CRISIL reaffirms credit rating on Advanced Enzyme Technologies

CRISIL Ratings has reaffirmed its 'CRISIL A+/Stable/CRISIL A1' ratings on the total bank facilities worth Rs 100 crore of Advanced Enzyme Technologies (Advanced Enzyme).

CRISIL Ratings said that the ratings continue to reflect strong operating efficiency of the company, driven by capabilities across the value chain, healthy relationships with customers, extensive experience of the promoters and a strong financial risk profile.

These strengths are partially offset by large working capital requirement and susceptibility to changes in food and drug safety regulations.

CRISIL said that the 'stable' outlook reflects the view that Advanced Enzyme should continue to benefit from its robust market position and healthy operating efficiency, while the financial risk profile should remain strong on account of adequate cash accrual and moderate capex.

Separately, Advanced Enzyme Technologies informed about the completion of the acquisition of additional stake of 15% in its subsidiary JC Biotech (JCB) by way of purchase of 31,06,680 equity shares from few selling shareholders of JCB, for a consideration of Rs 21.12 crore, i.e. Rs 68 per equity share. Accordingly, the shareholding of Advanced Enzyme in JCB has increased from 70% to 85%.

JCB is engaged in the business of manufacturing and sales of bio pharmaceuticals through the process of aerobic fermentation. It had reported turnover of Rs 50.4 crore, and PAT of Rs 7.8 crore for FY2020-21.

Advanced Enzyme is one of the largest enzyme companies in India, with competencies across the value chain: R&D, manufacturing and marketing/distribution of enzymes. The company operates two primary business segments: healthcare and nutrition and bioprocessing. It has multiple subsidiaries operating in similar businesses.

Advanced Enzyme's consolidated net profit rose 11.07% to Rs 38.04 crore on 23.99% increase in net sales to Rs 137.01 crore in Q1 FY22 over Q1 FY21.

The scrip rose 1.84% to end at Rs 377.25 on Wednesday. The domestic equity market is shut today, 19 August 2021, on account of Muharram.

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