Advanced Enzyme Technologies Limited — Q4 FY26 earnings call

Call held 12 May 2026

Management summary

Advanced Enzyme Technologies reported record-high quarterly and annual revenues in Q4 and FY26, driven by broad-based growth across all segments and strong profitability. Q4 revenue reached INR 2,034 million (up 22% YoY) and annual revenue hit INR 7,458 million (up 17% YoY), with PAT growing 69% YoY in Q4. However, management highlighted potential near-term margin pressures from global inflation and geopolitical tensions, particularly in the challenging US market, and noted the cancellation of the interim dividend.

Highlights

  • Highest-ever quarterly revenue of INR 2,034 million in Q4 FY26, reflecting a robust 22% YoY growth.

  • Highest-ever annual revenues of INR 7,458 million in FY26, representing a solid 17% YoY growth.

  • Strong operating profitability in Q4 FY26, with EBITDA of INR 632 million, registering a 39% YoY growth and maintaining a 31% margin.

  • Profit after tax (PAT) for Q4 FY26 grew significantly by 69% YoY to INR 453 million, with full-year PAT up 30% YoY.

  • All business divisions (Human Healthcare, Animal Healthcare, Bioprocessing, Specialized Manufacturing) delivered healthy growth.

Concerns

  • Increasing geopolitical disruption and inflation could escalate input essential prices (fuel, salt, solvent, packaging, logistics), potentially creating near-term margin pressures.

  • The US market remains challenging due to inflationary pressures impacting discretionary spending, making it a difficult year.

  • Gross margin moderated sequentially in Q4, attributed to product mix and variable costs.

  • The interim dividend was cancelled, with management stating the board is evaluating other options for shareholder value.

Key financials

2 periods

Headline

  • Revenue from Operations
    2,034 Mn
    YoY +22% QoQ +18%
  • EBITDA
    632 Mn
    YoY +39% QoQ +28%
  • EBITDA Margin
    31%
  • PAT
    453 Mn
    YoY +69% QoQ +5%
  • PAT Margin
    22%
  • Annual Revenue
    7,458 Mn
    YoY +17%
  • Annual EBITDA
    2,291 Mn
    YoY +18%
  • Annual PAT
    1,736 Mn
    YoY +30%
  • Annual PAT Margin
    23%

FY26

  • R&D Spend
    356 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
    1,281 Mn Revenue (Q4 FY26)63% Revenue Contribution15% YTD Growth (FY26)
  • Animal Healthcare
    250 Mn Revenue (Q4 FY26)13% Revenue Contribution25% YTD Growth (FY26)
  • Bioprocessing
    17% YoY Growth (Q4 FY26)-10% Sequential Contraction (Q4 FY26)16% YTD Growth (FY26)
  • Specialized Manufacturing
    17% YoY Growth (Q4 FY26)16% Sequential Growth (Q4 FY26)9% Revenue Contribution23% YTD Growth (FY26)
  • Biocatalysis
    247 Mn Revenue (FY26)174 Mn Revenue (FY25)
  • Serratiopeptidase
    45% YTD Growth54% QoQ Growth
  • JC Biotech
    172 Mn Revenue (Q4 FY26)15 Mn EBITDA (Q4 FY26)3 Mn PAT (Q4 FY26)728 Mn Annual Sales (FY26)92 Mn Annual EBITDA (FY26)29 Mn Annual PBT (FY26)
  • Evoxx
    88 Mn Revenue (Q4 FY26)19 Mn EBITDA (Q4 FY26)14 Mn PAT (Q4 FY26)319 Mn Annual Revenue (FY26)72 Mn Annual EBITDA (FY26)50 Mn Annual PAT (FY26)
  • Scitech
    179 Mn Revenue (Q4 FY26)38 Mn EBITDA (Q4 FY26)29 Mn PAT (Q4 FY26)668 Mn Annual Top Line (FY26)104 Mn Annual EBITDA (FY26)45 Mn Annual PAT (FY26)

Capital allocation

high confidence
  • Capex ₹1,300 Mn
    • R&D CapEx ₹1,300 Mn
    In absolute terms, the R&D revenue expenditure is likely to go up by INR 50 million. Okay. And CapEx is definitely going on. So that will be, again, additional, I think, INR 50 crores we will be spending this year. So I think overall CapEx on R&D will be about INR 130 crores.
  • Liquidity Cash ₹7,000 Mn
    I mean, looking at our balance sheet, they were around INR 700 crores of cash.

Guidance & targets

Margin

  • Overall Margins Margin · next year · Medium confidence similar
    I wouldn't say that too much of impact. 1% or 2% is always possible, and that's a variability what we have. And I wouldn't like to get into the nitty-gritty of it, maybe, like a Rauka, you can explain. But if you ask me more or less, we will go with the same margins, and that's what our assumption is.

    — Mukund Kabra

R&D

  • New R&D Center Operationalization R&D · latter half of this fiscal year · High confidence fully operational
    our new R&D center in Nashik is expected to become fully operational in the latter half of this fiscal year, significantly boosting our product development bandwidth.

    — Vasant Rathi

Product Approval

  • Anti-inflammatory Products EU Approval Product Approval · this year · High confidence approval
    Additionally, we are anticipating approval of our anti-inflammatory products, that we filed two years back in European region, during this year.

    — Vasant Rathi

  • Novel Food Product Approval Product Approval · this year · High confidence approval
    It's a novel food which we submitted two years back, and we expect this year it should be approved. If it gets approved, then we will be the only person who can supply that product for next five years or ten years.

    — Mukund Kabra

Capacity

  • Capacity Increment in Subsidiary Capacity · September · Medium confidence decision to increase
    In the main company, we will be taking that call after September. As of now, we do have a preparation on the on the ground, so that whenever we want to go, we can go very quickly, rapidly. The infrastructure buildup is done. We may look into some capacity increment in the one of the subsidiary company this year. So those are the plans as of now.

    — Mukund Kabra

Market context

  • Overall Revenue Growth Revenue · FY27 · Medium confidence double-digit
    I can't comment on the particular product, but overall, what we expect to grow is in the double-digit and maybe double-digit, and that's, like, what we are aiming for, and that is where all the efforts are there.

    — Mukund Kabra

What to watch in Q1 FY27

New R&D Center Operationalization

Next quarter / H2 FY26
Current Expected in latter half of this fiscal year
Target Fully operational

Why it matters

Operationalization of the new R&D center is crucial for boosting product development bandwidth and accelerating the innovation pipeline.

our new R&D center in Nashik is expected to become fully operational in the latter half of this fiscal year, significantly boosting our product development bandwidth.

Risks & concerns

  • Geopolitical Tensions & Supply Chain Disruption

    high

    Compounding mix of conflicts, geopolitical tensions, and inherently fragile supply chain causing uncertainty, transportation bottlenecks, and trade restrictions.

    Management acknowledged

  • Inflation & Input Cost Escalation

    high

    Rising inflation due to higher manufacturing and shipping costs, and escalating prices of input essentials like fuel, salt, solvent, packaging, and logistics, potentially creating near-term margin pressures.

    Management acknowledged

  • US Market Challenges

    high

    Enormous inflationary pressures in the US economy and impact on people's discretionary expenses make it a very challenging year for the US market.

    Management acknowledged

  • Competitive Market & Pricing Pressure

    medium

    Very competitive global market makes it difficult to pass on all cost increases without losing market share.

    Management acknowledged

  • Regulatory Dependence (Biocatalysis)

    medium

    Biocatalysis area is challenging due to dependence on government body regulations and global competition.

    Management acknowledged

Q&A highlights

6 direct
Gross Margin Moderation Partial
So, this is mainly what happens is because of the variable cost and fixed cost issue, right? If you have incremental sale, then definitely your gross margins are going to go up because your fixed expenses remains fixed, and you have that operating leverage.

Analyst questioned sequential gross margin moderation despite EBITDA increase, indicating potential pressure points not fully offset by operating leverage.

Asked by Abhishek Navalgund

Serratiopeptidase Growth & Pricing Partial
So, let's not look into the quarter-and-quarter basis. I would say some quarters, you will have a higher growth on the particular products, some quarters some other products will have it. In terms of pricing, the pricing is more or less constant. It's more driven by the volume, but at the same time, going forward, we are looking how do we increase the cost and pass on some of the cost, and which we are trying to do from the New Year.

Analyst sought clarity on whether strong Serratiopeptidase growth was volume or price-driven, and if it's sustainable, with management indicating volume-driven growth and a reluctance to share specific product numbers due to competition.

Asked by Kunal Thanvi

US Market Performance & Strategy Direct
Rajas, the market is changing in U.S. quite a bit. There is more concentration on the deliverable registration, the studies, etc. And U.S. strategy, changing accordingly. So, market is, as we said before, also very challenging, but we are making very good inroads with the registration in the regulatory areas, as well as in the market segments, okay. So, it is going to be, as I said before, very challenging year, but we are expecting to grow in U.S. market also.

Analyst highlighted a significant decline in US revenue, prompting management to acknowledge the challenging market conditions and strategic shifts towards regulatory focus and market segments.

Asked by Rajas Joshi

Capital Allocation & Interim Dividend Direct
That's again, I will say that is the board decisions, which board always evaluate from time to time on how to enhance our shareholder's value by different modes and methods, as you guys know very well. So we are always, as a company board member, are always looking to see how and where we can do, how we can benefit from this to our shareholders.

Analyst questioned the cancellation of the interim dividend despite a strong cash balance, leading to management's explanation of ongoing board evaluation for shareholder value, including potential buybacks.

Asked by Rajas Joshi

New R&D Center & Expenses Direct
Of course, the expenses are going to go up, but not like we will try to maintain between the whatever the current percentage what we are going up because it also depends on the function of the sales. In terms of persons, some persons we already hired, some persons we are planning to shift from our existing R&D center, and some persons we are in a process to hire. In terms of capacity, the capacity in a given time, it will take some more time to really come to the fullest utilization, but we intend to increase in the first phase by the threefold of what current capacity what we have.

Analyst sought details on the financial and operational impact of the new R&D center, revealing plans for increased expenses, hiring, and a threefold capacity expansion in the first phase.

Asked by Shreyans Gathani

US Tariffs & Margin Impact Direct
Yeah, to a certain extent, yes. And it is a gradual process to pass it on and to explain. So that's a process, but you cannot just pass on everything to the customer and lose the market share.

Analyst inquired about the impact of US tariffs on margins, confirming that the company is still absorbing some costs to avoid losing market share.

Asked by Ashish Thavkar

Peptide Enzymes & New Chemistries Direct
It's a very interesting opportunity. So, we will try to explore it also. Since we are in a protein area, and enzymes, proteins go hand in hand, and peptides are also part of it. So very interesting areas, and we are exploring all various different possibilities.

Analyst explored new growth avenues in peptide enzymes and chemistries, with management confirming it as a strategic focus area with various possibilities.

Asked by Ashish Thavkar

Patents Decline Direct
So, some of the patents, which were not giving the revenue, we thought that is not significant. We are cut down from the list, but we filed two or three. I need to see the exact numbers which we got granted this year as well. But few of the old patents which we thought are not, making contribution to the revenue, we are not focusing on them.

Analyst noted a decrease in the number of patents, prompting management to clarify that non-revenue generating patents were removed, while new ones are being filed.

Asked by Ketan Chheda

3 min read 6 chapters

Detailed narrative

Record Financial Performance in Q4 and FY26

Advanced Enzyme Technologies delivered its highest-ever quarterly revenue of INR 2,034 million in Q4 FY26, marking a robust 22% YoY growth and 18% sequential increase. For the full fiscal year, annual revenues reached a record INR 7,458 million, representing a solid 17% YoY growth. Operating profitability also showed strong momentum, with Q4 EBITDA at INR 632 million, up 39% YoY, and PAT at INR 453 million, up 69% YoY. The full-year PAT grew 30% YoY, maintaining a healthy 23% margin.

Broad-Based Segmental Growth and Product Mix

All business divisions contributed to the healthy growth. Human Healthcare, the largest segment, grew 24% YoY in Q4 to INR 1,281 million, contributing 63% of total revenue, driven by higher sales volumes in pharma API, biocatalysis, and nutritional business. Animal Healthcare revenue increased 19% YoY to INR 250 million, and Specialized Manufacturing saw a 17% YoY growth. Bioprocessing recorded 17% YoY growth in Q4, primarily fueled by a 20% YoY growth in the food business, while non-food business contracted slightly.

Strategic Investments in R&D and Innovation Pipeline

The company continued to invest in enhancing its R&D capabilities, with the new R&D center in Nashik expected to be fully operational in the latter half of this fiscal year, significantly boosting product development bandwidth. Total R&D expenditure for FY26 was INR 356 million, and consolidated R&D spend was 5.6% of Q4 revenue. Regulatory efforts included filing two food enzyme dossiers with EFSA and three with the US FDA, with approval for anti-inflammatory products in Europe anticipated this year, and a novel food product approval expected this year.

Navigating Global Headwinds and Margin Pressures

Management acknowledged severe disruptions from geopolitical tensions, supply chain issues, and rising inflation, which could lead to near-term margin pressures from escalating input costs such as fuel, salt, solvents, packaging, and logistics. The US market, in particular, remains challenging due to inflationary pressures impacting discretionary spending. The company aims to mitigate these pressures through productivity improvements and cost reductions, rather than fully passing on costs to avoid market share loss in a competitive global market.

Capital Allocation and Shareholder Value Focus

The company reported a cash balance of approximately INR 700 crores. While an interim dividend was not declared, the board is actively considering various options, including buybacks, to enhance shareholder value. R&D CapEx for FY26 is projected at INR 130 crores. Capacity expansion plans are being evaluated, with a decision on increasing capacity in a subsidiary expected in September, leveraging existing infrastructure to allow for a 50% increment.

Exploring New Growth Avenues and Market Expansion

Advanced Enzyme is actively exploring new growth areas, particularly in peptide enzymes, which are seen as a very interesting opportunity given their protein-related expertise. The company is also focusing on expanding its presence in the Indian market across human nutraceutical, food, and animal feed segments, expecting healthy growth from these areas. The strategy involves a continuous process of working on different products and opening new markets, rather than relying on a single product.

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