Advanced Enzymes Q2 Results Reviews - Challenging Times: Nirmal Bang

Nirmal Bang Report

Advanced Enzyme Technologies Ltd.’s Q2 FY23 Ebitda came in ~5% below our estimate on account of continued demand pressure across segments, except animal nutrition. The management indicated that macro-economic challenges globally affected the demand environment and operating costs remained elevated.

Advanced Enzyme's margin pressure continued on account of inflation-led pressure on raw materials and power and fuel costs. The management indicated that an increase in lab costs, travel costs and sales promotion expenses put further pressure on profitability in Q2 FY23.

Also, product mix was not favorable on account of lower sales of nutraceuticals due to excess inventory at clients’ end and higher salience of the business-to-business segment.

While probiotics sales have inched up in the exports markets, domestic market revenue was almost nil. Animal Nutrition and bio-processing segments grew by ~26% YoY and ~64% YoY, respectively.

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