Advanced Enzyme

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.

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.

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.

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.

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.

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.