Advanced Enzyme reports Q1 washout, normalisation likely from H2FY23ADVENZYMES - 272 Change: -1.20 (-0.44 %)
News: Revenues declined 12% YoY to Rs 121 crore on the back of 9% YoY de-growth in Human nutrition segment to Rs 81 crore being partially offset by growth of 11% YoY in animal nutrition to Rs 16 crore. Bio processing segment de-grew 10% YoY to Rs 18 crore while specialised manufacturing sales was at Rs 6 crore this quarter. EBITDA margins contracted 2026 bps YoY to 25.5% mainly due to higher input cost and other expenditure. Subsequently, EBITDA de-grew 51% YoY to Rs 31 crore while net profit declined 53% YoY to Rs 18 crore.
View: Advanced Enzyme reported below par performance this quarter and margins was significantly below I-direct estimates. Advanced Enzyme has witnessed logistics crunch, soaring input costs and supply chain concerns across geographies for last few quarters affecting overall business in enzymes and probiotics space. However, historically, strong margins and healthy return ratios is testament to the pricing power and balance sheet strength of the company. Going ahead, business environment is likely to improve from H2FY23 and management intends to augment its R&D capability for better facilitation and strengthening of in-house R&D capability, in its quest to improve scalability and a possible foray into more complex enzymes and launch more products in target market of probiotics.