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Nirmal Bang Report
Overall for FY24, Advanced Enzyme Technologies Ltd.'s management has guided for ~15% revenue growth and improvement in margin compared to FY23.
While in a normal environment, the management's aspiration is to clock ~15-20% revenue compound annual growth rate with Ebitda margin of ~40%, it is still away from normalcy, in our view.
Overall, we are building in revenue/Ebitda/adjusted profit after tax CAGR of 17%/31%/24% over FY23-FY25E.
We maintain 'Accumulate' with a revised target price of Rs 320 (earlier Rs 300) post earnings revision.
We continue to value Advanced Enzyme at 20 times price-to-earning i.e. a significant discount to Novozymes' (global leader in industrial enzymes) valuation primarily on account of lower-than-expected growth delivery and rising competition.
A meaningful acquisition(s) and/or strengthening of the leadership team could be some of the re-rating triggers, in our view.
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