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Analyst Meet / AGM
17-Nov-20
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Conference Call
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Advanced Enzyme Technologies
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Expects lower single-digit growth for FY21
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Advanced Enzyme Technologeis held a conference call on November 12, 2020 to discuss the results for the quarter ended Sep20 and way forward. Mr. Mukund Kabra (Director) and Mr. BP Rauka (Group CFO) of the company addressed the call.
Highlights of the Concall
- The company exports levels are back to normal level except in Europe which is again facing the second wave of lockdown.
- All its manufacturing units are running efficiently and progressively and are progressing well towards normalcy
- Probiotics business is growing good and is expected to improve further in the coming quarters
Q2FY21 sales were up 8% YoY at Rs 120 crore led by impressive growth across all business segments, with Animal Healthcare, Human Healthcare and Industrial divisions delivering YoYgrowth of 2%, 7% and 16%, respectively.
Sales in the EVOXX business stood at Rs 11.1 crore, while EBITDA was at Rs 50 lakh for H1FY21. Sales in JC Biotech was at Rs 21.4 crore (Serrati peptidase - Rs 48.8 crore) for H1FY2
- Gross margin improvement was driven by decreasing raw material costs per kg, better product mix with increasing operational efficiency. No sales recorded from the top customer in the last three quarters. Top 10 customers contributed around 40% of sales this quarter.
- R&D expenditure was Rs 5 crore during the quarter and Rs 8.9 crore for H1FY21 against Rs 8.8 crore in H1FY20. In H1FY21, new clients contributed 1.5% of total sales growth of 4%, with 2.5% coming from existing customers.
- Enzymes margins are slightly better in the US markets due to customized solution nature of the business, which is more prevalent in matured markets. Domestic pricing has remained steady, while it was high in the export market.
- The food market is huge in EU and US, and the company can play the second supplier role in these markets. The B2C business in USA is showing good growth (expects to close this year with US$5 million for FY21 vs. US$3 million in FY20).
- Dossiers registrations (already acquired plus in progress) in European markets will increase revenue visibility of the products and will aid to ramp up revenue.
- Utilization levels for the quarter stood at around 55%. R&D spend aimed at 4-5% off sales going ahead. Expected spending on Nasik facility in next 3-4 years is Rs60-70 crore. Other than this, organic capex targeted for Rs 12-15 crore for next three years.
- The company maintains lower single-digit growth stance for FY21
- The company also maintained its guidance to double revenues in the next 5 years while EBITDA margin is expected to be in the range of 40-48%. Going ahead ramp up in production would lead to higher operating costs as well.
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