Hi, can anyone explain the reasons for such huge stake sale by Promoters?
Is it market sale / sale to some institutions?
Regards,
dr.vikas
Hi,
This sale is from the brother (Mr. CL Rathi) who exited the operating business 4-5 years back to set up a competing business (apparently after some sort of a fued).
If you see the shareholding of Advanced Vital Enzymes Pvt Ltd (entity of Mr. CL Rathi) over the past quarters, it has been continuously declining.
Given this has been offloaded in small batches through the month, likely it has been sold in public market.
Regards
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So the competing business is bad news for listed Advanced Enzyme?
Any information on this?
Thanks for sharing this.
dr.vikas
One of the promoter group has exited the business and has been selling in the open market. I don’t think Advenza can directly compete with AETL. Mgmt. had informed the same in one of the concalls. Also, enzyme is a high-entry barrier business with a long gestation period, product testing and approvals, switching costs, and a long customer acquisition cycle. A significant concern that persists, however, is the lack of growth, which has been elusive for the past few quarters.
Disc: Biased. Invested in self, family, and client accounts.
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So what my take on this situation is,
if C.L. Rathi is settng up a competing business in the same industry then he definitely has some clients who may be ready to switch or some new clients. Hence the numbers of AETL will stagnate a bit. Since the average OPM of AETL is between 30% to 40%, AETL definitely has the pricing power due to which I think it will be a pricing war.
Hence the numbers will stagnate a bit.
Disc - not invested, but looking to invest
2 Likes
Q2 FY24: • The Bio-Processing segment outperformed by 26% during the quarter. In this segment, food business grew by 43%.
• Domestic sales showed a robust growth of 25%
CONCALL:
• Margin improvement is expected to be better going forward.
• Pharma, API and biocatalyst in domestic markets and nutrition in international markets primarily supported the numbers in the human nutrition.
• We have recently got approval for food dossiers this year filed with EFSA somewhere around in 2014. We filed somewhere around 14 dossiers years in 2013, '14 and onwards. It’s always like a long time for their approval. Just recently, we’ve got the two products. And I think those are the two different lipases
• The B2C segment has contributed $1.14 million as compared to $1.11 million during the same period in the previous year HY
• Expect US to start growing from this quarter. Seeing signs of business picking up. Margins will improve once US business starts contributing.
• The product segment where we are in India, we maintain more than 80% of the market share and we will continue to do that.
• SUB SEGMENT SALES DETAILS:
o India pharma sales: 59.3cr vs 44cr yoy
o India probiotic sales: 6.9cr vs 5 cr yoy
o India Biocatalysts sales: 7.7cr vs 6.5cr yoy
o Biocatalysts international sales: 0.8cr vs insignificant sales yoy
• Innovative products to start contributing: We are going with some innovative ideas and innovative products, and those took some time. So, as you look – the gestation time was about five to seven months. And as I was telling from the earlier also, we should start seeing this from this quarter onwards. It should – gradually it should start building up.
• Bakery segment in food processing has started contributing to growth in ASIA ex-India sales. Took a long time to get registrations.
• The largest product i.e., serratiopeptidase: Majority sales comes from the Indian market. We have also filed this product for the novel food, and we are expecting some clearance. We are also filing this product into some of the bigger Asian markets.
1 Like
inactive promoter selling seem to be keeping the stock price in check…
Could you please share the source of this information?
Advanced Enzymes -
Company background -
Company is a leading manufacturer of Probiotics and Enzymes. Company makes over 400 products derived to of 68 indigenous enzymes. These are substitutes of chemicals and find applications in diversified industries like - healthcare, agrochemicals, animal and human food etc
Enzymes - are proteinaceous molecules which serve as bio-catalysts. They not only replace traditional chemical agents but also bolster efficiency and efficacy of a wide array of products. Find wide applications in - baking, food processing, dairy processing, leather processing, biofuels, biomass processing, biocatalysis etc
Probiotics - are living microorganisms that confer significant health benefits to both humans and animals. They also find application in treating disease in areas like - inflammatory bowel disease, urogenital infections etc
Company exports its products to 45+ countries, has 700 + global customers. It’s India’s second largest company in its line of business. Company’s total fermentation capacity @ 500 mtr cube, has 07 R&D units ( 02 in US ), 09 manufacturing plants ( 07 in India, 02 in US )
Domestic : Export revenues @ 47:53
Company stared its manufacturing operations in 1994 with just 07 enzymes. Today, it makes 68 different enzymes
Biggest entry barrier to this industry is real time R&D with requirements of continuous technical upgrades and efficiency improvements - both are long gestation traits
Q3 FY 24 results -
Revenues - 161 vs 142 cr ( up 13 pc )
EBITDA - 54 vs 41 cr (up 30 pc, margins @ 33 vs 29 pc)
PAT - 42 vs 28 cr ( up 52 pc )
Geographical performance for 9M FY 24 -
India sales ( @ 50 pc of total ) - up 29 pc
Americas ( @ 33 pc of total ) - up 3 pc
Europe ( @ 6 pc of total ) - up 4 pc
Asia ( @ 7 pc of the total ) - down 8 pc
RoW ( @ 4 pc of total ) - up 114 pc
Segmental performance for 9M FY 24 -
Human nutrition - 68 pc of sales - up 18 pc
Animal nutrition - 11 pc of sales - down 2 pc
Industrial Bioprocessing - 15 pc of sales - up 17 pc
Specialised manufacturing - 06 pc of sales - up 30 pc
Q3 concall highlights -
R&D expenses @ 6-7 pc of sales
Top 10 clients contribute to 27 pc of sales
Top 10 products contribute to 50 pc of sales
Similar trends are expected to continue in near future
Largest product contributes to 22 pc of topline
Human nutrition - international business seeing good pickup courtesy growth in US. Expecting the growth momentum to continue in future as well
Probiotics doing well in Domestic mkts due increased consumer awareness
Company has got approval for 02 approvals in Europe for food grade Enzymes. Commercialisation of these products is generally a time consuming process
EBITDA margins have been inching up in last 3 Qtrs. Company expects similar improvements to continue for some more Qtrs
Avg US sales have gone up to 60-65 cr/Qtr. This is an encouraging sign. Expecting the US business to keep performing well ( not withstanding Qty lumpiness )
Industrial BioProcessing - is a huge growth area. It takes time to penetrate into new business but is an excellent long term opportunity
The inventory issues that were affecting the company previously are mostly behind them
Management is keeping healthy cash balances ( > 350 cr ) on the balance sheet - are open to inorganic acquisitions
Company’s key focus continues to remain R&D as this is the only way to high and sustainable growth
New normal for EBITDA margin band for the company should be between 30-33 pc. Company is reasonably confident of clocking 15 pc plus kind of growth for the foreseeable future
Disc: planning to take up a tracking position as the company is present in products that are basically futuristic in nature and most of their product segments should keep expanding for a long time to come, not SEBI registered, biased
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Does anyone know why has Sri Sri Ravishankar trust sold their stake?
Have they completely sold off or it has gone below 1% and hence not shown?
Cannot conclude based on the available information. But why would they sell?
May be they have just trimmed so that it will go down below 1% …they dont want to disclose what they are doing with the money so many sadhak are donating them…Their Devotees may start getting doubts about their intentions.