Advanced Enzyme Technologies Limited Q3 FY26 Earnings Call Summary

Summary

Advanced Enzyme Technologies Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 04, 2026, 17:30 IST

Event Participants

Executives 4 Beni Rauka (Group CFO), Mukund Kabra (Whole Time Director), Ronak Saraf (Investor Relations Manager), Vasant Rathi (Chairperson)

Analysts 8 Abhishek Navalgund (Centrum Broking), Chandramouli Jaganathan (Individual Investor), Ketan Chheda (Individual Investor), Ravi Purohit (Securities Investment Management), Rohan (Blue River Capital), Rohit Ohri (Progressive Shares), Sajal Kapoor (Antifragile Thinking), Umang Shah (Banyan Tree Advisors)

Financials & KPIs

Geographic & Segment Commentary

• Human Healthcare: This segment contributed 56% of total revenue but saw a 6% YoY decline. Management attributed the weakness to “tremendous uncertainty” in the US nutritional market and higher raw material costs affecting consumer spending in Pharma and API businesses.
• Animal Healthcare: Delivered robust performance with 22% YoY growth. Success is attributed to recent registrations in Asia and the “Rest of the World” markets starting to yield volume results after three years of development.
• Bioprocessing (Food & Non-Food): The food business grew 16% YoY, while non-food (industrial) remained relatively flat at -5% YoY. Management is targeting new applications in textiles and disinfectants to drive future non-food growth.
• Specialized Manufacturing: Remained flat YoY at 9% of revenue. This segment focuses on effervescent technology (tablets/sachets) and is currently expanding its footprint in the Indian domestic market.

Company-Specific & Strategic Commentary

• New R&D Center (Nashik): A large-scale facility is scheduled for commissioning by the end of Q2 FY27. It will focus on strain development, protein engineering, and fermentation to accelerate the product pipeline for industrial and healthcare applications.
• B2C Strategy (Wellfa Brand): Management has carved out the B2C business into a subsidiary, Nutrazyme, with a dedicated team. Currently generating ₹1-1.5 crore annually, they aim to scale this via brand building and potential JVs over the next 2-3 years.
• US Tariff Dynamics: Management noted that reciprocal tariffs have reduced from 25% to 18%. While these remain a headwind, the company is attempting to pass on costs to US customers to protect margins.
• Capacity Expansion: Utilization currently stands at 55-60%. No major greenfield CapEx is planned for the current year; however, a ₹50 crore expansion is anticipated around FY2028-29.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

US Market Outlook

• Question: What is the outlook for US sales given the new 18% tariff regime? (Rohan)
• Answer: While tariffs are a headwind, the US economy remains strong. The company is seeing increased inquiries and expects better volume trends later this year as they pass on costs (Vasant Rathi).

Product Innovation

• Question: Which product will be the next Serratiopeptidase? (Abhishek Navalgund)
• Answer: We have multiple products in the pipeline. The new R&D center will “fasten up” the development of these novel enzymes (Mukund Kabra).

EU Segment Growth

• Question: Why hasn’t EU revenue grown despite having 9 product approvals? (Ketan Chheda)
• Answer: Approvals are a prerequisite to avoid zero sales, not a guarantee of volume. We are realigning Evoxx from contract research to product sales to drive growth (Beni Rauka/Mukund Kabra).

JC Biotech Loss

• Question: Why did JC Biotech report a loss this quarter? (Umang Shah)
• Answer: This was due to a one-time annual repair and maintenance spend (stores and spares) coinciding with lower quarterly sales (Mukund Kabra).

Key Takeaway

Advanced Enzyme Technologies reported a mixed Q3 FY26, with revenue growing 2% YoY to ₹171.9 crores, while EBITDA margins compressed to 29% due to US market headwinds and inflationary pressures. While the core Human Healthcare segment (56% of revenue) faced a 6% decline due to US nutritional market uncertainty, the Animal Healthcare and Bioprocessing segments showed resilience with 22% and 13% growth respectively. Strategically, the company is pivoting toward a dedicated B2C approach via its “Wellfa” brand and is nearing the completion of a major R&D facility in Nashik (slated for Q2 FY27) to drive protein engineering and industrial enzyme breakthroughs. Management maintained a medium-term growth guidance of 13-15% CAGR, banking on geographic expansion in Asia and the normalization of US trade dynamics. Despite near-term margin pressure from tariffs (estimated at a 100 bps impact), the company remains focused on diversifying its high-margin healthcare portfolio and improving capacity utilization from the current 60% level.