Advanced Enzyme Technologies Ltd (NSE: ADVENZYMES) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Ronak Saraf — Investor Relations
Mukund Kabra — Whole time Director
Beni Prasad Rauka — Group Chief Financial Officer
Vasant Rathi — Chairperson
Analysts:
Unidentified Participant
Shubham Sehgal — Analyst
Umang Shah — Analyst
Ravi Purohit — Analyst
Shreyans Gathani — Analyst
Rajas Joshi — Analyst
Presentation:
Mukund Kabra — Whole time Director
Ladies and gentlemen, good day and welcome to the Advanced Enzyme Technologies Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this call is being recorded with this. I now hand the conference over to Mr. Ronak Saraf, investor Relation Manager for opening comments. Thank you. And over to you sir.
Ronak Saraf — Investor Relations
Thank you. Good evening everyone. Welcome to the Advanced Enzyme Technologies Q1 and FYI 26 earnings conference call. We hope you have gone through our financials press release and PPT which has been posted in the investigation section of our website. We have with us Mr. Vasant Rathi, Chairperson, Mr. Mukund Kadra, full time Director and Mr. Beni Rauka, Group CFO. Today the management will discuss the performance and business highlights, update on strategies and respond to any questions that you may have. As is usual for the use of discussion, we will look at the consolidated financials. Before we start, I would like to draw your attention to the fact that some of the information shared during this call, particularly our plan, 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, changing 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 of 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.
Without any further ado, we shall commence this call. Over to you Yanja.
Mukund Kabra — Whole time Director
Thank you Ronak. Good evening everyone. I really appreciate you all for taking out your valuable time and extend a heartiest welcome to everyone joining us today. The conference call for the quarter ended 30 June 2025. I’m happy to report that fiscal year 2026 has started on a healthy note. Despite the geopolitical tension and economical challenges, the global economy outlook is improving. Inflation also appears to be well managed. Coming to the performance of this company reported an overall improvement on year on year basis. Growth was witnessed across all business segments in which we operate. The improvement in the top line was primarily driven by Robust performance in the human health care business as well as continued momentum in the animal healthcare segment.
We also observed an improvement in our B2C revenue in USA. On the operational front, the raw material projects remained stable during the quarter we have clocked highest ever quarterly revenue. Our top line for the quarter stood at 185.9 crores or 1859 million reflecting a 20% year on year growth and 11% increase compared to the previous quarter. EBITDA came at 564 million which is 10% increase year on year and 24% rise quarter on quarter. Our EBITDA margin for the quarter stood at 30%. Moving to profitability, our profit of a tax reached 404 million, registered 16% growth year on year and impressed 51% increase quarter on quarter.
The PAC margin stood at 22% for the quarter. Now I will take you through our segment wise revenue performance for the first quarter of FY26 and compare it with both year on year and sequentially with the quarter FY25 and quarter one FY25. Let’s begin with the Human Healthcare our largest segment revenue for quarter one FY26 stood at 1,221 million marking a 21% year on year growth and 19% quarter on quarter increase. This strong performance is an account of good demand in pharma AP sector. Human Healthcare remains the core of our portfolio contributing 65% of our total revenue.
Next we have Animal healthcare revenue rose to 260 million reflecting 51% increase year on year and 24% growth quarter on quarter. This improvement is due to increased traction in the domestic and Asian markets. Animal Healthcare now accounts for 14% of our total revenue. Turning to bioprocessing, this segment recorded revenue of 236 million while there was 6% decline year on year and a 15% sequential drop. We believe that this is a temporary dig. The food business degrew by 11% on year on year basis and 24% on Q& Q basis. The non food business grew by 11% on year on year basis and 28% on the Q on Q basis.
The segments still contribute a notable 13% to the overall business. Lastly in specialized manufacturing we reported 142 million in Q1 FY revenue up 29% year on year. Although slightly down 8% quarter on quarter, this segment represents 7% of our overall revenue. We have taken a step forward in our Clean Energy Sustainability initiative. One of our subsidiaries, JC Biotech is collaborating with Rayrac Solar Power Systems These moves aim to meet our electricity requirements through solar energy in a cost effective and sustainable manner with a long term perspective. Additionally, we have established a new subsidiary Advanced Neutral Zyne Private Limited which will focus on the sales and distribution of company’s nutrition and wellness product range.
We anticipate this growth trajectory continues in all our segments. In coming times we will bring more resilience in our business to enhance long term sustainability value proposition for all our stakeholders. Going ahead with this, I will now hand over the call to Raukaji. He will walk you through the financials and key subsidiary numbers.
Beni Prasad Rauka — Group Chief Financial Officer
Thank you very much sir. Good evening everyone. I hope you all are in good health doing well. The Financial Performance on consolidated basis for the first quarter of fiscal 2026 on year on year basis our revenue increased by 20% from 1545 million to rupees 1859 million. Our EBITDA increased by 10% from rupees 512 million to rupees 564 million which is about 30% of our sales. Profit before tax increased by 13% from rupees 487 million to rupees 549 million. Profit after tax increased by 16% from 350 million to rupees 404 million which is about 22% of our sales.
On sequential basis. Q on Q Revenue increased by 11% from 1,672 million to 1,859 million. EBITDA increase by 24% from rupees 456 million to rupees 564 million. Profit before tax increase by 26% from 435 million to Rs. 549 million. Profit after tax increased by 51% from Rs. 267 million 404 million. Regarding our subsidiary numbers, JC Biotech revenue stood at rupees 211 million, EBITDA of 33 million and PAT of 14 million during the quarter as compared to rupees 159 million, 24 million and 7 million respectively. Evoke stood at rupees 70 million with EBITDA of 14 million and PAT of rupees 7 million during the quarter as compared to Rupees 47 million.
A negative EBITDA of 7 million and PAT negative of 15 million respectively during the corresponding quarter of Q of FY25. Sitex sells stood at rupees 145 million with EBITDA of 4 million and negative PAT of 8 million during the quarter as compared to the top line of 111 million 22 million and 10 million respectively in Q1 of FY25. Our largest product which is anti inflammatory enzyme stood at the sales stood at 417 million about 22% of our top line during quarter one as compared to 18% in Q4 and Q1 of last year. Also 18% top 10 customers contributed about 27% during the quarter as compared to 23% in Q1 of FY25.
For financial year 25 it was about 22%. B2C segment has contributed about 1.28 million during the quarter as compared to 0.95 million during Q1 of last year. Let me also give you human health and nutrition revenue breakup. So our Pharma business stood at 593 million during the quarter as compared to 377 and 375. Probiotic about 10 million as compared to 14 million and 39 million. Biocatalysis about 66 million as compared to 7 million and 74 million. Our international business from human nutrition was about 562 million as compared to 633 and 523 in Q1. So total human healthcare segment is about 1221 million as compared to 1020 in Q4 and 1011 million in Q1 of FY25.
Our R&D spending is about 86 million during this quarter as compared to 76 million in Q1 of last year. We have spent about 5% of our consolidated revenue on research and development. This excludes our intercompany elimination and net of intercompany elimination we have spent about 3% of our consolidated revenue on research and development. That was from my side. Now we open the floor for question and answer session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Shubham Sehgal from Simpl. Please go ahead.
Shubham Sehgal
Hello, I’m audible.
operator
Yes sir, you’re audible. Please go ahead.
Shubham Sehgal
Yeah, my first question was so what led to high growth in our animal and human nutrition segment?
Ronak Saraf
Yeah, so Shailesheek, it’s all the product mixes. It’s not just like one or two or fewer but it’s like overall product and some of the export as well as some of the domestic market, the projects which we are working from last one year or two years in the export market, they started getting materialized. So it’s overall growth rather than just one or two products. Sustaining. Well, it seems to be like as we were talking about it, but the things are like very. I cannot like comment on the how the things will pan out in the coming days, but as of now, the way we look at it, this is more or less sustainable. Did I answer your question?
Shubham Sehgal
Shubanji? Hello? Yeah, sorry. Yeah. My second question was that in the previous quarter we mentioned that the gross margins were mainly lower due to the throw up of inventory valuation that we did. And we had stated that like going forward we will maintain our gross margins in the range of 76 to 77%. But again this quarter, if you see we have seen lower gross margins. So what would be the reason for this and make any outlook going forward?
Beni Prasad Rauka
I think Shubham, you are connecting the one off adjustment for Q1 in FY25. That’s what I think. We have spoke earlier, but I think the gross margin is likely. The gross contribution, that is what we say generally remains to be about 72 to 70, 73% in that range.
Shubham Sehgal
Okay, okay. My next question was so like on our main products, so any price impact, Are we seeing any price impact and how many houses are attending now?
Ronak Saraf
Well, there, there is somewhat like price impact, but what we can say is this quarter there was little bit on a higher side on the sale front. But overall that is not the only one product which we are focusing right now. We are focusing on many other areas including the other products as well as like the biocatalyst and other areas as well.
Shubham Sehgal
Okay, so as you mentioned the biocatalyst, have we started any commercial work as of now with the API manufacturers? So as we in our annual report also we mentioned that we are in the advanced trial phases, but have we moved to the commercial work and in general shift in the industry from chemicals to enzymes? How far along are we already seeing this shift unfold?
Ronak Saraf
To give you the specific answer, there is like some sales in this quarter on that front, but that is still smaller on the smaller side. We are working on it, but some of the commercial sales started in this quarter.
Shubham Sehgal
Okay, how well are we pleased to take the advantage of this shift? What engagements?
Ronak Saraf
I think it takes another one or two quarters to really come out with the answers on this front. As of now we are well placed. That’s all what I can say.
Shubham Sehgal
On the market end we are seeing the shift happen around that if you could just give some color.
Ronak Saraf
There are lot of factors which are still like we need to evaluate how the pharma market comes up. How is the US tariff on pharma and other areas moves because those are very, very important factors. You cannot just decide on one or two like where you stand. But you need to look into the global picture and how the things will pan out. So as of now it’s very, very murky situations and I think we need to give some more one or two quarter time to really come out the things.
Shubham Sehgal
Okay, okay, got it. And as you mentioned tariffs, the new tariffs which were mentioned like what kind of bad could we see because of.
Mukund Kabra
Yeah, you know that answer very well. So of course it, it impacts everything.
Shubham Sehgal
Sure. Hello. Yes.
Mukund Kabra
Yeah, it’s a global market. We are in a global market. So it is going to impact everywhere.
Shubham Sehgal
Okay, but like will we see some because we have manufacturing in US as well.
Ronak Saraf
The way we look at it is like I can talk only on the direct indirect things. How it will pan out is very difficult to predict as of now. But if you really talk about direct, probably like our export is in the tune of to the US is about 50 crore or so. So we might have like about 12, 12 and a half crore impact. But again it again depends. That’s the worst scenario to look at it Again it depends how the Europe and Japan and other countries tariffs comes up and how the players in the market plays their role and we can come out after that with the exact impact.
Shubham Sehgal
Okay, got it. I’ll get back in the queue. Thank you.
operator
Thank you. The next question comes from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.
Umang Shah
Hi sir. Am I audible?
operator
Yes, yes sir.
Umang Shah
Thank you for. Thank you for the opportunity sir. The first question was our gross margins have always been above 75% for the long time in our history. But over last two quarters they have come to around 72%, 73%. Last quarter there was some issue with the largest product that we had. Are understanding sir, what has happened in this quarter and for the full year. What are the rough margins that you’re working with.
Beni Prasad Rauka
So this is like you know, impact of some change in the product mix. And apart from that some impact is also because as even in the first quarter if you really see that some tariff has already been imposed in the usa. So to some extent I think the impact is here again on the gross contribution. And when we talk about the Q4, I think that was mainly, I think we already spoke about trimming up of the valuation of the inventory. So there was kind of some impact of that also going forward. Gross margin would be anywhere between 73 to 75%.
That’s what is the range. I think we can look at it. This is, I think those contribution I’m talking about because of you know some impact will also be there from the tariff as of now. This is what we are looking at it. But as like you know things will, you know you, you will get some kind of a certainty as you move forward.
Umang Shah
Right sir. Got it. Thank you sir. And sir, in the Q4 call Mukun sir was quite excited about, quite optimistic about this year’s growth. He had mentioned mid double digit growth for this year. Do we continue to hold on to that or has there been any change of course? Tariff and everything is a bit of uncertainty but assuming that everything remains same.
Ronak Saraf
So assuming everything remains same. So we are still like optimistic and we still feel that we should be able to maintain our guidance.
Umang Shah
Got it sir. Thank you so much sir. And just sir, one additional question was if you just look at human nutrition India business we were able to get revenues of 66 crores in this quarter which is one of the highest that we’ve actually achieved. So one of course is the resurgence of the largest product that we have. Anything else that you would like to call out in terms of how is India business in human nutrition doing so well?
Ronak Saraf
So as I said like it’s a. Overall product, overall customer additions, overall like what we were working, we were working from the last one year or two years even into the Asian market and other areas as well. So it’s an impact of overall scenario, not just one area.
Umang Shah
Right sir. And sir, when are we estimating the new R and D subsidia to the commission?
Ronak Saraf
We expect in the last quarter of this year.
Umang Shah
Okay, okay, sure sir. Thank you so much. Thank you.
Ronak Saraf
Thank you.
operator
Thank you. The next question comes from the line of Abhishek from Padmaja Investments. Please go ahead.
Unidentified Participant
Yes. Am I audible sir? Yeah. My question one is on what is the current tariff rate that we have? Maybe the same across all our products or not.
Ronak Saraf
For the last quarter it was 10%. As of now we don’t know. And the more clarity will emerge as we move on.
Unidentified Participant
Okay, my second is are we planning for more inventory in US in the.
Ronak Saraf
Last quarter we did like some additional inventory already.
Mukund Kabra
Abhishek, we are already in the tariff. There is things right now you cannot add any inventories now at a lower cost.
Unidentified Participant
Okay, okay, okay. Okay. Yeah, I got it. And my Second and my last question.
Mukund Kabra
That was a question six months ago.
Unidentified Participant
Sorry sir, I. I didn’t write it.
Ronak Saraf
Sorry sir, I wish you mean to say that that was a more. I mean like we should have answered that question six months before because that time there was no tariff. Right? So. Okay. Yes. But some of like the corrections we did in the last quarter and provided like we will wait and watch for another one quarter and then we’ll see how to move forward.
Unidentified Participant
Okay. On the animal nutrition part, like there was a big jump this quarter. Is there anything that has worked? Like, do you want to comment on that?
Mukund Kabra
Again, the same thing. It’s like the overall growth, what I would say including like domestic market as well as like the export market. Whatever the projects we are working from last one year or two years, few of them started getting materialized. Some of them are prompting out, giving some results now.
Unidentified Participant
Okay, okay. And this is my last question, sir. So like how are the like competitors? Like are they trying to undercut us? Like are they also like price war kind of a scenario that might play out with the status? Like are you seeing any indications for that?
Mukund Kabra
Let me answer that question, Abhishek. You know that when the prices are going to go up, everybody understand that in the TER4, right? Yeah, yeah. In the business you got to find out where I can get a secondary source of supply at cheaper prices. So it is going to be always people are going to find some other trying to find alternatives. And naturally industries has to accommodate and adjust accordingly. There might be some pressures on the pricing. Of course you may not, you know, and the margins.
Unidentified Participant
Okay, okay, okay. So we are actually showing. In summary, can we say that we are actually taking up most of the tariff and rather than passing it to the consumer, consumer business party.
Mukund Kabra
I’m not saying anything of that nature. You had to readjust the businesses, see how we want to have a growth with the margins, right? Yeah, yeah, yeah. So it is, it is also what tariffs comes, which country is competing with you, etc, etc, not this. There is not a uniform brush to everyone. There are different tariffs for different countries and different people and industries and so on, so forth. So we are very, very mindful of it. I can tell you that. And management is very aware of how to. We see a lot of times this might be a good opportunities in a lot of different sectors.
Unidentified Participant
So if I can actually I have one last question sir. Like are any of our products coming Pharma market.
Mukund Kabra
Their neutral market, Pharma market. Both. Both the places it works.
Unidentified Participant
Okay. Because pharma is exempted right. As of now under sections 232. So I’m asking you this question.
Unidentified Speaker
Yeah, we are not in the pharma sector, but we do supply to pharma enzymes doesn’t come in the pharma.
Unidentified Participant
Okay, that’s also. Thank you a lot. All the best.
Mukund Kabra
Thank you. Thank you.
operator
Thank you. Before we move to the next participant, a reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Ravi Purohit from securities Investment Management Private Limited. Please go ahead.
Ravi Purohit
Yeah, hi, good afternoon gentlemen and congratulations on strong sales within this quarter. There’s a couple of things and I think you’ve already spoken about the various. Segments like human nutrition and animal nutrition. Which showed very strong growth this quarter. Can you just share your medium term outlook and strategy towards sustaining growth? Because growth has been a bit patchy over the last few years for us. So as an organization, what are the areas that we kind of are optimistic about? What are the areas where we have reasonably good pipeline visibility from our customers? Which of the segments kind of, you know, offer that opportunity if you could just show some light or something that we can, you know, kind of look forward to as investors right. Over the next, you know, few years?
Mukund Kabra
Ravi, this is an uncertain time at this point in time, but nothing has changed as far as we are concerned. In the company, we have particularly certain segments like health and human nutrition and animal nutrition. We see that our focus will be to expand that as much as we can and continue growth on this one area and keep on adding the other sectors which we are working on for some time. So the management is continuously trying to see that we keep a double digit growth and improve our competitiveness in the global market. And also walk through this.
Terry 4. We’ll see what happens. It will take three months, six months. Who knows, maybe tomorrow morning our president will grow, you know, wake up with the difference.
Ronak Saraf
But to add to that, Raviji, like most of the sales, this comes on an R and D basis and we are more R and D companies. And there will be some times like when there will be no growth and there will be some time there will be high growth. So you can’t just go on like quarter on quarter on the same segment wise or this wise. You had to analyze it overall. But yeah, over a longer run we need to grow with those spaces and that is what we plan. But sometimes there will be no growth as well like the last year, what we have.
Mukund Kabra
Right. Which is why I was asking what, you know, medium term, like Two to three years, not specific to this year or next year.
Mukund Kabra
So we should keep our momentum as we have got. Right.
Ravi Purohit
Okay. And so two other questions. One is we have set up this 100% subsidiary to kind of, you know, do our consumer products, so to speak at B2C price. So is there any thoughts that you can share? Is this JV being formed so that we can tie up with somebody else? Because we have historically been B2B company. I think I’ve asked this question earlier also on the call that we have been a B2B company and not necessarily a B2C company. And some of the products that we are which are currently available. I have tried a couple of products that well far through is in poor Slim or something like that.
Now there are a lot of these products on the Quick Commerce space and on Amazon, various other platforms and all these seem like quick commerce products. They don’t seem to be like modern day products. So. Is there any strategy or thought or how do you kind of. And I’m assuming some of the other products you must be supplying, you know, the raw material or maybe even helping them white label, you know, some of the products. So if you could just share your thoughts on that, it would be very helpful for us.
Mukund Kabra
Yeah, this segment is very startup segment for us. Right. As you know very well, we are looking at a global platform right now including There are B2C markets in US also we do for long time which is club total overall sales. But we are trying to see that this segment is given different attention because it is a very different segment than B2B and we have a good base now. Lot of good strategies are there which we wanted to expand that market and we’ll be working on that for next this year and to expand the market as much as we can.
Ravi Purohit
So is there idea to do it ourselves or let’s say, you know, we’ve seen lot of companies tie up with large pharma companies in India who have a very strong distribution network or even new companies who have very strong B2C platform where they already have a very strong distribution network. It’s only a question of actually supplying products in that. So if this 100% subsidy that we created.
Mukund Kabra
Ravi, we are right now expanding our distribution networks. Okay. Gradually so that it doesn’t impact, you know, that B2C business is lot of times losing business. You know, you have to put into distribution channels. So we will do so. And then right. Time comes, we’ll look into all other possibilities. There has to be some base needs to be developed.
Ravi Purohit
Okay, okay, okay. And the last question on Ewoks, right So we’ve had this acquisition for a fairly long period of time. I think over the years on the Concords we’ve mentioned that you should see Evox as more as a cost center from the point of view of doing cutting edge R and D and you know doing all of that work there. So and I think a few years back we had some tie up with Chinrise also to kind of do some co development on some products or something. So can you share some like how has Evox evolved over the last two, three years? Are there more tie ups that it is or are there more co developed products that is working on? Is there more flow of products or tech IP from them? Just a peep into Ewoks. We have absolutely no idea what happens in Ewoks so it would be great if you could share something.
Mukund Kabra
This is as mentioned before in your acknowledge this is an R and D company basically we have a very very good traction and going forward see we have an integrated approach of total research manufacturing and then converting into sales. So this will continue to happen. There is that is a foothold little bit in Europe and Europe is a fortress, difficult to penetrate sometimes feels like it. Our research wise we are very, very very happy and as soon as you see our R D centers get into the thing. Lot of, lot of contribution from this from the CS right now on our research.
Okay, okay.
Ronak Saraf
Cutting rate research. We’re doing very good research work in terms of contracts. Like there are like some, some of the contracts but this is an ongoing process and but you should always look at it as a revenue neutral or just a positive and we are not really looking at it as a major sales engine.
Ravi Purohit
Okay, those are all my questions. Thanks a lot and I’ll get back in the queue.
Ronak Saraf
Thank you. Thank you very much.
operator
Thank you. The next question comes from the line of Shreyansh Gatani from SG Securities. Please go ahead.
Shreyans Gathani
I had a few questions. So the first one was on the R and D expenditure for like the last couple of years we’ve been mentioning that we want to you know target higher R and D expenditure. But if I look at the numbers we’re not able to not got into what we were saying like even this quarter is like I think 3, 3% so just wanted to get some sense on that and like along with that you know the kind of product pipeline that you have intended to launch this year. If you could give some color on those two.
Beni Prasad Rauka
R&D spending. Shreya Here it does not include whatever amount we are spending on new R D setup. This is, you know, we are putting at nasiq. So so far those expenses we have not included in this RND expenditure because that’s under like you know, work in progress. We already spent about 48 crores. But that we have not included in our understanding so far. And about the product lines I think will give some flavor on that what exactly we are doing on RMD.
Mukund Kabra
So and what you, you mentioned 3% but that doesn’t include what we spend in the Inter company for example in Ewoks and other areas. So when we take account of that it’s more than 5% or we are. Somewhere between, between 5 to 6%. Right?
Ronak Saraf
Yeah. And what we were mentioning is it might go up by another 1% or somewhere as we move on when the new center will start. So that that is how it was the number which were coming from. Now as of the R D is concerned like we have all different types of R D and different products and it’s coming into all the sections. It’s not just like one area but some of the products are in the human nutraceutical, some of the products are into the food area and some products are in the biocatalyst as well as annual feed area.
So that’s all what I can say rather than going more specific onto it.
Mukund Kabra
Yeah, and you mentioned that we have some tie ups also there. They are slow taking off but the multinationals never know how their plans are.
Shreyans Gathani
Got it, got it. And second question, I think you already touched upon that but just trying to get like a long term structural margin structure. So like the last, you know, five, seven since our listing, you know, we’ve had, you know, typically if I just look at EBITDA as such, it’s 40 plus percent and now we’ve come to like a 30% level and we’re seeing that we should be maintaining there. So structurally what has changed in terms of our products or has competition come up or we’re not able to fetch that kind of margins as we could for the last seven, eight years.
Beni Prasad Rauka
So I think earlier the margins, what we are talking about is I think a couple of years was because of the accelerated sales and you know, that was the COVID era. They’re like, you know, you have lot of products for immunity building and those kind of, you know, products with probiotics and a lot of combination of it for addressing you know, various human immunity development related products. So it, it was sort of like, you know, higher margin during those period and prior to that, what you are referring is of course when we get lot of contribution from our US market, we always higher margins.
But over a period of time, you know, the adjustment always happens and there are like, you know, always pressure on the pricing. And so that inflated input cost has also like, you know, to some extent or largely I can say has contributed in erosion of our EBITDA margin. Accelerated sales during COVID periods, that has gone down drastically. So all this have put pressure on the EBITDA margin. So currently the EBITDA margin, if you really look at 24, 25, so we are in the range of about 30 to 33% and that’s what we are saying, that we shall be in a position to maintain that margin.
Shreyans Gathani
Got it. So what would that margin reflect into higher growth as such? Like. Or are we, you know, this is what like the margin profile has come to like in terms of, you know, like how does that impact any kind of growth? Like should we see higher growth because you know, we are at a lower margin as such? Or is that just like erosion of the US business which has caused this to happen?
Ronak Saraf
There is no erosion in the US business. When we are talking over 21 years like we lost one customer. It’s a factor of many things. It’s not just one. But yes, I would say that to summarize, it’s a combination of all.
Shreyans Gathani
Okay. Okay. And so this Rashiopep today is, you know, one of the competitors that just got listed, a large company, they mentioned that they are able to get good margins on that. So just trying to get a sense on how you look at this year for that. I think this quarter might have been like 40 crore of sales for that product versus 27 crore or something. So is that something that you expect to do better? Because your commentary has been that we are not going to see much growth in that product as such and there’s also pressure on margins.
Ronak Saraf
I would still maintain that we will not have a great growth into those areas. But we are working on many other areas as well. Right. So I would still like to maintain that if the growth comes, that is good and good. But we’ll see as we move on.
Shreyans Gathani
Okay, got it. All right. That. That’s all I had in mind. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Rajas Joshi from Chris Capital. Please go ahead.
Rajas Joshi
Am I audible?
operator
Yes.
Rajas Joshi
Yeah. Good afternoon. Thank you for the opportunity. So my first question will be on the gross margins. You highlighted a negative impact of the change in Product mix. So this would likely be related to our largest product.
Beni Prasad Rauka
No, it’s not only one. That’s what we are saying. It is like, you know, various different products which we are supplying to sometime. What happens human nutrition. Like there are probiotics, biocatalysis and several other products. So we generally like, you know, when we see that US is going good, then you have a better margin over our basis. And if US numbers are like flattish or slightly down, then you immediately see the kind of impact on that. So it is like many more things. And even in animal nutrition also there are several products. So few products are giving very good margin.
Few products like, you know, short of kind, you know, a commodity in that sense because of the market. So this is a different profile and change in sales mix which really impacts the overall gross margin.
Rajas Joshi
And secondly, in the biocatalyst piece you highlight a couple of examples probably just to understand what exactly are you trying to do here and how that feeds into the larger picture both on margins and revenue.
Ronak Saraf
So we generally like trying to replace the chemical process by enzymatic waste and we develop those specific enzymes for that particular manufacturing of either for apartment or any other industry. It’s not just limited to the API, but it can be, let’s say perfume industry or any other industry for that matter. It can be for the agriculture industry as well. Okay. Mostly on the organic chemistry.
Rajas Joshi
Thank you, sir.
operator
Thank you. The next follow up question comes from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.
Umang Shah
Hi sir. Thank you for the follow up. Sir, the first question was with respect to tariffs. So 10% tariff has been in place since April 2025. So when you are negotiating with your customers, are we able to pass on this tariff impact or. And if not, to what extent are we able to. Not so far. Okay.
Ronak Saraf
Wait, and what scenario as of now?
Umang Shah
Okay, so as of now, whatever you’re shipping, you are taking that 10% price in your cost structure and then passing it on. That and passing it on?
Mukund Kabra
Yes, as of now, that is what we did.
Umang Shah
Okay, sure. Sir, just one small question. Was the employee cost increase any reason for the same in this quarter?
Mukund Kabra
Employee cost increase? You tell me. I mean this is increase continuously going to happen in a market like here or in US. It’s a both. Like in some the normal salary raises as well as the addition of expansion. Expansion, New additions. Right.
Umang Shah
That counts, right? That is in India or in us?
Mukund Kabra
Both.
Umang Shah
Both the areas. Okay. All the areas in fact. All right, all right, all right, thank you.
Mukund Kabra
We want a Long term growth. Yes, absolutely. Absolutely.
Umang Shah
Thank you. Yes sir, please go ahead.
Mukund Kabra
You need to look when, when you are looking for the salary increase you need to look on the previous quarter and this quarter rather than the quarter on quarter.
Umang Shah
Got it, Got it. Fair point, sir.
operator
Thank you. The next question comes from the line of Ketan R Cheda and retail investor. Please go ahead.
Unidentified Participant
Yeah, hi. Thank you for the opportunity and congratulations on a good set of numbers. My question is sir, in the last call Mr. Mukun mentioned that you are looking at some kind of an intermediate business. Could you throw some light on that? Was it something that you were trying to develop it organically or that was some kind of an acquisition that you were looking at?
Ronak Saraf
Kiranj, you already mentioned that like we did like some of the sale of that as well but I think like it’s too premature because there are a lot of factors which are playing as of now in the next one or two quarters when once the picture gets clear we would like to put more light on that.
Unidentified Participant
Okay, so just for the clarification, it’s a product that we have developed assets, right?
Ronak Saraf
Yes. Yes.
Unidentified Participant
Okay. Okay. So it’s not, it’s nothing to do with any acquisition as such.
Ronak Saraf
Not with the acquisition.
Unidentified Participant
Okay. Okay. All right. Thank you so much. That was my question. Wish you all the best. Thank you.
operator
Thank you. Before we move to the next participant a reminder to all participants. You may press star and want to ask a question. The next question comes from the line of Neha Parodia from abacus. Please go ahead.
Unidentified Participant
Yeah, hi, thanks for the opportunity and good evening everyone. My first question was regarding the growth. So if I look at our long three to five years kind of figure growth it has been in 6 to 7% kind of range and this quarter has been about 20%. I understand that we had guided for better growth for this year but just wanted to understand is it affect Wednesday phenomena or we should over the medium term again should see let’s say 15, 20% kind of growth going forward.
Ronak Saraf
I won’t say that 15, 20% I would say that double digit. I won’t say that 20% that is too optimistic. It doesn’t mean that like it’s not possible but I would always go with like a double digit over a longer term.
Unidentified Participant
But sir, in that is there any structural change because underlying industry is doing let’s say at about 6% kind of range and we also have been growing in line. So anything structural that is changing from this year which can lead to higher growth and increase in the demand Also in that sense.
Ronak Saraf
As we mentioned before, it always takes some time and we are working on it for some time now. So some of them paid off right now, some of them will paid off a little bit later. And of course environment changes impact whatever is we are doing at that particular time in current time. So when you are totally integrated company research and development is a very critical part of developing new products, new services and new new areas to grow.
Unidentified Participant
Yes sir. And sir, also just one more thing on the growth aspect, if I may ask. So do we foresee any regulatory kind of changes which can increase, let’s say uptake of the enzyme versus the chemicals, which is probably more cheaper and easy to get for the end customer to pick. Anything that pushes the demand for enzymes.
Ronak Saraf
We don’t know as of now.
Unidentified Participant
But when we look into the well developed countries, those norms are more towards the green chemistry, particularly into the biocatalys as we move on. Like what will happen in India, we have to wait and watch. But if it happens, it will always be positive.
Ronak Saraf
Regulatory hurdles are going to keep on increasing.
Unidentified Participant
Okay, got it. And also on the probiotic segment, so if I look at the probiotics, the addressable market, it is humongous and I think the underlying market itself is growing at 17, 18% of CAGR. So we last year had about 6% contribution in revenue from that. So do we foresee any product launches? And probably that can lead, that can be a significant portion of our business in two to three years from now.
Ronak Saraf
See when we talk about Probiotic there are a lot of blames. What we sell contains probiotics as well as enzymes. And it’s very difficult to segregate, separate and really come out with the numbers. So here when we talk about probiotic it’s an individual one but our focus is more with the solutions rather than just the one product. And it’s very difficult to predict at this point of time like how much is going to be the growth in either in probiotics alone because that’s more like a commodity sale.
Unidentified Participant
Under students. This is last two questions from my side if I may ask. So one is on what was the volume growth and this quarter on a console level. And second thing was on the, let’s say so we have this serration of Epitax product which is from the pharma part, it is the biggest chunk. So can we see going forward a few products which can be in two to three years or three, four years down the line which can be similar to this product.
Ronak Saraf
So we don’t Measure the volume growth. Because our some of the products are sold at 440 rupees and some of the products are sold at 1 lakh rupees kg as well. So we don’t really count in terms of volume. Of course there might be some more volumes but we really don’t count in terms of volumes as far as the different products are concerned. We are working on many other products and probably some of them will come out. How big they will be is difficult to predict at this point of time.
Unidentified Participant
Understood sir. Thank you so much for answering the question. Thank you.
Ronak Saraf
Thank you Neha.
operator
Thank you. The next question comes from the line of Chandramouli Jagannathan, an individual investor. Please go ahead.
Unidentified Participant
Hello sir. You are saying direct impact is only for 50 crores. You mean to say your contribution to.
Ronak Saraf
USA is only 50 crores from India.
Unidentified Participant
For the whole year or for this quarter?
Ronak Saraf
It’s for earlier what we are talking about. It’s like from India to us it’s closer to that.
Unidentified Participant
Your current capacity utilization is about 50%. And are you, I mean you are likely to tax 80% in two years.
Ronak Saraf
It’s very difficult in our areas to really come out with the percentage of the capacity utilizations because there are many products and they do have a different cycle and it’s very difficult to say how much exact percentage it is being utilized. But I would say that it’s not a 50%, it’s 60, 65% somewhere on that range. And whenever it will come to 80% we will go for the next capacity extension round. Will it come in two years? Yes, we hope so. But we’ll see.
Unidentified Participant
But from time to time we are keep on adding little bit of capacities. Okay.
Ronak Saraf
And at the same time there is like we do a lot of research as well. Right. So sometimes like you empty your capacity by increasing the output as well. So it’s a combination of many other factors as well.
Unidentified Participant
That’s all for me. Thank you.
operator
Thank you. The next question comes from the line of Raghuindra, an individual investor. Please go ahead. Please go ahead with your question sir. As there is no response from the participant. Ladies and gentlemen, a reminder to all participants. You may press star and one to ask a question. The next question comes from the line of Shreyant Ghatani from SG Securities. Please go ahead.
Shreyans Gathani
Hi, thanks for the follow up. So just wanted to ask about the patents that we filed for and the EFSA and the grass dossiers. If you could highlight on you know which areas they’re in like the ones that we filed, you know, newly and the approvals that we got for the dossiers, if you could highlight on that and what kind of market we see and have we started any kind of sales on that front?
Mukund Kabra
That is from the neutral market. Patent is filed in the various different market segments and the sales cells. I cannot identify whether that is. But there is a definitely the market is now with the research patents, you know, and they will affect on the future.
Shreyans Gathani
And so some of the filing is on the Epsom side, is on the baking side as well.
Ronak Saraf
Yeah. On the food side as well.
Shreyans Gathani
Sorry.
Ronak Saraf
That is for the EPSA in. In European market.
Shreyans Gathani
Okay. Okay. So. So just trying to understand, like I have we started, you know, because of that, have we seen any kind of increase in sales in Europe?
Mukund Kabra
Definitely a lot of, lot of interest. Okay. Whenever you have a patent and when you are separating and identifying in marketing place, there is a lot of interest in that. The interest needs to be converted into real sales, you know, in the volume.
Ronak Saraf
So when we talk about efsa, like if you don’t have a registration, truly you will not be able to sell going forward. Yeah. Rather than saying that whether you can, whether you got the sales or no sales, basically even to maintain your current business, you need to go and fight and to add on some of the products as we move on.
Shreyans Gathani
Okay, so. So that’s like a compulsion now to sell in this.
Ronak Saraf
Yeah, absolutely.
Shreyans Gathani
Okay, got it. So last question on the biocatalysis, like, what kind of opportunity are we looking at in terms of, you know, like our enzyme sales and like the European. Like those people are. I’ve read some articles, you know, that they started using that, you know, in certain production processes. So how are you looking at that? Are the sales mainly in the Indian region or are they like mainly focused towards the export markets for us and like the size that.
Ronak Saraf
No, I understand what you’re saying. The opportunities are huge. Right. Because pharma is huge.
Mukund Kabra
Now the question is whether somebody is using it. It’s always a cost and how competitive it is and what is the regulatory, regulatory environment for the pharma and other products, because that is where the cells are. And you just have to look at it and see, wait and see. At this point in time, there is a lot of upheaval. Everybody wants green, green things, but at a chemical cost.
Shreyans Gathani
Got it. Okay. So that’s basically the price point, stopping the adoption.
Mukund Kabra
Yeah, that makes a big difference. Of course, the development is pretty huge.
Shreyans Gathani
So. So try trying to guess like what kind of price differential, you know, Would be there for like an enzymatic solution versus like a chemical.
Mukund Kabra
Can I tell you that? Because everything is different now. How much yield comes in, what percentages you have to use, etc. Etc. What are the process are used. So every company is different and they have their different confidential methods. They tried in a different way and we have to keep on continuously working with them.
Ronak Saraf
Different product has a different structure as well. Yeah. You cannot just generalize it.
Shreyans Gathani
Okay. Okay. So if you. If you could give some feedback that we received from the initial sales that we made. Is there any feedback that we’ve got from the customer and the products cannot add anything further.
Mukund Kabra
We just keep on improving in those areas. Feedbacks are constant. Process until it is established and then register with the respective authorities. Okay. Once it is established, the process is registered with the authorities then that area how much it is growing and what distributions are there. So many factors are there.
Shreyans Gathani
So I meant like feedback from the customer on the product. Like in terms of the performance of the, you know, biocatalysts that we are providing.
Mukund Kabra
So far whatever the products we’ve given is excellent. Those are accepted. Now we need to wait and watch how the other things pan out.
Shreyans Gathani
Okay. All right. That’s it. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Rajvendra, an individual investor. Please go ahead. So please go ahead with your questions.
Unidentified Participant
Hello, Am I audible?
operator
Yes sir, you’re audible. Please go ahead.
Unidentified Participant
Yes sir. So you have mentioned that we have exports of 50tr to us from India. Am I right? Sir.
Ronak Saraf
What I meant to say is like last year we have a sale of 50 crore from India to US.
Unidentified Participant
And in that 12 and a half crore is the impact of tariff and other 38.5 is not affected by tariff.
Ronak Saraf
No, what I meant to say that if you go with the 25% duty on 50 crore. Assuming that though nothing works out, nothing is there then the duty will be about 12.5 crore and that can be the maximum impact. But again then you need to really look into the. That’s a gross margin impact in the worst scenario.
Mukund Kabra
This is also very moving things. Who knows tomorrow there is what else we can come up with Oil penalties and things like that. So please just leave those alone. Don’t worry about too much. Let’s settle these matters when it can and then we’ll see what happens.
Unidentified Participant
This one question, sir. Compared to other competing nations, how are we prices? Are we like equally priced or. We are much more competitive than them. When it comes to price for selling price. Yes. Yes. For a product in which we are in. Do we have an pricing edge over the competing nations?
Mukund Kabra
We don’t have any age for any company. It’s individual product. Whatever we are, there is, there is always. It’s not a commodity. That’s why we have margins. Right.
Unidentified Participant
Got it. Got it. That was the only question. Thank you. And all the best.
Mukund Kabra
Yeah.
operator
Thank you. Ladies and gentlemen. We’ll take this as the last question for today. I would now like to hand the conference over to Mr. Ronak Sara, for closing comments.
Ronak Saraf
Thank you, everyone, for taking your valuable time for attending our earnings conference call. We will keep you posted for any further updates. I request you all to kindly send in your questions that may remain unanswered. An audio recording and the transcript of this call will be uploaded on our website and on stock exchanges in due course. Looking forward to host you all in the next quarter. Till then, stay healthy, stay safe.
Mukund Kabra
Thank you. Thank you.
operator
Thank you on behalf of Advanced Enzymes Technology limited. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.