Advanced Enzyme Technologies Q2 Review — Expects Recovery From FY23: Nirmal Bang
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Nirmal Bang Report
Advaned Enzyme Technologies Ltd.’s Q2 FY22 Ebitda came in ~24% below our estimate on account of lower revenue growth and overall margin pressure.
Management indicated that growth was affected by raw material inflation and unavailability of raw materials, logistics and other supply chain issues.
In select cases, Advanced Enzyme witnessed inventory pile-up at both company level as well as clients’ end. Overall inventory (raw material plus finished goods) has gone up from 68 days of sales to 80 days.
While there is no clear answer as to when these supply chain issues are likely to get resolved, management indicated that the recovery is expected from FY23 onwards.
Accordingly, we have cut our estimates to an extent and now building in revenue/Ebitda/adjusted profit after tax compound annual growth rate of 14%/13%/15% over FY21-24E.
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