Good morning, everyone. Welcome to Advanced Enzyme Technologies' Q4 and FY26 earnings conference call.

We hope you all have gone through our financials press release and PPT, which has been posted in the investor relations section of our website. We have with us Mr.

Vasant Rathi, Chairperson, Mr. Mukund Kabra, Whole-time Director, and Mr.

Beni Prasad Rauka, Group CFO. Today, the management will discuss the performance and business highlights, updates on strategies, and respond to any questions that you may have.

As is usual, for ease of discussion, we will look at the consolidated financials. Now I'd like to draw your attention to the fact that some of the information shared during this call, particularly regarding our plans, strategies, and future outlook, may contain forward-looking statements.

These statements involve inherent risks and uncertainties and are based on current expectations, forecasts, and assumptions. Actual results may differ materially from those expressed or implied in these statements, influenced by a range of factors, including, but not limited to, economic conditions, changes in government policies, regulatory developments, and other unforeseen circumstances.

Recipients are cautioned not to place undue reliance on these forward-looking statements as they are not guarantees for future performance and should not be viewed as substitute for independent judgment. The company undertakes no obligation to update or revise any such statements, whether as a result of new information, future events, or otherwise.

Now, without any further ado, we shall commence this call. Over to you, Vic, sir.

Thank you, Ronak. Good morning, everyone.

I know this is the first time we are changing the call time from 4:00 to 9:00. Thank you for taking your time early in the morning during the working day.

I sincerely appreciate you all taking your valuable time. I extend my heartiest welcome to everyone joining us today on the conference call to discuss the financial results for the quarter and fiscal year ended 31st March 2026.

The global economy has faced severe disruption, as you all know, in recent years due to a compounding mix of conflicts, geopolitical tensions, and an inherently fragile supply chain. Conflicts between nations have interrupted the steady flow of energy, food, and crucial raw materials, thereby injecting substantial uncertainty across international market.

Concurrently, supply chain disruption worsened by transportation bottleneck and stringent trade restrictions have slowed down production cycles and delayed the delivery of essential goods worldwide. These escalating changes challenges have significantly contributed to rising inflation as a business face higher manufacturing and shipping costs that are ultimately passed on to the consumers.

Consequently, the prices of everyday necessities have soared globally, placing heavy financial pressure on households and weakening purchase power in this uncertain global environment. Despite these daunting global supply chain challenges, we have maintained a highly consistent supply track record.

However, we remain vigilant as increasing geopolitical disruption will escalate the prices of input essentials such as fuel, salt, solvent, packaging, vis-a-vis also logistics, potentially creating near-term margin pressures across the industry. Turning in our financial performance, I'm delighted to announce that Advanced Enzyme has reported its highest-ever quarterly and annual revenue for the fiscal year ended March 2026.

For the fourth quarter, we reported revenue from operation at ₹2,034 million, reflecting a robust year-on-year growth of 22% and sequential growth of 18%. For the full year, our annual revenues stood at ₹7,458 million, representing a solid growth of 17%.

Our operating profitability also demonstrated excellent momentum. EBITDA for the quarter stood at ₹632 million, registering a 39% year-on-year growth and 28% sequential growth on a full-year basis.

EBITDA grew by 18%. EBITDA margin for both the quarter and the year remains strong at 31%.

Profit after tax stood at ₹453 million for the quarter, showcasing a staggering growth of 69% on year-on-year basis and 5% subsequently. On the annual basis, PAT grew by 30%.

Consequently, our PAT margin stood at 22% for the quarter and 23% for the full fiscal year as compared to 21% in FY25. Our overall financial performance is firmly in line with the earlier guidance.

All of our business divisions delivered healthy growth, and we are confident that this steady momentum will continue into the coming year. Looking at the broader industry landscape, global pharmaceutical, nutraceutical, and biotechnology sectors are increasingly shifting towards wider adoption of enzyme across various regions.

This macro trend is driving substantial market demand for player like us, who can offer integrated end-to-end capabilities and customized solutions across these platforms. Over the course of the year, we have taken several strategic steps to fortify our mid- to long-term market positioning.

We have continued to invest in enhancing our R&D capabilities, which will accelerate our innovation pipeline while parallelly exploring expansion into newer, high-potential geographics. On the regulatory and compliance front, during this year, we filed two food enzyme dossiers with the European Food Safety Authority, EFSA, and three GRAS dossiers with the US FDA.

As mentioned in our previous interaction, our new R&D center in Nashik is expected to become fully operational in the later half of this fiscal year, significantly boosting our product development bandwidth. Additionally, we are anticipating approval of our anti-inflammatory products that we filed 2 years back in European region during this year.

Now I will take your take you through our segment-wise revenue performance for the fourth quarter of FY26 as well as full fiscal year 2026. Let's begin with the human healthcare, our largest and most critical segment.

Revenue for quarter 4 '26 stood at ₹1,281 million, making a 24% year-on-year growth and 33% sequential increase. For the full year, year-to-date basis, we observe a solid growth of 15%.

This growth was primarily driven by higher sales volume in pharma API, biocatalysis, and nutritional business. Human healthcare continues to be our flagship division, contributing 63% of our total revenue.

Animal healthcare, revenue in this segment rose to ₹250 million, delivering a 19% increase year-on-year, 2% sequential, and 25% on year-to-date basis. Animal healthcare accounts for 13% of our total revenue.

Animal healthcare accounts for 13% of our total revenue. The growth is mainly driven by increased sales in Asia.

Turning to bioprocessing, this segment recorded 17% year-on-year growth during the quarter despite a 10% sequential contraction, finishing the year with 16% year-to-date growth. The annual growth was predominantly fueled by healthy performance of our food business, which grew by 20% year-on-year and 19% on the year-to-date basis.

Conversely, the non-food business contracted by 1% year-on-year and 7% sequentially, remaining flat on the year-to-date basis. Lastly, the specialized manufacturing segment registered a 17% growth year-on-year and 16% sequential growth.

On year-to-date basis, it grew by impressive 23%. This segment currently represents 9% of our overall revenue.

Our strategic product mix within each business division and operating leverage has continued to perform exceedingly well, supporting our healthy overall margins. We anticipate that our entire portfolio spanning human nutrition, animal nutrition, and bioprocessing will perform even better and grow stronger as we move into the new fiscal year.

That said, our business outlook remains extremely steady. We'll continue to focus on optimized capacity allocation, improving supply chain efficiencies, ramping up new product launches, and expanding our operational footprints across both developed and emerging markets.

With this, I will now hand over this call to Rauka. He will walk you through the financials and key subsidiary numbers.

Beni?

Thank you very much, sir. Good morning, everyone.

I hope you all are in good health and doing well. On the company's consolidated financials for the fourth quarter and year-end of fiscal year 2026, year-on-year basis, our revenue is increased by ₹362 million, 22%, from ₹1,672 million to ₹2,034 million.

Our EBITDA increased by ₹176 million, a 39% of increase, from ₹456 million to ₹632 million, and it's stood at 31%. Profit before tax after exceptional item increased by ₹163 million, a 38% increase, from ₹430 million to ₹598 million.

PAT increased by ₹186 million from ₹260 million to ₹453 million. PAT is 22% of our revenue in this particular quarter.

Quarter-on-quarter basis, this is sequential, revenue increased by ₹315 million, 18% increase, from ₹1,719 million to ₹2,034 million. EBITDA increased by ₹138 million, 28% increase, from ₹494 million to ₹632 million.

Profit before tax after exceptional item increased by ₹15 million from ₹583 million to ₹598 million. Profit after tax increased by ₹21 million from ₹432 million to ₹532 million.

Financial year performance, YTD FY26 with FY25 annual basis, our revenue increased by ₹1,089 million, 17% increase, from ₹6,369 million to ₹7,458 million. Our EBITDA increased by ₹347 million.

This is 18% increase from ₹1,944 million to ₹2,291 million, and it is 31% of our revenue, and even FY25 it was 31%. Profit before tax increased by ₹451 million, a 24% of increase, from ₹1,874 million to ₹2,325 million.

This is 31% as compared to 29%. Profit after tax increased by ₹396 million, a 30% increase, from ₹1,340 million to ₹1,736 million.

Our PAT stood at 23% of our revenue as compared to 21% in FY25. JC Biotech, revenue for last quarter, Q4, was ₹172 million, EBITDA ₹15 million, PAT of ₹3 million as compared to ₹112 million of revenue, ₹4 million of EBITDA, and PAT was negative in that particular quarter, ₹7 million.

JC on annual basis, sale is increased from ₹600 million to ₹728 million, EBITDA increased from ₹70 million to ₹92 million, and PAT increased from ₹12 million to 29%, ₹29 million. Evox for the quarter revenue stood at ₹88 million, EBITDA of ₹19 million, and PAT of ₹14 million as compared to revenue of ₹43 million and negative EBITDA of ₹4 million and negative PAT of ₹9 million in the quarter 4 of FY25.

On annual basis, revenue of Evox stood at ₹319 million as compared to ₹213 million, a 50% increase, and EBITDA is increased negative ₹12 [million?] to ₹72 million.

PAT is increased to ₹50 million as compared to ₹39 million negative in FY25. SciTech has performed excellent, and Q4 numbers stood at revenue ₹179 million, EBITDA of ₹38 million, and PAT of ₹29 million as compared to revenue of ₹156 million and EBITDA of ₹10 million and PAT of ₹5 million, respectively.

Annual basis, SciTech top line stood at ₹668 million as compared to ₹542 million, a 23% increase, and EBITDA stood at ₹104 million as compared to ₹76 million, a 37% increase, and PAT is ₹45 million as compared to ₹37 million, 22% of increase. On annual basis, our top product, which is anti-inflammatory enzyme, sales stood at 23%, and top 10 customer contributed 23% as compared to 22% in FY25.

B2C segment is about 0.9 million as compared to 1.19 million in FY20. I'm sorry, complete total number is 437, 4.37 million for FY26 as compared to 4.46 million in FY25.

Our R&D expenditure total on stand-alone basis is ₹356 million in FY26 as compared to ₹328 million in FY25. On consolidated basis, our R&D spend is about 5.6% during quarter 4 and 5.3% in the corresponding quarter of FY25.

This is all from my side. We shall open the floor for question-answer.

Hi, sir. Good morning, and congratulations on a good set of numbers.

You just explained the segment-wise details also. This clearly reflects that the quarter is all about growth that you have witnessed in serratiopeptidase, the anti-inflammatory enzyme.

I'm just curious that while our sequential margin is also kind of inched up, it is mainly because of the operating leverage maybe, but why the gross margin has kind of moderated on a sequential basis, especially when we see the Europe, US share is also more or less similar, and our human nutrition, which is the highest-margin segment, is also maintained, or rather gained some share in terms of revenue? This first question on the gross margin.

Can you repeat, Abhishek? Can you repeat exactly what you want to know about the gross margin, Abhishek?

I just wanted to know the movement that we have seen on sequential basis, the gross margin, while our human nutrition portfolio has done well, we have not lost share in terms of our US exposure also. What could be the reason why our gross margin has moderated on QoQ basis this quarter?

This is mainly what happens is because of the variable cost and fixed cost issue, right? If you have incremental sales, then definitely your gross margin are going to go up, because your fixed expenses remains fixed and you have that operating leverage.

At the same time, Abhishek, we try to improve the productivity and there are certain products which we could increase the productivity as well in this quarter. Okay.

That's a continuous process with the R&D which comes up. It's a combination of both, which helps us, even though the costs are little on a higher side because of all of this, inflations and other thing which is happening with the war.

Still, we could do it because of all the other factors, because there is a constant improvement on the output side as well.

Sorry, sir. Actually, what I was trying to ask you is while our EBITDA margin has increased, I think if we see a gross margin number, it has kind of dropped as compared to 3Q.

Sir,

you are talking about gross contribution, right?

PAT. PAT, PAT, Rauka.

Last quarter there was some Rauka, you can take Last quarter we had some extraordinary items on the PAT side.

No, no. I think, Abhishek, can you again come back with your question, please?

You are talking about gross margin?

No, no. We can take this offline.

That's fine. My question was on gross margin.

I'll connect with you later on this. I'm saying on the serratiopeptidase side, the increase that we have seen, this could be a function of some market share gain in the domestic market.

Is it fair to assume that this quarterly run rate will continue going ahead?

I think Mukund will give the answer.

I won't comment on that, Abhishek. There are always quarter-and-quarter variability particularly, but I would say that we'll retain most of it.

It's not only inflammatory products, but we are working on many other products as well, and those are also contributing.

Sure. You mentioned about the EU approval for the same product.

Possible to share how big would be the EU market for this product?

It's a novel food which we submitted 2 years back, and we expect this year it should be approved. If it gets approved, then we will be the only person who can supply that product for next 5 years or 10 years.

I need to see exactly what is the time frame which we get. That should be really interesting for us.

I won't be able to give the numbers, but the interest can be very big.

Sure. I'm not asking for any specific guidance, but any aspiration number that you can talk about, let's say, 5 years down the line, how do you see this product growing whenever we'll get the approval, post that?

We cannot,

[unclear]. Sure.

I can't comment on the particular product, but overall, what we expect to grow is in the double-digit and maybe big double-digit, and that's what we are aiming for, and that is where all the efforts are there. We won't be able to say about a single product or two products.

There are multiple things which we work.

Absolutely. My next question is on the current environment, wherein we are seeing inflation and everything.

I think you talked about fuel, salt, solvents, packaging, and logistics. Just would like to know in two branches, as in terms of raw material increase, I guess we are relatively sorted because we procure largely from India.

When it comes to these items like fuel, salt, solvents, packaging, logistics, how's the pass-through structure like in this quarter, and do you expect some margin pressure because of the full effect getting flowed through in 1Q?

There is always margin pressure. You want to take, Mama?

You go ahead.

Hello?

Vic, sir, you want to take?

Yeah. No, no.

Abhishek, there is always going to be margin pressure, nah? These are all uncertain times with what is going to happen tomorrow with your energy.

Industries very much based upon that of energy and chemical. So.

Yeah. My only point was basically is there will be a 1-quarter, 2-quarter lag?

Is it possible to comment on that, whether we are passing it on or partly passing it on to the customers?

No, Abhishek, it is difficult to pass on, very competitive world, global climate. You try to increase the productivity, increase the efficiencies and try to reduce the cost.

There are a lot of things which you have to work, and management is very aware of it, trying to compete in the global marketplace. We have to be very efficient.

Right. My last question, sir, in terms of guidance, what do you expect in revenue and margins in FY27 and a specific color on US business in particular?

Margin and things is as I mentioned before, is going to be steady, same area what we are talking about. We wanted to keep this momentum, and hopefully build upon it.

Okay? As far as US market is concerned, your second part of the question, there is enormous pressure of the inflammatory pressures here in the US economy due to energy.

Nobody knows what's going to happen in 15 days from now or 2 months from now. Overall, cost is dramatically increasing, and as I mentioned before in my comments before, the spending, or what you call it, people's discretionary expenses, is going to be a lot of pressure on that.

We'll see how that plays out. Okay?

This is going to be a very challenging year, no matter what. Okay?

Awesome. This was very helpful.

Thank you, and all the best.

You're welcome. Thank you.

Hi. Thanks for the opportunity.

I had two questions. One was if you can throw some light on India business growth in terms of pricing and volume.

Was there an element of price increases, because three, four quarters back, we saw significant price erosion in our largest product. Second question was to Mr.

Rathi about your thoughts on buyback of shares. You've been buying from open market, and there's a change in the taxation law in India post which buyback becomes good for the retail investors.

Any thoughts that you can share about capital allocation, because you've also not announced interim dividend this time around. Was curious to know how we are thinking about the cash that we have on the balance sheet.

I will try to answer your second question first. You guys are more professionals, knowing about the market and prices.

We'll be looking at all the necessary options of what is in the best interest of our shareholders and how we increase the value of our shareholders. Okay?

Because of the pressure on the board

Sir, is it fair to assume that buyback is also something that the board is considering?

It's a board's prerogative to look into various different areas, and I'm sure that on right time, board will take a decision.

Okay?

To see whatever they feel is best interest of the company's shareholders. Regarding your first part, Mukund can probably answer this.

Kunal, you want to know is there is a margin pressure or what?

No, my question was on serratiopeptidase, is the growth that we have seen in the Indian business side, is it entirely volume-driven or there was some price increase that also we saw during the quarter? Because four quarters back or three quarters back, when there was competition in this segment, we had talked about pricing pressures.

Is there a reversal of that pricing pressure now coming through leading to this kind of growth, or it was purely a volume growth that we have seen?

Let's not look into the quarter-and-quarter basis. I would say some quarters you will have a higher growth on the particular product, some quarter some other products will have it.

In terms of pricing, the pricing is more or less constant. It's more driven by the volume.

At the same time, going forward, we are looking how do we increase the cost and pass on some of the cost, and which we are trying to do from the New Year.

Sure. Fair.

Got it. Last question was, you talked about the US market, there's a possible slowdown will continue for FY27 given the geopolitical situation.

Then at the other end, we've spoken about our aspiration to do a double-digit growth in FY27. If you can break down these contours into what are the markets that you believe will kind of support the growth or to make sure that a flat or a negative US market for FY27, and still we kind of do double-digit growth.

If that happens, what is the second-order impact on the margins, because US, I would assume, is a higher-margin business, right? If you can talk about these two aspects, it would be really helpful.

Going forward, the next year, we expect little growth coming from the US and not the negative growth. We are working on many different fronts.

At the same time, when we go into the Indian areas, we are working on different avenues, different markets we are opening. The last year, we worked on many different areas, and probably all the growth will come from all the three segments, including human nutraceutical, food, and animal feed.

We expect a healthy growth this year from Indian space as well.

Sure. Is it fair to assume that you would be able to hold on to the margins or, as we've seen in FY26, or because of some pressures and cost pressures in US, this could be an impact on margins?

I won't say that too much of impact. 1% or 2% is always possible, and that's a variability what we have.

I wouldn't like to get into the nitty-gritty of it. Maybe Rauka can explain.

If you ask me, more or less, we will go with the same margins, and that's what our assumption is. Rauka can give more focus on the margins exactly what are the numbers saying.

Raukaji?

Okay. Perfect.

Thank you so much.

You're welcome.

Yeah. Thank you for the opportunity.

My first question is on our US business. If I look at the revenue for this quarter, it is down some 11% in INR terms.

Now given the depreciation of the INR in dollar terms, the decline must have been a lot more sharper, to speak. Just wanted to get a sense on what exactly is happening there, because I think now with the tariffs behind as well, we were expecting a recovery in this business.

That has somehow not shown up in the numbers. Just wanted to get a sense of what exactly is going on, and is it time for us to rethink our strategy in US and probably change the way we're working there?

Rajas, the market is changing in US quite a bit. There is more concentration on the deliverable, registration, the studies, et cetera.

On US strategy changing accordingly. Market is, as we said before, also very challenging.

We are making very good inroads with the registration in the regulatory areas as well as in the market segments, okay? It is going to be as I said before, very challenging here.

We are expecting to grow in US market also.

Thanks for the answer, sir. My second question would be on our India business.

This quarter has seen significant increase in sales of about 50%, and the year has also been good for us in India. Serra obviously, I think there was an earlier mention of Serra volumes going up.

Outside of Serra, any other products that you would like to call out or any other segment that you would like to possibly call out that has done well for us in India, both in this quarter and for the year as well? If you could please also call out your biocatalysis revenue for Q4 and for the full year as well, please?

Revenue Rauka can tell you what exactly the revenue is, but going forward, we do expect a good growth to come from the biocatalysts as well in Indian market. I would like to mention that not only the pharma, but this year we grew very well in the food area as well as in the animal feed area.

Even our specialty business grew very well, and we expect that this momentum to continue going forward as well. If you want a specific biocatalyst numbers, probably Rauka can give you.

Going forward, we do expect a good growth coming from those areas as well.

Understood, sir.

And I think you wanted the numbers, right?

Yes, please.

₹247 million and for the FY26, yes, and last year it was ₹174 million.

Understood, sir. Thanks a lot.

My next question would be on our R&D pipeline. Outside of Serra, which you've already spoken about, the European filing, any other products that are there in the pipeline for us, which are gaining good traction or are expected to launch soon in this year or the year after that, which you would like to highlight?

See,

this is a continuous process. We are working on many projects.

As we were talking, coming this year, probably in the second half, our R&D new facility should be operational, and after that, we should be able to work on more different products. Because of the competition of the nature, I don't want to now going forward specify the individual products, because that just creates the pressure on the products.

Going forward, I will not like to mention the exact product, but we are working on many different products. That's what I would like to say.

Understood, sir. It seems like the company has turned around in FY26 after a difficult FY25.

Apart from the revenue outlook which you shared, as the nature of our revenue in some sense also kind of become more long-term or recurring than it was earlier, is the quality of revenue increased, to speak?

Quality of revenue is extremely well and very stable.

Understood, sir. Understood.

Got it. Last question on capital allocation, I think one of the earlier participants also asked a question on this.

Looking at our balance sheet, we have around 700 crores of cash, and despite that, we have canceled the interim dividend. Just wanted to get some thoughts on your thought process regarding that.

That's again as I will say that these are board decisions which board always evaluate from time to time on how to enhance the shareholders value via different modes and methods as you guys know very well. We are always as a company board members are always looking to see how we can benefit this to our shareholders.

Understood, sir. A broader question on the fermentation space, to speak.

This would be my last question. There are a couple of peers who have now entered, let's say, emerging areas like non-meat based proteins, which are also manufactured using fermentation itself.

Those segments also have good growth potential and healthy margin profile as well. Just wanted to get a sense on how we are looking at some of these adjacent areas, and are we considering these areas for future expansion as well?

Rajas, protein overall category is a growth category, as you all know very well, okay? Non-meat protein is taking some traction as we understand it, and we are continuously working on various different areas to see how we can take the advantage of it in a whole segment.

Not only non-meat protein area, but all entire protein area, to speak. Yes, it is a very interesting area, and obviously, we are always looking into all these growth areas.

All right. Thanks a lot, sir, and wishing you all the very best.

Thank you. Thank you so much, Rajas.

Hello. Good morning.

Am I audible?

Yeah.

Thank you.

Good morning.

Congrats on a good set of numbers for the quarter and a year as a whole. Now, my broader question is, sir, if we look at our growth trajectory in the past since listing, there have been periods when we had very strong growth, then there was a period when the growth would come down to single digit.

This time, it seems you are more confident on the sustain. What are the factors or what we have done differently from the past which gives you confidence that this growth momentum can sustain?

In similar spirit, if we look at it, in this time the growth even for the year has been more broad-based, like human nutrition has grown, animal nutrition has grown. If you can just talk about what at a company level we have done differently or what changes we have done over the last 2 years, where we are seeing this broader growth versus segmental growth which used to happen earlier?

Sure, Nikhil. It's a very good question, and thank you for asking that.

As you can see, the growth is broader. What what it was is we have to focus on the areas which we want to grow, and initially also from the beginning, we are telling that we have changed the focus on not running after every single thing, but focused on the areas which we are very good at, and we wanted to grow.

It has to be come supplemented with a lot of research, and not necessarily just a commodity product, or me-too products. Which we made a lot of changes in that particular segment.

Our outlook is more broad-based and long-term rather than a short-term margins. What you see is that results, the cumulative culminative efforts for for some years now that it is it is paying off this year in spite of a lot of challenges in the global marketplace.

Okay? Our outlook is a global now.

It is not a segmented outlook only. We look at the entire region.

World is very fast. It's a It's now coming to be AI world in the very shortly, and as you can see it, we need to be very rapid and very broad-based and deeper rather than a commodity.

Those are the kind of changes we are making we made actually and continue to make. As as I mentioned that also in my opening remarks, that within next 6 months, this quarter this year fiscal year, will be operational into our R&D center, which is one of the largest research-based center in in our area so far that I know of, you know?

We we are going for innovations, as our PM says, rather than just just service industry. That is what you can see.

It's a lot of registration, a lot of a lot of papers, a lot of research, and we are spending substantial and committed to spend substantial amount of our earnings into the R&D sector. Does that make any Does that give you answers to your question?

Sir. It gives a comprehensive view.

I would just want to understand one more point, because when we go for a more comprehensive and in-depth entrance with the customer or entrancement and more innovation, there are two aspects which probably can throw light. One is with our existing customers, say, which were present 3 years back, today, what quantum of business we would have increased with them?

Secondly, if we look at the growth beyond our top 10 customers, how would that be?

You will find that our top 10 customers will be very much evolving and expanding, okay? That is because of what I said it before.

We are very keen on increasing our share of revenues from the existing customers also, which they have already established for so many years. There is a lot of changes globally happening right now, as you are very well aware, Nikhil, and obviously, a lot of companies are looking at us also into the different angle, different perspective.

It is an exciting, even though challenging time. We feel very confident that this really with a lot of work which we have done in last several years is taking a deep root into it.

Sure, sir. Thanks.

Just two questions. One is, sir, see, today, we are almost a ₹750 crore, ₹800 crore kind of a top line company.

When we today go to a new customer, the kind of discussions which they are having with us versus when we were a smaller company, say, 5 or 7 years back, today, the kind of projects which we are getting, are they more innovation-driven or is it more of a second supplier source kind of a replacement which we are doing? How would you define the kind of work on the R&D we are doing?

Is it more newer products and even the companies are open to give them to us, or is there still some skepticism?

Okay. You are asking very good questions.

Both. Again, I will answer you, both, because new companies, quite a few new companies are approaching us.

Old companies are, or those companies which are established, are checking us out kind of thing. Yes, we are working on both.

One is we need to continue on getting the revenues from the existing or these new sources which are just cost-driven. At the same time, we have to establish the new markets with our innovations, which is little deep-rooted.

The strategies are combination of both.

Okay. Last question, see, 2 or 3 years back, if we go back to our call, one of the idea which we had was that this is a business which is driven by volumes, and volumes will provide us operating leverage.

Now even from, and I'm taking a base post-COVID, when we were at 530 crores, today, we are at 750 crores. It seems we have sacrificed some bit on the gross margin, because gross margins have come down from 75 to 70.

May not be a sacrifice. The operating leverage has not played out the way we had thought or we as investors had thought that as volumes will come, operating leverage will play out.

Is there something wrong with the understanding of the business or is it a sacrifice which we have said that we are okay doing business at 30% margins, but let's focus on getting more customer traction? What have we chosen between the two?

More customer tractions.

Sure, sir. Which means that margins should remain in this level, and operating leverage would probably provide it for more volume growth, we would look at?

Yeah. Yes.

Okay. Thanks a lot, sir.

I'll come back.

Thank you.

Yeah. Thank you.

Hope I'm audible, sir.

Yes, sir. Yes, you are, Mr.

Lakshminarayanan.

Sir, two questions. Sir, I noticed that Mr.

Roda is moving on, and he has been a big part of our management. I just wanted to understand how the organization is maintaining stability, and how the organization is actually moving forward, and whether any next person has actually taken lead in that area?

Mukund, I cannot hear for your questions properly. Maybe you're a little too far.

No, I hear. I understand that Mr.

Deepak Roda, who has been part of our team for a long time, had decided to move on, and I just wanted to understand how that role has been smoothly transitioned and if any other person has been replaced and how he has been replaced also.

In an organization, of course, when somebody leaves such as Mr. Roda, who works for long time with the company as a part and becomes a part of the company, does hurt overall.

There is always a management, second-level management, then third-level management, who take care of it.

Okay. Has anyone been appointed in the same capacity of heading that key role he was in?

Lakshminarayanan, what we did is Mr. Roda was handling some part of Indian business and some part of US business.

We manage with two different heads at this point of time who are equally capable and the second line-up, and that's how we are going right now. I guess we should be able to do good.

We will not be having too much of difficulty going forward as well.

Sure. Mr.

Rathi, you always urge us to think the company on a longer term, not look at quarter, not look at year. If I just look at our US business from March '22 end to March '26 end, I see that there is a significant divergence from the performance which is down around 6% on Indian rupee terms, while the currency has actually also depreciated by 22%.

How does the management view this? Is it something which you anticipated or you're happy about?

How do you like to measure or how do you like us to look at your US business over a longer period, not necessarily a year or two, but slightly longer?

Overall, we always told you that it is a balanced business, a global business. It is export-driven business as well as local business.

Look, you have to keep and look at this in the same way. Nothing is changed.

One year, as I said, various things take little time to deep root, and that is what we're doing right now. Globally, not only in US market, but global markets, all over.

It is just like somebody said, when one door closes, some other door opens.

If I just engage on that further, sir, how do you like us to look at the US business perspective? Because that's a business where it's very dear to you, and you're putting all your efforts to expand that business.

How do you think we should look at it, and how you are looking at it over a longer period? I'm not looking at a year, but slightly longer.

It's going to be a growth business as usual. Our business is a growth business, and US business, you should be looking at long-term, steady growth business.

Okay?

Got it. The third question is that from the Serra business, right?

How much that did contribute for the full year and what has been the year-on-year growth? As a follow-up on that business, I see that the competition is little muted, if I can understand.

Can you just tell me how are you thinking about competitive intensity in the Serra business? I think two parts of the question.

One is what has been the contribution of Serra for the full year and with respect to last year? How is the competitive intensity, because I understand that one of the competitors is not selling the product.

Beni, you want to answer on that one? Mukund?

Yeah. As Mukund was mentioning, I think this is the last time we will be sharing this number.

This is Serra. I think we have on YTD growth about 45%, and Q-on-Q is about 54% growth.

I think you will all appreciate because there is always kind of a lot of pressure this is created by competitor and all that. We'll restrict that.

Okay. Thank you so much.

Hi. Good morning, sir.

I had a couple of questions. The first one is on the biocatalysis.

A few calls ago, we had mentioned that there were some trials going on. Just wanted to get a sense of the overall business and any updates on that.

Mukund?

Sorry, I was on mute. At this point of time, I would like to say that we are working on few of the products.

Trials are going well, but won't be able to comment on the exact number right now. Next year, what we are looking at it is some moderate growth coming from this area.

Got it. Any estimate on when these would complete?

Because they've been going on as far as I know, 6 to 9 months already.

There are not one or two products. We are working on many different products.

In some of the products, you get some challenges, but I would still like to go and say that this year we expect some growth coming from this area. Whenever that will happen, that will be the quarter we are going to put it up as a different category, or we would like to comment on that.

As of now, I would say that this year we expect some growth coming from this area.

Got it. That's helpful.

Keep in mind that this is very, again, challenging area, I would say, because it also depends a lot on the government bodies regulations and global competition. Changes of processes, there are a lot of things, a lot of factors into this.

We still irrespective because of the several different product lines and trials going on, we expect, as Mukund says, moderate growth in this continuous growth on this market.

Got it. That's helpful.

The second question was on the gross margin. I think we alluded there was some extraordinary item this quarter.

If you could just expand on that, just trying to understand a little more.

Rauka? Yes, sir.

The gross margin is particularly driven by, product mix which the company have and the group have. Overall, if you see the domestic sales is kind of a higher as compared to total consolidated sales, which, in turn sometimes gives us the lesser margin.

On an overall basis, if you see on a year full-year basis, the gross margin is kind of, 1 percentage down because of product mix only.

He's talking about extraordinary.

Yeah.

No, he was asking about some extraordinary item. I think something was there in the last quarter which is not here right now.

Okay. In

the last quarter, that was there in quarter 3, right?

Quarter 3,

we had some exceptional item. That was I think one was related to

Reversal.

Reversal of some provision which we were carrying in our books for some litigation matter. That has come in our favor.

About I think 16 crore was the reversal. In addition to that, we have provided for the impact of the labor laws, because in India, you have seen that new labor laws have enacted.

Impact of those labor laws on our payroll cost, so that we have taken into account. This is I think pertaining to quarter 3 of this year.

Got it. Sir, my last question pertains to the R&D center.

We expect it to operationalize in the second half of the year. What kind of incremental expenses are we looking at in terms of percentage of R&D spends in terms of percentage and rupee spends?

Also, have we already started hiring for that? What is going to be the capacity for that?

How many people are we looking to hire over there?

Of course, the expenses are going to go up, but we'll try to maintain between whatever the current percentage what we are going on, because it also depends on the function of the sales. In terms of persons, some persons we already hired, some persons we are planning to shift from our existing R&D center, and some persons we are in a process to hire.

In terms of capacity, the capacity in a given time, it will take some more time to really come to the fullest utilization. We intend to increase in the first phase by the threefold of what current capacity what we have.

Okay.

It's a phased manner. Expansion will be in a phased-out manner.

Got it. That's helpful.

Are we looking to close down the other R&D centers, because you said we're moving people?

No, we will not close it. Those will continue.

At the same time, some people we move from here. We will be going with a lot of modern machineries out there so that the people requirement will be lesser, but we can get higher output out there.

Okay. Got it.

In absolute term, the R&D revenue expenditure is likely to go up by ₹50 million, okay? CapEx is definitely, this is going on.

That will be again additional, I think, 50 crores we will be spending this year. I think overall CapEx on R&D will be about 130 million 130 crore, 130 crores.

I think

we have already spent 50. We are going to spend during this year.

Got it. Okay.

What would be our current utilization? Are we looking to do any kind of capacity expansion?

I know we just do incremental and we find efficiencies, but anything as we are increasing sales, are we going to need more capacities or are we okay with this, yeah?

In the main company, we will be taking that call after September. As of now, we do have our preparation on the ground so that whenever we want to go, we can go very quickly, rapidly.

The infrastructure built-up is done. We may look into some capacity increment in one of the subsidiary company this year.

Those are the plans as of now.

Got it. That's very helpful.

That's all from my end. Thank you, and good luck.

Thank you.

Thank you.

Hi, team. Good to see the company evolve from a domestic enzyme manufacturer to an integrated specialty biosolution platform.

I think this is where the alpha lies. Many congrats on this one of the strongest quarter that you all have delivered.

Thank you.

Yes, sir. Sir, I have a few questions.

While you're becoming a global innovator in this biomanufacturing platform with certain moats that you have, and we also see this small CWIP or some sort of expansion that is happening. If you can take us through that, this fermentation capacity that we have of around 500 500 kind of a metric cube, a meter cube capacity, by when do you think that the next round of expansion should come through?

That's what I said. We might look some capacity expansion in one of our subsidiary company, and we will take the call in the month of September when we should really increase.

That's as of now currently stand. We do have infrastructure to increase the capacity increment by 50% right away.

Okay? We'll take the call as we move forward in this year.

Kabraji, what would be the peak revenue that we get from this capacity currently?

It's very difficult to say, because, Rohit, it's like always the product mix, how it's moving, what are the different areas which are moving. As I was saying, like there is a constant improvement in the productivity.

It's a it's a lot of blending game. Even like I I mentioned earlier as well, like this year we could increase some of the products' output to maintain the pressure on the pricing.

These are all the blended. Like it's very difficult to say exact revenue.

Okay. Sir, on the working capital, we see some stress over there in the inventory.

Is it because of the demand or is it some new client that you all are onboarding or maybe just stocking because of the pricing in the industry?

It's not only the pricing, but it's because of the uncertainties of supply chain and other thing when you never know what will happen tomorrow. You don't want to get stocked out for the raw materials in other areas and you should be able to deliver, because it's a game of your logistics, delivery.

Sometimes you need to build up the inventories to manage all the changing global environments.

On the receivable side, is it because of stronger sales or are we giving some higher credit to some of the clients or customers?

The things are more or less same. Rauka can put some more lights on the number.

I don't see there is a much of difference on the strategy front.

Okay. Sir, on the competitive positioning, while Rathi, sir, also mentioned that this year could be a little bit of a challenging on the international front, how do you see or what are the things that generally the customer looks at while they are trying to choose AETL over Novozymes and/or Hansen?

What are the cost advantages that we generally see, and why would they prefer us while we might compare with some of the European players or maybe some other players in China who could be having better margins or maybe defensive margins as compared to us?

The time is always challenging. It's a very good question.

The time is always challenging, and the challenging time always creates some opportunities. I always feel that the company like us gets more opportunity when the time is more challenging, because that's the time when everyone is in panic.

That's the only time the people start looking for the alternatives as well. If you are comfortable,

probably

you don't look into it. Mama.

Also one more thing you have to remember that we are not a company which is just came up in last few years. It has a tremendous track record of last 30, 40 years, right?

That all counts. That is because ultimately, people has to trust you that you can deliver.

Okay. Makes sense, Rathi, sir.

My last two questions is, if you can take us through what are the developments which are happening with Scitech, which was recently having some corporate developments happening over there?

It has been just being established completely independently, and I think this coming year will be the first year for the Scitech as its independent company. The response is pretty good.

Anything on the numbers that you'd like to share on the top line?

No, there is nothing. It is just a starting, there is not much of a numbers game right now.

Rohit, I would say that we are not really looking for the numbers, but it's more like a strategic fit as well to expand the US market as well, right? It's more like a strategy rather than the exactly number, and we are not really looking for a too big numbers to come up in just near terms.

Okay. Last one, if you have the number handy, maybe an approximate number to the revenue which could be coming from the products which are launched in the last 3 years or so?

Good questions. We will have to calculate, Rohit.

There will be some good number as well, because we don't separate it out that way. Yeah.

It is not, as we have do a lot of combination products, lot of very proprietary products, and it's not possible at sometimes to just say this is more or this is less kind of thing. We have a broad range of enzymes, and they have their own function, and it is just create a very unique formulation for the industry.

Rathi, sir, a ballpark number, maybe 10% or maybe 15%. That is what I was looking at.

The growth, you can see whenever you take out one individual product which you all know, and rest of them is all like that. We are very much as a what you call it, proprietary enzyme product kind of company.

Okay. Rathi, sir, Kabra, thanks for answering my question.

Thanks a lot.

Oh, pleasure.

Thank you.

Anytime.

Thanks for the opportunity. Any update on where we are in terms of the US tariffs, discussion with the customers?

Are they still on the back foot? What's the scene there?

Ashish, thank you for asking this question. There is everyday a new drama.

The customers are always asking when they can get the refund back, and we are asking the government when we can get the refund back, and so on and so forth. Let's play the tune and see what happens, whether the Congress in US Congress acts on it or don't acts on it.

There is a lot of drama going on with the court and politicians and the business. People more or less understood that there is a reality of this, and prices in the marketplace is going up.

Inflation is really hitting up here also in the US, not only in energy, but all the sector, food sector, supplement sector, all supply lines, okay? We just have a challenge how we can pass on this cost to the customers.

As of now, we are still absorbing 10-odd percentage cost, right, from the tariff?

To a certain extent, yes. It is a gradual process to pass it on and to explain.

That's a process. You cannot just pass on everything to the customer and lose the market share.

At 18% tariff, we would not be very competitive, right, versus the competition?

It's a competitive market. When you get into ingredients and when their cost goes up, the market is very different, how many times they have to increase that to make their sales and then that becomes whether the consumer can afford it or not is another issue which they have to face.

What will impact for them, because it's a B2B market, nah?

So. Right.

Sir, lastly, on this chemistries, since we are also on the peptide enzymes and peptidases and finding a lot of relevance globally, what is the opportunities that we are seeing in these chemistries, and if you could help us highlight what are the new chemistries that you guys are targeting?

It's a very interesting opportunities. We will try to explore it also.

Since we are in a protein area and enzymes, proteins go hand in hand, and peptides are also part of it. Very interesting areas, and we are exploring all various different possibilities.

Great. Thanks, and all the best.

Thank you.

Hi, sir. Congrats on the great performance.

Am I audible?

Great. Sir, I have two questions.

Sir, first was if you could give the break-up between India and international business in the human nutrition segment?

What is the question? The break-up of the India and international business.

Yes.

Rauka?

Beni?

Yes, I'm giving that information.

Sir, meanwhile, the second question was if you can help me understand was there any one-time component in the India revenues of Q4, any sort of pre-booking or pre-buying by customers or something?

No, there is no that kind of revenue. It's not a one-time revenue.

Okay. Sure, sir.

Sir, one last question was that with our India R&D coming in, would we be freeing up some capacity in Evox to make it more customer-facing or would Evox continue doing R&D for us?

Evox will continue doing R&D.

Yeah. Okay.

Sure, sir.

Umang?

Yes, sir.

32% of our business has come from India. I'm talking about human nutrition business.

Of total revenue, 32% from India domestic market and 30% has come from international market. Total is 63% contribution of human nutrition business in our total revenue for FY26.

It's a balance. Basically,

both sides. Absolutely, sir.

It's 32% and Yeah, got it. 30%.

Yeah.

Yes. Got it.

Thank you so much, sir. Yeah.

Thank you.

Thank you, Umang.

Thank you so much for the opportunity. Sir, congratulations on a good performance for the whole year.

Indeed a good growth that we have achieved. Sir, my first question is with respect to the patents, the numbers that you publish every quarter in your presentation, I saw that the number has gone down from 17 to 15.

Could you just throw some light on that, sir? Why has the number of patents reduced?

Some of the patents which were not giving the revenue or we thought that is not significant, we have cut down from the list. We filed two or three, I need to see the exact numbers, which we got granted this year as well.

Few of the old patents which we thought are not contributing to the revenue, we are not focusing on them.

Understood. Thank you so much for that.

My other question is, sir, when I look at your segmental performance, of course, it's a very good growth on all segments, human nutrition, animal nutrition, and so forth. When we look at the geographic this thing, and of course, the US market has been much discussed in the call earlier, but my question is with respect to a bit long-term going in the past, even if I see 4 or 5 years, right from starting 2021 onwards, our US business has not kind of grown significantly.

If you could help us understand what kind of business are we doing there and you of course mentioned about the competitive landscape being a bit tougher there. If you could throw some more light on what kind of business it is and what kind of challenges that we face, that would help us understand the US business better.

Most of our US business is in nutraceutical market. We do various different industrial segments in food area and so on, but most of the business is in nutraceutical market, okay?

Nutraceutical market is under tremendous churn right now in last few years, changing the face of it and changing the habits of the people. As you can see, last few years, now probiotics is one of the major market segment.

Yeah.

US market is always a changing with the new habits, and then rest of the global catch-up is there. This is always going to be like that, but market is growing in various different segments, and we need to catch up that rising trend, and that's what we're doing.

Right. Sir, my next question was also with respect to probiotics, which you just touched upon.

If I look at the presentation, you've given a segmental revenue also for the probiotics, which has significantly reduced from last year. Again, if you could help us understand why we see probiotics is a growth segment for us and our revenue contribution in that segment is a very small one, and the addressable market is a significant one.

Ketan, what happened there is what we used to or what we are currently as well reporting the revenue are the individual, which was a kind of what I would say is a commodity market. Now the approach is changed and we are making a lot of different solutions using the probiotics, which are not really reflecting into the exact numbers, because it is very difficult to segregate them, because it's always being not utilized as an individual product.

The probiotics is used very widely in our lot of US formulations, but you won't be able to separate it out exactly. The numbers what you are looking at it is going down or going up is a individual probiotics for US selling, and those are more like a commodity segments.

I can assure you that our probiotic business is very strong.

Sure, sir. Thank you for answering all questions, and wish you all the best.

Thank you so much.

Thank you.

Thank you, everyone, for taking your valuable time for attending our earnings conference call. We will keep you all posted for any further updates.

I request you all to kindly send in your further questions that may remain unanswered. Audio recording and the transcript of this call will be uploaded on our website in the due course.

Looking forward to host you all in the next quarter. Till then, stay healthy, stay safe.

Thank you.

Thank you.

Thank you, everyone.

Thank you, everybody.