Advanced Enzyme Tech freezes at 20% upper circuit; stock hits 52-week high

Shares of Advanced Enzyme Technologies were frozen at the upper circuit of 20 per cent at Rs 272.80, also its 52-week high on the BSE on Thursday, in an otherwise weak market. The S&P BSE Sensex was down 1.78 per cent at 36,998 points at 01:05 pm.

The trading volumes on the counter more-than-tripled with a combined 6.7 million equity shares changing hands. There were pending buy orders for around 740,000 shares on the NSE and BSE.

Advanced Enzyme Technologies is a leading specialtiy biotech company, with global leadership in the manufacturing of enzymes. In April-June 2020 quarter (Q1FY21), the company reported resilient performance with a consolidated EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin at 47 per cent against 48 per cent in Q1FY20.

The company’s consolidated revenue remained flat at Rs 111 crore, as compared to Rs 110 crore in the corresponding quarter of the previous fiscal. Consolidated net profit rose 3 per cent at Rs 34.8 crore over the previous year quarter.

For the fiscal year ended March 31, 2020, 57 per cent of the company’s revenue from operations was from international markets, while 43 per cent was contributed by the Indian market.

The company may benefit from an increase in healthcare spending in the US and India. The US has the highest health spending in the world and it is drastically moving towards the usage of human healthcare enzymes and Probiotics. The usage of high protein and genetically modified proteins is picking up the market in the country to match the high efficiency and fast-moving lifestyle.

Advanced Enzyme Technologies intends to expand its presence in the huge global market for Animal Feed. The management said, the company will continue to drive revenues by expanding distribution networks and registrations in key target geographies like North America, Europe, and Latin America.

“Currently, the company operating at 55 per cent (approximately) of the installed capacity of its fermentation assets, which is sufficient to fulfill the present customer needs. To drive the growth of enzymes and probiotics business, the company is fairly comfortable with its existing capacities and capital investments,” the company said in the 2019-20 annual report.

The company may benefit from the increase in pet industry spending in the US. According to the American Pet Products Association (APPA), the overall pet industry spending increased. The company offers a number of products to the animal healthcare industry. An increase in pet industry spending may increase demand for the company’s products. The rising demand for dairy, meat, and poultry farms across the globe will drive the demand for animal healthcare enzymes in the market, it said.