Advanced Enzyme Technologies Ltd (NSE: ADVENZYMES) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Ronak Saraf — Manager, Investor Relations
Mukund Kabra — Whole time Director
Beni Prasad Rauka — Group Chief Financial Officer
Analysts:
Nikhil — Analyst
Umang Shah — Analyst
Shubham Sehgal — Analyst
Shreyans Gathani — Analyst
Ambuj Chaudhary — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Advanced Enzyme Technologies Limited Q4 FY ’25 Earnings Con 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 assessions during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Ronak Saraf. Thank you, and over to you, sir.
Ronak Saraf — Manager, Investor Relations
Thank you. Good evening, everyone. Welcome to Advance Enzyme Technologies Q4 and FY ’25 Earnings conference call. We sincerely hope that you all have gone through our financials and the press release and the PPT, which has been posted in the Investor Relations section of our website as well as on stock exchanges. Today, we have with us Mr Mukun Kabra, Coletime Director; and Mr Benir Rokka, Group CFO. Thank you.
Today, the management will discuss the performance and business highlights, update on strategies for the coming year and respond to any questions that you may have. Thank you. As-is usual, for the ease of discussion, we will look at the consolidated financials. So before we proceed, I would like to draw your attention to the forward-looking statement contained in our documents. During our call, we may make forward-looking statements regarding our expectations and predictions about the future.
Because these statements are based on current assumptions and factors that may involve risks and uncertainty. Our actual performance and results may differ materially from our forward-looking statements. So now without any further ado, we shall commence this call. Over to you,, sir.
Mukund Kabra — Whole time Director
Thank you, Ronak. Good evening, everyone. I really appreciate you all for taking out your valuable time and I extend a heartiest welcome to everyone joining us today on the conference call for the quarter and year ended 31st March 2025. Let me start with a quick brief on global economic scenario. The global economy is experiencing moderate growth amid persistent challenges, the volatile growth is attributed to factors such as high debt levels, weak investment and ongoing geopolitical tensions, including trade disputes involving major economics like the US, China and the European Union. Now brief on the key developments during the year.
We are pleased to share a summary of significant milestones achieved over the past year, reflecting our continued focus on innovation, sustainability and global regulatory compliance. The company has filed a food enzyme dossier to the European Food Safety Authority for approval. The enzyme is intended for application in baking and the production of refined, edible fats and oils. In the United States, two grass dosiers have been filed with the US-FDA supporting the use of food processing enzymes in baking, driving, starch processing and production.
Furthermore, the company has filed three patent applications related to innovative sugar management technologies. The company has established a separate independent laboratory named Staria Labs under its US subsidiary for testing enzyme and products. The company has successfully completed the installation and commissioning of an additional 350 kilowatt solar power plant, raising its total clean-energy capacity to 510 kilowatt. This marks a significant step forward in the company’s Sustainability strategy. Going ahead, the company remains committed to expanding its reliance on renewable energy sources in the coming years. Quarterly performance. Now as far as the quarterly performance is concerned, we achieved a top-line of INR1672 million, growth of 6% on year-on-year basis and degrowth of 1% on a sequential basis in-quarter four. Our EBITDA stood at INR456 million. EBITDA margin stood at 27% and PAT margin stood at 16% during the quarter-four. Lower EBITDA margin is due to change in-product mix and true-up of the inventory valuations at the year end. During financial year ’25, the total revenue grew by 2% to INR6,369 million. EBITDA at INR1,944 million is 31% of sales. Net profit stood at INR1,340 million. Talking about the segment-wise performance, Human Nutrition quarterly, the Human Nutrition segment contributed 62% in revenue by — it grew by 1% on year-on-year basis and on sequential basis. Annually, on full-year basis, revenue is down by INR132 million, about 3%, mainly due to lower revenue from domestic markets, while USA and other international markets business witnessed growth. HN constituted about 64% of the revenue in financial year ’25. Animal Nutrition, our Animal Nutrition business contributed 12% to the revenue in-quarter four. This segment grew by 13% on year-on-year basis and 6% on a sequential basis. During financial year ’25, Animal Health Nutrition witnessed an increase of 12% and about 12% of the revenue as compared to 11% in financial year ’24. Bioprocess, our Bioprocess business contributed 17% to the revenue in-quarter four. This segment grew during the quarter by around 8% on a year-on-year basis, while de-grew by 13% on sequential basis. Annually of Food business grew by 4% to INR809 million, constituting about 13% of the total revenue, while non-food business grew by 12% to INR208 million. This constitutes 3% of total revenues. The specialized manufacturing business contributed 9% and grew by 39% on a year-on-year basis, while remained unchanged on a sequential basis. We reported 30% growth for whole year and about 8% of our total revenue as compared to 7% during financial year ’24. We acknowledge that R&D is crucial for sustained long-term growth. We also maintain product portfolio, specific strategies that focus on complexities of the geographical market fits. We are proactively seeking new opportunities and advancing the development of new products and molecules within our Biocatalyst and bioprocessing portfolios. These innovations are anticipated to contribute to future revenue growth. We are optimistic about the upcoming years, anticipating growth and success with a strong pipeline and product portfolio. We look-forward to building on our momentum and driving great year ahead. With this, I conclude my remarks and now hand over the call to Mr. He will walk you through the financials and key subsidiary numbers.
Beni Prasad Rauka — Group Chief Financial Officer
Thank you very much,. Good evening, everyone. I hope you all are in good health on the company’s consolidated financials for the 4th-quarter and fiscal year 2025, I would like to give first the Q-on-Q numbers on a sequential basis. The revenue is decreased by INR19 million by 1 percent point from INR1,691 million to INR1,672 million. The EBITDA margin stood at 27% as compared to 31% in the corresponding previous quarter.
Profit before-tax at 26% as compared to 31% and PAT during the quarter was INR257 million as compared to INR389 million. On year-on-year basis, the revenue is at INR1,672 million as compared to INR1,578 million, increase of 6% and EBITDA is at INR456 million as compared to INR554 million. Profit-after-tax at INR267 million, this is about 16% as compared to INR299 million. On year-on-year basis, this is financial year ’25 versus ’24, the revenue is increased by 2 percent point from INR6,239 million to INR6,369 million.
EBITDA is at INR1,944 million, about 31% of our revenue as compared to INR2,045 million of FY ’24. Profit before-tax at INR1,874 million, 29% as compared to INR1,879 million, which is 30% of revenue in FY ’24. PAT is at INR1,340 million as compared to INR1,370 INR370 million and the PAT in terms of the percentage of revenue is about 21% in FY ’25 as compared to 22% in FY ’24. Let me give you our subsidiary numbers.
JC Biotech revenue stood at INR600 million during FY ’25 as compared to INR626 million in FY ’24 and EBITDA is at INR70 million as compared to INR77 million in FY ’24. PAT is at INR12 million as compared to INR18 million in FY ’24. EVO revenue for financial year ’25 is at INR2,213 million as compared to INR230 million and EVOX has a negative EBITDA of INR12 million as compared to negative 8 million in FY ’24 and the loss of a loss at Evox is about INR39 million, up as compared to INR21 million in FY ’24.
Has done exceedingly well during this year. Revenue is at INR542 million as compared to INR418 million in FY ’24, 30% of growth and EBITDA is at INR76 million as compared to 58 million in FY ’24. PAT stood at INR37 million versus as good as I mean last year number of 37 million. Our largest anti-inflammatory enzyme sales stood at 1,193 million as compared to 1,310 million. This is about 29% during the year as compared to 21% last year. Top-10 customer concentration is about at about 22% as compared to 26% in FY ’24.
B2C segment during the year performed at in terms of INR375 million as compared to 394 million and in USD4.46 million US dollar — I’m sorry, US dollar 4.46 million as compared to 4.77 million in FY ’24. R&D expenditure during the year, we have spent about INR328 million as compared to INR274 million, which is about at 9.34% of our revenue as compared to 7.5% in FY ’24. On consolidated basis, R&D spend is about 5.32% in Q4 and 4.7% in Q4 of FY ’24. This is without considering the intercompany elimination. And on consolidated basis, R&D spending — with elimination, it’s about 4.4% as compared to 3.5% in Q4 of the FY ’24. On consolidated basis, R&D spend for FY ’25 is at 5.3% as compared to 4.53% in FY ’24. This was from my side. Now we shall 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 and one on the touchdown telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue. The first question is from the line of Nikhil from Simple. Please go-ahead.
Nikhil
Yeah. Hi, good evening. Am I audible?
Mukund Kabra
Yeah. Good evening. Yeah, yeah.
Nikhil
Sir, first question was on this fall in gross margin. Now you ascribed two reasons. One was the product mix and inventory valuation. If I look at the revenue mix within segments, it largely remained the same. So can you just talk about it what actually led to this fall in gross margin and this inventory valuation was a one-time activity or some sense on that?
Mukund Kabra
Yeah. So I mean, you rightly said as far as you know, the numbers looks like same. But within that, there are some products. So depending upon the volume of sale of that particular product and the margin that in fact impacts the overall growth contribution. And apart from that, the second question about the like know true-up of the inventory because year-end valuation when you do then sometime there are few things which acts as a balancing figure. So that has to be taken care.So that also impacts you know overall like
Nikhil
I understand sir but where I’m coming from is if I look at our long history this reevaluation would have happened in previous years as well, but the large impact we’ve never seen in historical quarters. So is it like —
Mukund Kabra
It’s not revolution. I’m sorry, there is no revaluation as such. It is like year-end exercise, which is done every year as such. So sometime that review of — you have some kind of miss, which has to be corrected.
Nikhil
Okay. So and is it because of some fall in prices of the products as a result, we’ve seen this — like this — so what led to this miss? Like because it never happened historically, so just that’s why I’m trying to understand like 5%, 6% hit which we have seen, we’ve never seen historically happening. So that’s why I’m just trying to understand. And going-forward, should we consider that 77% 78% as the base margins or what should be the base gross margins?
Mukund Kabra
I think that’s what 76%, 77% is the kind of gross contribution which we shall be in a position to maintain as of now.
Nikhil
Okay. And second question to Mukun sir. Sir, you mentioned that in your opening statement that you seem to be positive for FY ’26. I know this is a business where it’s difficult to exactly project how things will evolve. But if you can just talk about what are the underlying assumptions and what are the underlying demand scenario you are looking at on which basis you believe that we can — FY ’26 should be better than ’25?
Mukund Kabra
Nikhil, there are like certain global challenges as of now. The picture is little unclear on like US front, particularly with the duties and how the things are moving. But as of what it stands, I think it’s more like a positive side will look good flow starting from this quarter some of the some of the movements in the bio catalyst areas are going to start and overall basis, we see good traction in US as well, in India as well, but it’s all like depends on like how this how this volatile situations,
What is happening in US pan-out how the duties may come up into the — even into the pharma products in India or some other areas like how the Trump is, how the US is going to put the duties on China or some other areas. So those few are still like the hanging factors, which we don’t know as of now. But when we — when we do this and when we look-forward for this year, we see a good growth at somewhere around like mid double-digit number. So we see very positive year coming forward.
Nikhil
Okay. And just last question and then I’ll come back-in the queue. So see, we have our facility in US and we have our facility in India. If this tariffs thing does come out like at whatever percentage, would we not be benefited because of having our own facility or may see a better volume shifting towards us? Is this a right assumption or would you say that’s not how we should think?
Mukund Kabra
No, both. I think like that is what I said, like how the — how the tariff on China and other areas move, right? And yes, like there can be some positive area. At the same time, what the facility what we have in US is more on a blending side or the final product side rather than the fermentation side. So most of the raw-material what is needed from US goes from India. So right now, there is a 10% duty of which if we just go by the last year probably we might have an impact of about $400,000.
But if we really look into the — if we really look what the other business can come because of whatever is unstability is being created, probably that can be neglected and probably like we can see a higher-growth as well. But it all depends how the things move. But even like we — we keep all of these factors aside right now and we just see that nothing is moving into those directions. Still we feel that we should have a good growth as of now. If those things are like in a positive area, they may add if those are in the negative, they may reduce the numbers. That’s how I look at it at this point of time.
Nikhil
Sure. I’ll come back-in the queue.
Operator
Thank you. The next question is from the line of Umang Shah from Banyantrie Advisors. Please go-ahead.
Umang Shah
Hi, sir. Am I audible,.
Mukund Kabra
Yeah, hi.
Umang Shah
Thank you. Thank you for the opportunity. Sir, first question was pertaining to the biggest product that we sell, which is serapeptides. Sir, in Q4, how has the competitive intensity reduced and how do we think about it in FY ’26? And second is, if you could repeat how much did it contribute to the total revenues for FY ’25, that would be great.
Mukund Kabra
I think like
Beni Prasad Rauka
But we see that there will be some challenge into this area, particular area we see that it will have a — it will have the pressures going-forward as well. And as like a as a policy, we will like come out with some other products, which will give us the growth. We may see that there might be another 2%, 3% to 5% fall on the revenue on this particular area.
Umang Shah
Okay. So it’s 2%, 3% is 19% minus 2%, 3%.
Beni Prasad Rauka
Yeah, right.
Umang Shah
Okay. And sir, one more question was, you had launched products in weight management Management, sugar management and protein digestion last year. What percentage of revenues do they bring in right now?
Mukund Kabra
So M&J is like I don’t know the exact percentage, but still we didn’t get those kind of volumes which were expected, but a lot of growth from the US is coming from other segments and other areas as of now. We are still working on those areas, but the traction what we expected didn’t come out last year.
Umang Shah
Sure, sir. Sir. And one question was that two, 3/4 back, mentioned that the peak margins that this business can go to is 30% to 33%. Considering our revenue growth, what you’re envisaging at that time and now what we are looking at, do you still think the company can have the margin potential or over next three to five years or do you want to have a rethink on the same?
Mukund Kabra
What I can say is right now, we expect like the same margin of this year for the coming year, when the revenue grows, probably it may grow, but for the calculations purpose, we are going with the same number of this year.
Umang Shah
Okay, sure. Thank you, sir. I’ll get back-in the queue.
Operator
Thank you participants who wish to ask questions may press chart and one at this time. The next question is from the line of Segal from Skill Ventures. Please go-ahead.
Shubham Sehgal
Hello, am I hearing?
Mukund Kabra
Yes,.
Shubham Sehgal
Hello. Yeah. So my first question was on the marketing front. So previously, we have faced some difficulties like in the past few years, be it the higher costs we are faced in US or Europe or the mismatch expectations between the third-parties. So my question is, what are we doing actively on this front? And have we found any success at all-in sorting-out our marketing issues?
Mukund Kabra
Sorry, I didn’t get your question,. Can you please repeat?
Shubham Sehgal
I’ll just repeat it. So we have been facing difficulties on our marketing front, be it the higher-cost or the mismatch expectations. So my question is, what are we doing actively on this front and have we found any success at all-in sorting our marketing issues?
Mukund Kabra
Okay. I think to our knowledge, as such, I think only the issue we might have mentioned is that we have to expand our marketing efforts in particularly overseas market and that’s where like we might have discussed that for a particular segment or particular category of like products like when we talk about animal feed business, how do we like really expand our marketing reach to overseas market where lot of issues are there for the registration of the products, for having a distributors and for the food business as well,
We might have discussed this thing, but I don’t remember that there is any kind of mismatch and any kind of issues we are facing in that sense. So the only challenges were like how do you really ramp-up getting your product registered with European Food safety authorities, how do you register your products with various countries and even there are some countries where when you want to import, so the local distributor, they have to register their products.
So those were kind of a challenges, which of course in last couple of years, we have ramped-up and we have really got some kind of breakthroughs and we have used a lot of resources to have that kind of thing in-place. But yes, lot more is to be done and it will take a couple of years to have that kind of a distribution network.
Shubham Sehgal
Okay. My next question was on our plant that we have established. So what percentage of our total power consumption will be met through this plant and what level of cost-savings can we realistically expect?
Mukund Kabra
Which plant, sir
Shubham Sehgal
The solar plant we have established?
Mukund Kabra
Kilowatts. No, so this 510 kilowatt what we are talking about.
Shubham Sehgal
Yes, yes, the solar plant.
Mukund Kabra
The solar plant. No, this is not a solar plant what we put up. Right now what we put up is like a 510 kilowatt of the capacity of the panels on the — on the plant itself. That is somewhere around like for last year, we generated about 303 lakh 15,000 units, somewhere around that, but that is almost like 5% to 10% of our total 10% of our total — consumption as of now what we use at. We are looking for some other options as well.
On the solar where we — there are certain options like making a joint-venture company and buying it, but we are exploring all of that and probably we will look into this year to establish that as well.
Shubham Sehgal
Okay. Just my last question on our specialized manufacturing segment. So can we expect this segment to grow like at a 30% rate sustainably? And what are the factors currently driving this growth?
Mukund Kabra
Yeah. I think if not 30%, at least this business is going to going to grow more than 20% in the coming year as well. And the factors is like you know, the capacities have been created. In FY ’24, there was challenge. I think we have mentioned earlier there was a fire in that plant. So because of that, you know, the manufacturing has to some extent impacted. So FY ’25 full-fledged like the plants were in operation and we also added some capacity in FY ’25.
So now we are getting lot of like orders and inquiries and we are signing lot of contracts. So that helps us to have a better visibility of the revenue in FY ’26. And we again we are also working on expanding more capacity of this particular plant going-forward.
Shubham Sehgal
So are we seeing more demand traction from international markets or domestic markets or both of them?
Mukund Kabra
So it’s like both assets, but yes, this year we could see that a lot of growth has come from the Indian market only.
Shubham Sehgal
Okay, got it. Thank you.
Operator
Thank you. The next question is from the line of Shreyansh Gathani from HG Securities. Please go-ahead.
Shreyans Gathani
Hi, good evening, sir. So my question is on the margin. In the initial comments, you mentioned about the change in-product mix impacting margins. So my understanding was that the US market typically — the products that we are selling there have a higher-margin. So if I look at Q4 FY ’25, there is 22% growth in the US business. So just trying to understand like how should we look at your margin-based on geography or is it like we should not look at it in that way?
Mukund Kabra
So I mean, of course, US has a better margin because whatever manufacturing — core manufacturing is happening in India and US is doing some kind of a customized formulation so they do face a better margin in that sense because their approach is completely — one is solution-based approach and over a period of time, they have created their own branding. So they face better margin as compared to India business.
And apart from that, you know, we have a couple of subsidiaries. Now these subsidiaries are like again two, three subsidiaries are like 100% subsidiary. So they are into a different business, their margins are different. They have a — like if I talk about bioprocessing, non-food. So non-food business has kind of low margins. Food business is slightly better. Animal Food has a different kind of a margin. So US has of course a better margin in that sense.
So as the US business will grow, definitely we could see a better margin, but then of course now going-forward, as a lot of challenges are there because of the tariff issues. So we have to see that there may be some kind of a competition which comes when you have this kind of margins in the business. So those factors definitely will always take into account and that’s the reason we are saying that you know, going-forward, we self be checking of only when you prepare your business model for a couple of years.So, 30% 31% of EBITDA margin is something like is sustainable in that sense.
Shreyans Gathani
Got it, got it. So on the US market, so you mentioned that last year the products that we launched are not seeing a lot of — didn’t did not see a lot of traction as you expected. So is there any — are there any other products that we are launching or like is that picking-up now or how do you see them playing out this year?
Beni Prasad Rauka
So this year like we will see it better, like growth-wise or otherwise, it’s a little bit slower than like what our expectations Were in the beginning. But at the same time, like we are working on some other areas like the — and which was the existing business as well, which has grown much better. And this year also we see that like most of the growth in the US has to come — also has to come from the existing businesses right now.
Shreyans Gathani
Okay. So the newer introductions are not going to contribute significantly.
Mukund Kabra
They will contribute, but they will take some more time than what we — what we initially anticipated.
Shreyans Gathani
Got it, got it. So could you just like give some idea on like why we are like it’s not picking-up as fast. Is that like slower customer adoption or there’s competition more than we thought or could you just give some idea on why the anticipation,
Beni Prasad Rauka
The earlier like expectations were based on like the MLM model and the first — and the company with whom we were working was like — and those were like all their projections. And based on that like we come out with those projections, but then slowly, slowly, we slowed down on the MLN side and then we are like working with some other more people to expand this market. So it’s a process, right? So the time consumption is for right now.
Shreyans Gathani
Got it, got it. My next question is on the R&D center update, like could you just share where we are with that? And like I think we expect the Phase-1 to be started this year, if that’s on-track or not.
Beni Prasad Rauka
Okay. So we expect it — expect to finish the construction work by the December of this year and some portion will start in the last quarter of the last quarter of this year, particularly.
Shreyans Gathani
Okay. Okay. Got it. And so I also read like — sorry, sorry, you’re saying.
Beni Prasad Rauka
No, so the last — I mean, it’s of five floor buildings, the last lab is in-process right now and then all the other civil work has to be done.
Shreyans Gathani
So you just saw that there is a company incorporation you know for this year in India. Could you just elaborate on what we are planning to do there or is just you know some just a way for some other business? Are
Beni Prasad Rauka
We have like B2C business or you can say direct spell business in-human nutrition where we are like selling our nutraceutical products on Amazon and so for that, we are separating out our this particular business in a subsidiary company.
Shreyans Gathani
Okay. Okay. So the Valpha business is going to go there.
Mukund Kabra
So that more focus can come into that. We feel that now it’s time to put some focus on that particular area as well.
Shreyans Gathani
Got it, got it. Understood. And just last question on the EVOX business, there was like an order a quarter or two ago, is there any update on that on that? And is there any other opportunities that we are looking on that front?
Mukund Kabra
Yeah. So that order is already materialized. I guess like I already confirmed that, right, what you were talking about that. We are working on that. In similar areas, we are still talking with couple of more people. But as of now, it’s in the — in the process.
Shreyans Gathani
Got it, sir. That should be executed this year, right?
Mukund Kabra
Yes, yes.
Shreyans Gathani
Okay. So we should see like the losses reducing from this year?
Mukund Kabra
Definitely. Definitely this year we will see turnaround.
Shreyans Gathani
Okay. All right. That’s it from my end. Thank you so much.
Mukund Kabra
Thank you.
Operator
Thank you. The next question. Before we take the next question, we would like to remind participants that you may press chart and one to ask a question. The next question is from the line of Ambu Chaudhary and Retail Investor. Please go-ahead.
Ambuj Chaudhary
Hello, good evening, everyone.
Mukund Kabra
Good evening.
Ambuj Chaudhary
Am I audible?
Mukund Kabra
Yeah.
Ambuj Chaudhary
Yeah. So like globally, it’s a trend that every other like major chemical players and R&D companies are incorporating artificial intelligence to like speed-up and streamline their R&D processes like time-to-market, molecule discovery and all sort of thing. So like is our company doing like implementing artificial intelligence in any way in R&D?
Mukund Kabra
Yes, we are exploring. This year that is one of the task for us to go-forward. We will be taking some — we are working on that. Probably this year we will implement some of them.
Ambuj Chaudhary
Okay. Okay, okay. And next question is like what would be the like guidelines for this financial year, like what would you expect like any surprises in any way possible like from any geographic market or any product
Mukund Kabra
There can be a lot of surprises. We but what we expect is like as I already said, like maybe like a mid double-digit growth as of now we might see better as well, depending on how the global bank global things turn out and also we are looking into the some kind of a intermediate intermediate kind of a business and if that works out fairly, there can be the top-line can be much higher
Ambuj Chaudhary
Okay, okay. Thank you. Thank you, sir.
Operator
Thank you. Thank you. The next question is from the line of Amang Shah from Advisors. Please go-ahead.
Umang Shah
Hi, sir. Thank you for the opportunity again. Sir, in the calls you break-out the Human Nutrition revenues between India and International. Could you please do this?
Mukund Kabra
Yes, yes so Umang I’m giving you for the FY ’25 yes this 1764 million 1,764 million. Yeah. And international business is INR2,289 million.
Ambuj Chaudhary
Okay. Okay, sure. Great, sir. And sir, one question was Biocatalysts business. We have been in conversation with pharma companies for quite some time. So what are the challenges here for them to adopt this solution that we have?
Beni Prasad Rauka
So yeah, like there were like some challenges like as I already talked on the earlier as well, like for one of the molecules like the — for example, the lead cost has gone up and all of those sort of things were there, lithium, not led. But then we come out with some other ways for this year, particularly. And this year like this year like like we should see a good growth in that particular area.
Umang Shah
Right, sir. Right, sir. And sir, you mentioned that the India pharma business will continue to be stressed in next year also. So in that context, some other segment will have to have higher-growth 10% to 15% growth for us to actually grow at, say, high-single-digit in next one to three years. So which segments are you more optimistic about
Mukund Kabra
The area right now?
Umang Shah
Okay, sir. And sir, animal Feed, industrial processing, any commentary?
Beni Prasad Rauka
Animal feed will do — animal food will do also very good this year, but the problem is like a low best. So even though whenever we talk about good we when we talk about overall growth it’s — its contribution is on the lower side when we even like so animal Food should also do good. Food will be a, I would say normal for this year, particularly right this year like major growth will start coming from the HN only. Even.
Umang Shah
And sir, with the largest product that you sell, do we think that this is the new normal in terms of margins and sales growth and the competition is here to stay or do we think that we will revert back to our own profitability and sales composition once these temporary issues are done away with?
Beni Prasad Rauka
I think it’s a the it’s a game who can sustain, right? So it will take some more time, maybe two, three years and then we’ll see how that pan-out. There will be some quarters when we will see the good growth, some quarter we will be the normal ones. Depending on the — depending on the situation in the market. But for the calculation purposes, we are going with the — this as a normal right now.
Umang Shah
Right, sir. And sir, what would be the discount that the competitors offer to the product that we sell if you are able to talk about it?
Beni Prasad Rauka
There will be the Erosion on that front somewhere around 5% to 7%, particularly. As of now, that is what we are taking into the consideration for the next year, particularly.
Umang Shah
Sure, sir. And the demand growth will not be significant here. So you are actually looking at a volume decline more or less?
Mukund Kabra
No, we will see the volume may grow, but actual realization may be at the same level.
Umang Shah
Okay. Okay. Sure, sir. Thank you so much, sir.
Operator
Thank you. Thank you. Before we take the next question, we would like to remind participants that you might press char and one to ask a question. The next question is from the line of Shugam Segal from Skill Ventures. Please go-ahead.
Shubham Sehgal
Hello. Am I audible?
Mukund Kabra
Yes,.
Shubham Sehgal
Yeah. Just a follow-up on a previous question. So like about the gross margins itself. So in the last five, 10 years, if we see our quarterly gross margin, so like never we have witnessed like such low gross margins of 72%. So I mean, I heard that you said that we did some inventory revaluation, but still this kind of margins we have not seen yet. So like could you just elaborate on that? Like is it possible we like price our products lower to drive growth or something like that because like these low gross margins we haven’t seen.
And also from next quarter what gross margins can we expect?
Mukund Kabra
See on the raw-material front or the other front, we will have a 1% or 2% increase going-forward as well. But rest of the things,,
Beni Prasad Rauka
You can talk. So, I think you are looking at quarter — so you should look at the yearly numbers, annual numbers, then I have already explained and some true-up has been done. It’s not like your true-up is having a very substantial impact on this overall basis. And here, the question was like the product mix, which we have mentioned to you, some of the products which might be facing a very good margins if the sale of those products during the quarter is low, it’s lower than previous quarter,
Then you see the overall gross margin and EBITDA margin that gets impacted. So when you look at the yearly annual numbers of FY ’25 and FY ’24. So only you see the 77% is the gross contribution for FY ’24 and FY ’25, it is 76%. And EBITDA margin was about 32% in FY ’25 — ’24 and this year we are having about 31%. So only the quarter-to-quarter comparison is something you know, this is —
Shubham Sehgal
So on a yearly basis, then what kind of gross margins can we expect going-forward?
Beni Prasad Rauka
I think we are — I already mentioned we should mean — we are maintaining the kind of EBITDA margin and gross margin in the same level.
Shubham Sehgal
On a yearly basis. Okay.
Beni Prasad Rauka
So in the range of 76% to 77,
Operator
Then before we take the next question, we would like to remind participants that you may press chart and one to ask a question. Before we take the next question, we would like participants to that you may press Shar N1 to ask a question as there are no further questions, I would now like to hand the conference over to Mr Ronak Sara for closing comments. Please go-ahead
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. Today, I request you all to kindly sign in your questions that may remain unanswered. An audio recording and the transcript of this call will be uploaded on our website in due course. Looking-forward to hosting you all-in the next quarter. Till then, stay healthy, stay safe.
Mukund Kabra
Thank you.
Operator
Thank you. On behalf of Advanced Enzyme Technologies Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.