Concall AI

Advanced Enzyme Technologies Limited — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

Advanced Enzyme Technologies reported a 6% YoY revenue growth in Q4 FY25 to INR 1,672 million, with full-year FY25 revenue growing 2% to INR 6,369 million. However, Q4 EBITDA margin compressed to 27% due to product mix and inventory valuation adjustments. The company highlighted increased R&D spend, strong growth in Specialized Manufacturing, and progress in sustainability initiatives. Management anticipates mid-double-digit revenue growth for FY26, driven by biocatalysts and animal feed, while addressing challenges in Human Nutrition and competitive pressures on key products.

Highlights

Q4 FY25 revenue grew 6% YoY to INR 1,672 million.
FY25 total revenue grew 2% to INR 6,369 million.
FY25 R&D spend increased to 5.3% of revenue (consolidated) from 4.53% in FY24, reflecting continued focus on innovation.
Specialized Manufacturing segment showed strong growth, contributing 8% of total revenue in FY25 with 30% YoY growth.
Successfully installed an additional 350-kilowatt solar power plant, increasing total clean energy capacity to 510 kilowatts.

Concerns

Q4 FY25 EBITDA margin compressed to 27% from 31% in Q3 FY25 and Q4 FY24, attributed to product mix and inventory valuation true-up.
FY25 EBITDA declined by 4.9% to INR 1,944 million from INR 2,045 million in FY24.
Human Nutrition segment revenue declined by approximately 3% (INR 132 million) in FY25, mainly due to lower domestic market revenue.
Evoxx subsidiary reported an increased loss of INR 39 million in FY25 compared to INR 21 million in FY24, with negative EBITDA of INR 12 million.
Serratiopeptidase revenue declined to INR 1,193 million in FY25 from INR 1,310 million in FY24, with management expecting a further 2-5% fall in revenue for this area.

Key financials

2 periods

Headline

Revenue
1,672 Mn
YoY +6% QoQ -1%
EBITDA
456 Mn
YoY -17.7% QoQ -21.5%
EBITDA Margin
27%
PAT
267 Mn
YoY -10.7% QoQ -31.4%

FY25

Total Revenue
6,369 Mn
YoY +2%
EBITDA
1,944 Mn
YoY -4.9%
EBITDA Margin
31%
PAT
1,340 Mn
YoY -2.2%
R&D Spend
328 Mn
YoY +19.7%
R&D % of Revenue (Consolidated)
5.3%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	77	101	87	125	116 +51%	96 −5%	116 +33%	116 −7%
Expenses	64	79	73	94	86	72	90	85
EBITDA	14	22	14	31	30 +114%	23 +5%	27 +93%	30 −3%
Margin	17%	22%	16%	24%	26%	25%	23%	26%
Other income	2	1	5	54	3	-3	5	2
Interest	0	0	0	0	0	0	0	0
Depreciation	3	3	3	3	3	3	3	3
Profit before tax	12	21	16	81	30 +150%	18 −14%	29 +81%	30 −63%
Tax rate	26%	26%	29%	9%	25%	26%	23%	25%
Net profit	9	15	11	74	22 +144%	13 −13%	22 +100%	22 −70%
EPS	0.82	1.36	0.99	6.61	1.99	1.18	1.99	2.00

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 Nutrition (Q4 FY25)
62% Revenue Contribution1% YoY Growth— Sequential Growth
Human Nutrition (FY25)
64% Revenue Contribution132 Mn Revenue Decline3% Revenue Decline %
Animal Nutrition (Q4 FY25)
12% Revenue Contribution13% YoY Growth6% Sequential Growth
Animal Health Nutrition (FY25)
12% Revenue Contribution12% YoY Growth
Bio-Processing (Q4 FY25)
17% Revenue Contribution8% YoY Growth-13% Sequential Growth
Food Business (FY25)
809 Mn Revenue4% YoY Growth13% Revenue Contribution
Non-Food Business (FY25)
208 Mn Revenue12% YoY Growth3% Revenue Contribution
Specialized Manufacturing (Q4 FY25)
9% Revenue Contribution39% YoY Growth— Sequential Growth
Specialized Manufacturing (FY25)
8% Revenue Contribution30% YoY Growth
JC Biotech (FY25)
600 Mn Revenue70 Mn EBITDA12 Mn PAT
Evoxx (FY25)
213 Mn Revenue12 Mn Negative EBITDA39 Mn Loss
SciTech (FY25)
542 Mn Revenue76 Mn EBITDA37 Mn PAT
Serratiopeptidase (FY25)
1,193 Mn Revenue29% Revenue Contribution
B2C Segment (FY25)
375 Mn Revenue4.46 Mn Revenue (USD)
Human Nutrition India (FY25)
1,764 Mn Revenue
Human Nutrition International (FY25)
2,289 Mn Revenue

Capital allocation

high confidence

Capex Capex disclosed
- Solar power plant installation (additional 350 kW, total 510 kW)
The company has successfully completed the installation and commissioning of an additional 350-kilowatt solar power plant, raising its total clean energy capacity to 510 kilowatts.

Guidance & targets

Revenue

Total Revenue Growth Revenue · FY26 · Medium confidence mid-double-digit number

But when we do this and when we look forward for this year, we see a good growth at somewhere around like mid-double-digit number. So we see a very positive year coming forward.

— Mukund Kabra
Serratiopeptidase Revenue Revenue · FY26 · High confidence 2% to 5% fall

We may see that there might be another 2%, 3% to 5% fall on the revenue on this particular area.

— Mukund Kabra
Specialized Manufacturing Growth Revenue · FY26 · High confidence more than 20%

Yes. I think if not 30%, at least this business is going to grow more than 20% in the coming year as well.

— Beni Rauka

Margin

Gross Contribution Margin Margin · FY26 · High confidence 76%, 77%

I think that's what, 76%, 77% is the kind of gross contribution, which we shall be in a position to maintain as of now.

— Beni Rauka
EBITDA Margin Margin · FY26 · High confidence same as this year

What I can say is right now, we expect the same margin of this year for the coming year.

— Mukund Kabra

Profitability

Evoxx Turnaround Profitability · FY26 · High confidence turnaround

Definitely. Definitely, this year, we will see turnaround.

— Beni Rauka

R&D

AI Implementation in R&D R&D · FY26 · Medium confidence implement some of them

Yes, we are exploring. This year, that is one of the tasks for us to go forward. We are working on that. Probably this year, we will implement some of them.

— Mukund Kabra

Cost

Raw Material Cost Increase Cost · FY26 · High confidence 1% or 2%

See, on the raw material front or the other front, we will have a 1% or 2% increase going forward as well.

— Mukund Kabra

What to watch in Q1 FY26

FY26 Revenue Growth

next quarter (for confirmation of trend)

Current 2% (FY25)

Target mid-double-digit number

Why it matters

This is management's primary growth target for the upcoming fiscal year, indicating overall business momentum.

But when we do this and when we look forward for this year, we see a good growth at somewhere around like mid-double-digit number. So we see a very positive year coming forward.

Risks & concerns

Serratiopeptidase competitive intensity and price erosion
high

The largest product, Serratiopeptidase, faces competitive pressure, with management expecting a further 2-5% fall in revenue and 5-7% price erosion in FY26.

Management acknowledged
Global economic challenges and geopolitical tensions
medium

Volatile growth, high debt levels, weak investment, and ongoing geopolitical tensions (e.g., US-China trade disputes) create an uncertain operating environment.

Management acknowledged
US duties and tariffs
medium

Uncertainty around US duties and tariffs, particularly on pharma products and those related to China, could impact business, though it might also create opportunities for domestic production.

Management acknowledged
Slower-than-expected traction for new products
medium

New products in weight management, sugar management, and protein digestion did not achieve expected volumes last year, indicating a slower ramp-up than anticipated.

Management acknowledged
Raw material cost increase
low

Management anticipates a 1-2% increase in raw material costs going forward.

Management acknowledged

Q&A highlights

6 direct

Gross Margin Fall in Q4 FY25 Direct

So I mean, you rightly said as far as the numbers looks like same. But within that, there are some products. So depending upon the volume of sale of that particular product and the margin, that in fact impacts the overall gross contribution. And apart from that, the second question about the true-up of the inventory, because year-end valuation, when you do, then sometimes there are a few things which act as a balancing figure.

Analyst questioned the significant drop in gross margin despite stable segment mix, and management clarified it was due to product mix and year-end inventory valuation true-up, which is a one-time adjustment.

Asked by Nikhil from SIMPL

FY26 Outlook and Impact of US Tariffs Partial

So Nikhil, there are certain global challenges as of now. The picture is a little unclear on like U.S. front, particularly with the duties and how the things are moving. But as of what it stands, I think it's more like a positive side. We see good flow starting from this quarter. Some of the movements in the biocatalyst areas are going to start. ... So right now, there is a 10% duty, which if we just go by the last year, probably, we might have an impact of about $400,000.

Analyst inquired about the positive FY26 outlook given global uncertainties, especially US tariffs. Management acknowledged the challenges but maintained a positive outlook, noting potential benefits from tariffs shifting business to them, though their US facility is more for blending.

Asked by Nikhil from SIMPL

Serratiopeptidase Competitive Intensity and Contribution Direct

19%. But we see that there will be some challenge into this area, particular area. We see that it will have the pressure going forward as well. And as a policy, we will come out with some other products, which will give us the growth. We may see that there might be another 2%, 3% to 5% fall on the revenue on this particular area.

Analyst asked about competitive intensity for Serratiopeptidase. Management confirmed ongoing challenges and anticipated a further 2-5% revenue decline in this product area, indicating a strategic shift to other products for growth.

Asked by Umang Shah from Banyan Tree Advisors

Traction of New Products (Weight Management, Sugar Management, Protein Digestion) Partial

Umang ji, I don't know the exact percentage, but still we didn't get those kind of volumes which were expected, but a lot of growth from the U.S. is coming from other segments and other areas as of now. We are still working on those areas, but the traction what we expected didn't come out last year.

Analyst questioned the revenue contribution of recently launched products. Management admitted that expected traction was not achieved last year, but noted growth from other segments in the US, indicating slower-than-anticipated ramp-up for these specific new offerings.

Asked by Umang Shah from Banyan Tree Advisors

Marketing Issues and Success in Overseas Markets Direct

Okay. I think to our knowledge, as such, I think only the issue we might have mentioned is that we have to expand our marketing efforts in particularly overseas market. And that's where like we might have discussed that for a particular segment or a particular category of products when we talk about animal feed business, how do we really expand our marketing reach to overseas market where a lot of issues are there for the registration of the products, for having a distributor.

Analyst asked about past marketing difficulties. Management clarified that challenges primarily relate to expanding marketing reach in overseas markets, product registration, and distributor networks, especially for animal feed, and they are actively working on these.

Asked by Shubham Sehgal from Skill Ventures

Specialized Manufacturing Segment Growth Sustainability Direct

Yes. I think if not 30%, at least this business is going to grow more than 20% in the coming year as well. And the factors is like the capacities have been created. In FY '24, there was a challenge. I think we have mentioned earlier, there was a fire in that plant. So because of that, the manufacturing has, to some extent, impacted. So FY '25, full-fledged like the plants were in operation. And we also added some capacity in FY '25.

Analyst questioned if the 30% growth in Specialized Manufacturing was sustainable. Management guided for over 20% growth in FY26, attributing past growth to capacity creation and recovery from a fire incident in FY24.

Asked by Shubham Sehgal from Skill Ventures

R&D Center Update Direct

So we expect to finish the construction work by the December of this year. And some portion will start in the last quarter of this year, particularly. And so, I mean, it's a 5-floor building. The last slab is in process right now, and then all the other civil work has to be done. But it is on track right now.

Analyst sought an update on the R&D center. Management confirmed that construction is on track to be completed by December 2025, with some portions starting in Q4 FY26, indicating progress on a key strategic initiative.

Asked by Shreyans Gathani from SG Securities

Evoxx Order Update Direct

Yes. So, that order has already materialized. I guess, I already confirmed that, right, whatever we were talking on that. And we are working on that. In similar areas, we are still talking with a couple of more people. But as of now, it's in the process.

Analyst asked for an update on a previously discussed Evoxx order. Management confirmed the order has materialized and they are pursuing similar opportunities, suggesting progress in turning around the Evoxx subsidiary.

Asked by Shreyans Gathani from SG Securities

3 min read 6 chapters

Detailed narrative

Global Economic Scenario and Outlook

The global economy is experiencing moderate growth amid persistent challenges such as high debt levels, weak investment, and ongoing geopolitical tensions, including trade disputes involving major economies like the U.S., China, and the European Union. Despite these uncertainties, management maintains a positive outlook for FY26, anticipating mid-double-digit revenue growth. They acknowledge potential impacts from US tariffs but also see opportunities for business shifts.

Q4 and Full Year FY25 Financial Performance

For Q4 FY25, Advanced Enzyme reported a revenue of INR 1,672 million, marking a 6% YoY growth but a 1% sequential degrowth. EBITDA stood at INR 456 million, with a margin of 27%, down from 31% in the previous quarter and Q4 FY24, primarily due to product mix changes and year-end inventory valuation true-ups. Full-year FY25 revenue grew 2% to INR 6,369 million, with EBITDA at INR 1,944 million (31% of sales) and PAT at INR 1,340 million (21% of sales).

Segmental Performance and Key Product Trends

In Q4 FY25, Human Nutrition contributed 62% of revenue, growing 1% YoY. Animal Nutrition grew 13% YoY, contributing 12%. Bio-Processing contributed 17% with 8% YoY growth, while Specialized Manufacturing showed strong 39% YoY growth, contributing 9%. For FY25, Human Nutrition revenue declined by approximately 3% (INR 132 million), mainly from domestic markets. Serratiopeptidase, a key product, saw its revenue decline to INR 1,193 million in FY25 from INR 1,310 million in FY24, with management expecting a further 2-5% fall in FY26 due to competitive pressures.

R&D and Innovation Initiatives

Advanced Enzyme increased its consolidated R&D expenditure to 5.3% of revenue in FY25, up from 4.53% in FY24, reflecting a commitment to long-term growth. The company filed a food enzyme dossier for approval in Europe and two GRAS Dossiers with the U.S. FDA for food processing enzymes. Additionally, three patent applications related to innovative sugar management technologies were filed. The construction of a new 5-floor R&D center is on track for completion by December 2025, with some AI implementation expected this year.

Sustainability and Subsidiary Performance

The company enhanced its sustainability efforts by installing an additional 350-kilowatt solar power plant, bringing its total clean energy capacity to 510 kilowatts. This plant generated 315,000 units last year, covering 5-10% of the Sinnar facility's consumption. Subsidiary performance was mixed: JC Biotech's revenue was INR 600 million with PAT of INR 12 million in FY25. Evoxx reported a loss of INR 39 million in FY25, though management expects a turnaround in FY26. SciTech demonstrated strong growth, with revenue of INR 542 million (+30% YoY) and PAT of INR 37 million in FY25.

Strategic Focus and Future Growth Drivers

Management is optimistic about FY26, projecting mid-double-digit revenue growth. Key growth drivers are expected to be the biocatalyst area and animal feed business, with Specialized Manufacturing also anticipated to grow over 20%. The company aims to maintain gross contribution margins at 76-77% and EBITDA margins at around 31%. Efforts are underway to expand marketing reach in overseas markets and improve product registration processes, particularly for the animal feed segment.

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

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