously mentioned 'intermediate business'; management confirms organic development and some sales but defers detailed disclosure.

Asked by Ketan R. Chheda

Long-term Growth Trajectory Direct
I would always go with a double digit over a longer run.

Analyst seeks clarity on long-term growth expectations; management provides a specific directional target.

Asked by Neha Kharodia

Probiotic Segment Growth Potential Partial
And it's very difficult to predict at this point of time, like how much is going to be the growth in probiotics alone because that's more like a commodity sale.

Analyst questions the growth potential of the probiotic segment; management explains the complexity of tracking it due to product blends and its commodity nature.

Asked by Neha Kharodia

2 min read 6 chapters

Detailed narrative

Record Revenue and Strong Profitability in Q1 FY26

Advanced Enzyme Technologies achieved its highest-ever quarterly revenue of INR1,859 million in Q1 FY26, marking a 20% year-on-year and 11% quarter-on-quarter growth. This robust top-line performance translated into strong profitability, with EBITDA reaching INR564 million (up 10% YoY, 24% QoQ) and PAT soaring to INR404 million (up 16% YoY, 51% QoQ). The PAT margin stood at a healthy 22% for the quarter, indicating efficient operations despite some margin pressures.

Human and Animal Healthcare Drive Growth

The Human Healthcare segment, the largest contributor, saw its revenue increase by 21% year-on-year to INR1,221 million, now accounting for 65% of total revenue. This growth was primarily driven by strong demand in the pharma/API sector. The Animal Healthcare segment also demonstrated exceptional growth, with revenue rising 51% year-on-year to INR260 million, fueled by increased traction in domestic and Asian markets, and now represents 14% of the total revenue.

Bioprocessing Segment Faces Temporary Dip, Specialized Manufacturing Shows Resilience

The Bioprocessing segment experienced a temporary setback, with revenue declining 6% year-on-year and 15% sequentially to INR236 million. This was largely due to a 24% quarter-on-quarter degrowth in the food business. In contrast, the Specialized Manufacturing segment reported INR142 million in revenue, up 29% year-on-year, contributing 7% to the overall revenue, showcasing resilience despite a slight 8% sequential dip.

Strategic Investments in R&D and Sustainability

The company is actively pursuing strategic initiatives, including the establishment of Advanced Nutrazyme Private Limited, a new subsidiary focused on nutrition and wellness products. In its commitment to clean energy, JC Biotech is collaborating with Raywatt Solar Power Systems to meet electricity needs sustainably. R&D spending for the quarter was INR86 million, representing 5% of consolidated revenue, with an additional INR48 crores already invested in a new R&D facility at Nashik, slated for commissioning in the last quarter of FY26.

Gross Margin Pressure and US Tariff Absorption

Gross margins for the quarter were noted to be around 72-73%, lower than the historical range of 75%+, attributed to changes in product mix and the impact of US tariffs. Management confirmed that the 10% US tariff, in effect since April 2025, is currently being absorbed by the company, with an estimated direct impact of INR12-12.5 crores on its INR50 crores US exports. This absorption is a key factor influencing current profitability.

Outlook on Biocatalysts and Long-term Growth

While some commercial sales have commenced in the biocatalysts segment, management indicated that it is still too early to provide a detailed outlook due to global market uncertainties and tariff situations, expecting more clarity in the next 1-2 quarters. Despite these challenges, the company remains optimistic about achieving 'double-digit growth' over the longer run, with current capacity utilization at 60-65% and plans for further expansion once it reaches 80%.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls