Target: ₹440
CMP: ₹321.20
Advanced Enzyme Technologies (ADVENZY) started FY26 on a good note wherein Q1-FY26 operating performance (Revenue/EBITDA up about 11/24 per cent q-o-q) has shown signs of improvement as indicated by the management earlier. Top-line growth was largely driven by Human Nutrition segment wherein the largest product Serratiopeptidase (Sera) grew by 49/38 per cent y-o-y/q-o-q led by conscious pricing decisions and strong contribution from IPCA. EBITDA margin improved by 308 bps q-o-q, mainly on account of operating leverage.
We expect FY26 to deliver a strong growth on the back of improved momentum in Sera where ADVENZY is the domestic market leader, improved trajectory of nutraceuticals business in overseas market, better visibility in animal nutrition portfolio and favourable base.
Capacity expansion in JC Biotech (for Sera) in FY25 and debottlenecking activity in SSPL coupled with new R&D lab should enable ADVEZNY to improve the growth trajectory in the medium-term, in our view. With current capacity utilisation being at 65 per cent, potential brownfield expansion could contribute to the revenue performance from FY28 onwards, provided the growth momentum continues.
We assign Buy rating to ADVENZY after valuing it at 25x PE on Sep’27E earnings. Consistency in core portfolio growth, meaningful acquisition(s) and/or strengthening of execution capabilities through agile leadership team could be re-rating triggers, in our view.
Published on August 5, 2025
