We are adding Advanced Enzymes to our Bloom Portfolio

The enzyme maker is an established player in a high margin business

Advanced Enzymes is India’s largest manufacturer of enzymes and probiotics and markets over 400 products spread across animal & human nutrition, food processing and industrial processing.

It has four manufacturing facilities in India and one in the United States. These facilities are currently operating at around 40–45% capacity leaving significant scope for ramping up operations.

As a part of its growth strategy, the company had made two strategic acquisitions in recent years; In 2016, it acquired a 70% stake in Active Pharmaceutical Ingredients (APIs) maker JC Biotech for Rs 50 crores and in 2017 it acquired Evoxx Technologies, a biotechnology firm with a team of 35+ scientists & technicians in Germany.

Both these companies have a very strong R&D focus and will help the company grow its business in the coming years.

In a recent Conference call, the management projected a 13–15% revenue growth for FY19 with 43–44% EBITDA margin and PAT margin of 25–26%.

Given its continued growth, high margins, and a strong focus on R&D, we believe that Advanced Enzymes makes for a compelling buy.

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