Advanced Enzyme Technologies Ltd
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Advanced Enzyme Technologies Ltd
Earnings Call Analysis
Summary
Q1-2025
Advanced Enzymes' Q1 FY'25 performance showcased a 5% revenue increase year-on-year to INR 1,545 million despite a 2% decline sequentially. EBITDA grew 16% year-on-year to INR 512 million, though it fell 8% sequentially. EBITDA and PAT margins stood at 33% and 23%, respectively. The Human Nutrition segment contributed 65% to revenue with minor fluctuations, while Animal Nutrition and Bio-Processing segments showed notable year-on-year growth of 9% and 12%, respectively. The company maintains its annual growth guidance at 12-15%, anticipating robust performance in the latter half of the year.
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Ladies and gentlemen, good day, and welcome to Advanced Enzyme Technologies Limited Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ronak Saraf, Investor Relations. Thank you, and over to you, sir.
Good evening, everyone. Welcome to Advanced Enzymes Q1 FY '25 Earnings Conference Call. I'm Ronak Saraf, the Manager of Investor Relations here at Advanced Enzymes. We hope you all have gone through our financials, press release and the presentation, which has been posted in our Investor Relations section on our website.
We have with us Mr. Mukund Kabra, Whole-Time Director; Mr. Beni Rauka, Group CFO. Today, the management will discuss the performance and business highlights, update on strategies and respond to any questions that you may have.
As is usual, for ease of discussion, we will look at the consolidated financials. Before we proceed, I would like to draw your attention to the forward-looking statement contained in the presentation. During our call, we may make forward-looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that may involve risk and uncertainty, our actual performance and results may differ materially from our forward-looking statements. So without any further ado, we shall commence this call. Over to you, sir.
Thank you, Ronak. Good evening, everyone. I really appreciate you all for taking out your valuable time. And I extend heartiest welcome to everyone joining us today on the conference call for the quarter ended 30th June 2024. Coming on to the performance, the company's overall performance improved on a year-on-year basis.
Now as far as the quarterly performance, our top line stood at INR 1,545 million, grew 5% on a year-on-year basis, and it has de-grew by 2% on a sequential basis in quarter 1. Our EBITDA stood at INR 512 million, grew by 16% on a year-on-year basis, while it has declined by 8% on sequential basis. We have witnessed growth of 19% in the bottom line on a year-on-year basis and 17% on sequential basis. On the margin front, EBITDA margin stood at 33% and PAT margin stood at 23% during the quarter 1.
Now talking about the segment-wise performance. I will first go through Human Nutrition. The Human Nutrition segment more or less remained unchanged during the quarter, contributing 65% in the revenue. It grew by 2% on a year-on-year basis, while a slight decline of 1% is registered on sequential basis. Nutrition business primarily supported the numbers in Human business. Overall, the demand in the pharma business remained subdued.
On Animal Nutrition, our Animal Nutrition business contributed 11% to the revenue in quarter 1. It grew by 9% on a year-on-year basis while it has declined by 7% on sequential basis.
Bio-Processing. During the quarter, Bio-Processing segment contributed 16% to the revenue. It grew by 12% on year-on-year basis and de-grew by 3% on sequential basis. The food business grew by 6% on year-on-year basis and de-grew by 1% on quarter-on-quarter basis.
The Non-Food business grew by 43% on year-on-year basis and de-grew by 9% on quarter-on-quarter basis. The Specialized manufacturing segment contributed 7% and grew by 13% on year-on-year basis, while it remained unchanged on sequential basis.
Our principal focus is on improving our product offering, keep introducing newer and commercially viable products and consistently meet the ever-changing demands of our clients. We anticipate a robust growth trajectory in all our segments in the second half of this year. We'll bring more resilience in our business to enhance customer value proposition and deliver long-term sustainable growth going forward. With this, I will hand over the call to Rauka ji, and he will walk you through the financials and key subsidiary numbers.
Thank you very much, Mukund. Good evening, everyone. I hope you all are in good health. On the company's consolidated financials for the first quarter of fiscal year 2025. On year-on-year basis, Q1 '25 versus Q1 '24, our revenue increased by INR 72 million, 5% of increase from INR 1,473 million to INR 1,545 million. EBITDA increased by INR 72 million, 16% from INR 440 million to INR 512 million. This is about 33% EBITDA in Q1 of FY '24 -- '25, I'm sorry.
Profit before tax increased by INR 73 million, 18% increase from INR 414 million, which is 28% of our revenue, to INR 487 million, 31% of our revenue for the quarter 1 of FY '25. Profit after tax has increased by INR 56 million, a 19% increase from INR 294 million to INR 350 million. That is about 23% of our revenue. On sequential basis, the revenue is decreased by about 2% from INR 1,578 million to INR 1,545 million. EBITDA decreased by INR 42 million from INR 554 million to INR 512 million. Profit before tax increased by INR 90 million from INR 397 million to INR 487 million. Profit after tax on sequential basis increased by INR 51 million from INR 299 million to INR 350 million.
On our financial performance of some of the subsidiaries. JC Biotech for Q1 FY '25, revenue stood at INR 159 million; EBITDA of INR 24 million and PAT of INR 7 million, as compared to INR 134 million of revenue and INR 9 million of EBITDA and profit of INR 1 million in FY '24 quarter 1. Evoxx' revenue stood at INR 47 million as compared to INR 54 million in Q1 '24. EBITDA is negative INR 7 million and INR 7 million was in Q1 of FY '24. So no change. Profit after tax, evoxx continues to be in loss. It's about INR 15 million of loss during this quarter as compared to INR 13 million in last year's Q1. The sales of SciTech stood at INR 111 million as compared to INR 97 million and EBITDA of INR 22 million as compared to INR 4 million. Profit after tax, INR 10 million as compared to INR 1 million.
The sale of our largest product, which is anti-inflammatory enzyme, stood at INR 280 million for the first quarter of FY '25 as compared to INR 352 million in Q1 of FY '24, so there's a de-growth of about 20%. And it constitutes about 18% of our total revenue. The top 10 customers contributed 23% in the total revenue in Q1 FY '25 in comparison with 26% in Q1 of FY '24. The B2C segment contributed about USD 950,000 as compared to INR 1.28 million during the same period in the previous year.
The Human Health Care segment where we provide generally more granule numbers. So I'm giving you those numbers now. Pharma India INR 375 million as compared to INR 447 million. Pro-biotocs INR 39 million as compared to INR 5 million. Biocatalyst is INR 74 million as compared to INR 86 million. India sale is about INR 488 million in Q1 as compared to INR 538 million in the corresponding first quarter of FY '24.
International sales, Human Nutrition is about INR 523 million as compared to INR 456 million in Q1 of FY '24. The major contribution has come from the U.S.A., INR 494 million as compared to INR 422 million last year Q1.
R&D spending during this first quarter, we have spent about INR 76 million on R&D as compared to INR 62 million in quarter 1 of FY '24. And if we see that in terms of the percentage, on stand-alone basis, it is about 9% as compared to 7%, and consolidated that is -- R&D spend is about 3% in Q1 as compared to 3% in Q1 of last year. This is after intercompany eliminations.
And if we do not remove this elimination, then on consolidated basis, R&D spending is about 4% in both the quarters. That was from my side. Now we shall open the floor for question-and-answer session.
[Operator Instructions] The first question is from the line of Shubham Sehgal from SIMPL.
So my first question is, so like in the previous calls, we have been hearing that you are working on the sugar management and the weight loss products. But could you actually really provide a concrete essence [indiscernible] which stage of development have we reached? When you'll be able to launch these products? And what kind of revenues can we expect, like any ballpark figure would work? And will we only be distributed to the U.S. market or we would expand to other regions as well?
Shubham, as you see some of the nutraceutical business in the U.S. is growing in the first quarter. On a quarter-on-quarter basis as well as on base basis, some of the sale is started, but it is still under the trial. So just -- I won't be able to give the exact revenue numbers for that. And as of now, like we are targeting the U.S. market for these kind of products.
When do we expect to launch, because we have been hearing since 3, 4 quarters, right [indiscernible] year?
We've already launched, but it's like on a pilot basis as of now.
So my next question is that, over the next 2, 3 years, what would be our key priorities and key gaps in the business, which we want to cover up or even if come to terms with the competitors? So what are the key gaps you want to fill in the next upcoming 2 to 3 years?
So the priorities are going to be all the 3 segments. As we always mentioned, our growth is going to be driven by the nutraceutical as well as on the food side of the business, biocatalyst of the business and the animal feed. So these are going to be our key focus areas. Those are going to drive the growth. We will be introducing new products as we move on into all of these areas, and we are working on all of those areas. So that's going to be our key priority.
The next question is from the line of Harini Dedhia from Tamohara Investment Managers.
I had a couple of questions around growth. So if you can help us understand what [indiscernible] Indian geography where we saw a flat quarter, because even in biocatalysts, we've seen a de-growth, which is supposed to be one of our growth engines. Just trying to understand -- is it just a quarter phenomenon or what is going on over here?
Generally, the first quarter is always a little bit subdued, but we shouldn't really look into it as a quarter-on-quarter basis.
But even year-on-year, it's been flat -- the India business. So which piece in the India business has sort of not worked out for us?
India business is supposed to be under pressure this year, particularly on the Human side. Most of the growth is supposed to come into the second half of this year.
Okay. And that will also come from the Human side itself?
Yes. On to some of the biocatalyst areas.
Got it. And on serratiopeptidase, this has been another quarter of de-growth. So what is exactly happening in this market? Why are we seeing de-growth over here?
Last quarter in FY '24, probably pharma companies have picked up more stock, so some impact in the Q1.
Got it. And in the Asia market, again, we were expecting growth driven by Animal Nutrition, that was the conversation in the Q4 call. So should we read something into this quarter's number or that will resume again in Q2, Q3 onwards?
We shouldn't really look into it quarter-on-quarter basis as of now. I would say that the quarter-on-quarter numbers on Animal Feed or any area cannot give you the story.
Okay. Got it, sir. So sir, when I look at the overall growth of the business, we've seen a lot of growth to come from U.S., which is typically a high-margin business, especially in Q1. So do margins still have room to expand from here on? Or with the U.S. growth also we're doing these margins, so we pretty much see similar 33%, 34% margins going forward?
I think 33%, 34% is what probably one should look at it now as of now.
Got it. So only when we see rest of the geographies contributing a little more, will we see some expansion here?
Right. As international sales goes up, probably you will see some better margins. And for that, I think we will have to wait a couple of more quarters.
Okay, sir. But for the whole year, we would still expect that 12% to 14% kind of growth on the whole year basis to come through?
Yes. Right.
The next question is from the line of Abhishek Navalgund from Nirmal Bang Equities.
So some of the questions related to growth have been already answered. But just wanted to understand, sir, while you talked about some sort of destocking maybe this quarter in serra, what sort of underlying growth we should assume going forward considering you're already a domestic leader here?
So if you talk about serra business, we don't expect a lot of growth to come. It should be a more or less flat business or maybe like 5% here and there, the growth has to come from the other segments, what we're working on.
Right, right. So since serra still is the largest product in terms of overall size, so if serra is expected to grow at, let's say, 5%, 6%. I mean, the large part of the heavy lifting has to be done by the International Human Nutrition. So on that side, in terms of quarterly run rate...
Biocatalyst areas in the Indian side.
Biocatalyst on the Indian side. But honestly, the run rate on the biocatalyst hasn't picked up on a consistent basis. So what sort of growth do you expect from the biocatalyst? Are we in a position to launch some new molecules on the biocatalyst side in India?
Yes. So we are really working on those, and we expect like some of the thing has to come up in the second half of this year.
And the margins on the biocatalyst and maybe the International Nutrition business are more or less similar? Or international are much higher as compared to the biocatalyst? Even the gross margin, just an indication, yes.
I think as far as comparing the margin is concerned, it all depends. Even in International market now, like a couple of new products are being introduced. So initially, the margin there is different. But yes, I mean, international business, we get better margins.
Sure, sure. And on the cost side, while on the other expenses, if I see on a sequential basis, there is no increase as such, but any comments on freight cost or it gets netted off against revenue? Just more clarity considering the Red Sea issue, ongoing Red Sea issue?
Freight cost is slightly elevated.
Sir, possible to give the number? I mean, is there any major increase or not major increase [indiscernible]?
It's not [indiscernible], because freight -- like what happens once you realize that the issue is now with the logistics. So you always insist that freight is something the customer has to bear.
Right. So the reason I'm asking is, during COVID year also, we have seen supply disruption. So both in terms of RM pricing as well as freight. So some part of it, we could not pass it on entirely. So from that angle I'm asking whether it is a complete [indiscernible] or there could be some burden on us in coming quarters?
[indiscernible] some burden is there. If I compare on year-on-year basis, probably the freight cost is up by about INR 5 million.
Sure, sir. And last question, just to refresh my memory. I mean that R&D facility, which is going to come up, any commissioning or time line we have shared earlier? I'm not aware of that.
No, we haven't shared. But as of now, like we feel in the -- after the June of next year, it should be in a working condition.
June of next year, right? So no major CapEx, so like INR 25 crore, INR 30 crore CapEx this year and next year is what we should be doing?
Roughly same amount.
Okay. Last question, sorry. Anything on the potential M&A that you're looking at? Any development there?
No. I mean, as of now, I don't think any development. But yes, we keep on working on that.
Nothing is concrete as of now, which we can...
The next question is from the line of Shrinjana Mittal from RatnaTraya Capital.
I have two questions. One is on the product side. So like you mentioned that our biggest product, the anti-inflammatory product. So that is degrowing, and that's expected to be like that. So can you just help me understand that is it the nature of the business that once we introduce a molecule, after a certain period, either there are many other players which come in, because of which the sales become flattish and then we try to add more products to cover up for the growth?
Or like what is it? And the second part of the question is, so currently from our product basket point of view, how many new products do we have in line? What is the stage in terms of application approvals and everything? So just some color on that.
So here, like we always have to work on the two areas. One is, always improve the productivity. That is a constant feature in our business, and the second one is the new product. There are a lot of different new products, which are under the pipeline. And that is how you grow.
Now if we talk about anti-inflammatory product. That is a very old product. In terms of product cycle, we started it somewhere around 1999, 2000, and it's still there. So it will not die as such but, yes, at some point of time, there is always -- when you are always leading 90%, 95% of the share when you command into that, there is going to be some problem.
Understood. And when you talk about the new products, which are into pipeline, what would be the duration of that pipeline, like in terms of the application approval and then finally, commercialization? And how many such products would be there in the pipeline?
If you ask me, there are about 50 products which are there in different areas, into different molecules as of now into the pipeline. But generally, the cycle is at least 1.5 years to 3 years, right? So some of them are like getting into the final stages now.
And just one more question on the employee cost. So is this quarter is supposed to be the annual increment cycle for us? Because the employee cost has sequentially increased a bit, and it seems like that's generally the case. Is that the reason?
So I think first quarter, the incremental cost has come. But yes, for a couple of subsidiaries, probably that will happen in the second quarter, that happens from 1st of September also. But major -- I can say 80% incremental cost has already been absorbed. So you can go -- considering this particular quarter as the basis for annualization of your overall payroll cost.
[Operator Instructions] The next question is from the line of [ Nitish ] from ChrysCapital.
My question is actually a follow-up to a question asked by an earlier participant. We said that we are confident of doing 12% to 14% revenue growth in this year. So that means we'll have to do around INR 185 crores to INR 190 crore a quarter in Q2, Q3. So I just wanted to ask, do we have any visibility on Q2 since we're halfway there already?
So in the beginning of the year, we do the exercise of the sales and from which part it will come up, and we map the sales with all the customer wise and growth area wise. And even though we don't have a very long-term visibility with the customers, but we can always see how it is going to span out in a year. Based on that, as of now, we feel that we should be able to do it because most of the sales have to come into the second half of this year.
Okay. And on the margin outlook, considering we're already at 33% in first quarter, which is typically a low-margin quarter for us. So should we expect Q2, Q3 to be having a better margin?
So I mean -- the numbers will improve going forward. There will be certainly some kind of incremental margins. But as of now, I think 33%, 34% is what we are saying is something one should look at it.
But the -- it's right to assume that we could be closer to the 34% of this band.
Yes.
The next question is from the line of Kiran from [indiscernible] Capital.
A couple of questions from my side. Sir, apart from the anti -inflammatory enzyme product that we have, it's about INR 100 crores sales year-on-year. Do we have a start to -- the next 2, 3 products, which have a potential to go to INR 100 crore revenue? Or is it more like a segment like a biocatalysis or Animal Bio-Processing or something -- a segment as such goes to INR 100 crores. How do you look at it? Are there any -- the next serra kind of products -- 1 or 3 products which can go to INR 100 crores by themselves or is there a segment?
So our business has to be seen with the different way. One of them is like API, where serra is there, which is more than INR 100 crores as a product as of now. But there are a lot of formulations which we are launching, and we are focusing on them, and probably those should be more than INR 100 crores going forward.
Got it. Got it. And most of these formulations are primarily in the U.S., if I'm not wrong?
That is true. We are working a lot [indiscernible] those formulations and improving those formulations going forward.
Got it. Got it. Got it. Second question, sir, our B2C segment, the WELLFA brand. I just want a clarification and then a followed by question, which is WELLFA brand is under SciTech, which is our 50% subsidiary. And then, how is it growing? And can it become a potential INR 100 crore, INR 150 crores in the next 1 to 3 years as you see it right now, of course, there can be changes, but as you see it right now?
So WELLFA brand is under the Advance Enzymes right now, not under the SciTech. But as of now, I don't want to comment how it is going to pan out into 2 to 3 years down the line, but we feel that this year, we should be having about INR 2 crores to INR 3 crores sales coming from the WELLFA brand.
INR 2 crores to INR 3 crores. Got it. Got it. Got it. Okay. Sir, then the commentary from some of the U.S. and European players in the segment that we are in, they have had a lot of commentary that U.S. and Europe consumer slowdown is significant and even our Nutraceutical segment or the Human Nutrition segment, they're talking about other segments as well where we are not there. They're seeing a severe slowdown in terms of consumption and buying patterns in the U.S. and European markets. So from where you are sitting as a vantage point, have you seen the slowdown? Or are you seeing the slowdown in terms of buying and purchasing patterns in the U.S. and European markets?
European is a little bit slowed down as of now. That is what we can see. In terms of U.S., probably we are growing into these areas, because our sale was very low on the consumption side.
Sorry, sir. I didn't understand the U.S. market comment.
So U.S. market, we have seen growth if look at our number for the Q1 as compared to Q4 as well as Q1 of the last year. And [indiscernible] whatever understanding we have from our U.S., we see that, this year, we are going to have a better growth from the U.S. business. This is the scenario as of now. Now when you are talking about the spending, probably what is happening is, it is on a different part of it -- on the consumer side of it.
Nutraceutical segment, again, there are different issues. So I mean, our business where we are catching to primarily on B2B first and then B2C is very small business. So here, still we see that there is an opportunity and growth is there in this market. So unless really we see the impact from those who are on the field and selling the products, which are formulated or finished goods from our formulations. So that impact so far, we have not seen.
Perfect. Understood. My last question, sir, Mr. Vasant Rathi in the AGM mentioned that somebody asked a question in the AGM, and he said, we probably will reach INR 1,000 crores in sales very soon and all that stuff. So is there any definite pathway that you can tailor that Human Nutrition will be INR 300 crore or Bio-Processing will be INR 300 crores, whenever that we reach the INR 1,000 crores sales. Right, maybe 3 years, maybe 5 years?
Of course, I mean, that has been really mapped and we have done a lot of work on that area, and that is that the Chairman has commented that, in down the line 4 to 5 years, we target to achieve INR 1,000 crores of revenue.
Got it, sir. And which segment do you think will contribute the most to that growth from INR 600 crores to INR 1,000 crores. Because that's a delta of 400. In our area, it's quite a large number. That's the reason why I'm asking.
You need to work on to the 3, 4 different horses, right? When we talk about INR 1,000 crores, you need to work on the INR 1,100 crores, INR 1,200 crores, and then you can reach the INR 1,000 crores, because 1 or 2 will falter. As of now, like -- because it's more like on our R&D side and R&D driven. As I was telling, like most of the enzymes when you do it, the research is for 1.5 years to 3 years.
So it takes some time. It's very difficult in our areas like to exactly predict the number, it will come from this area or this area. Some may not work out. So it's difficult for me to say that the INR 300 crores will come from this segment or for example, from this product.
Got it. My last question is a clarifying question, bookkeeping. Last year, we had a one-off of INR 18 crore expense due to a legal settlement with one of our U.S. competitors. Is there any other legal expense or legal settlement that we are expecting in whatever, this year, next year, next 2, 3 years? Is there any particular conflict that we have as of today?
No. As of today, there is no conflict. But you never know.
As of now, there's nothing.
[Operator Instructions] The next question is from the line of Pavan Kothari an Individual Investor.
Yes. Sir, I would like to -- this is Pavan Kothari, I would like to ask you if we are having any export thrust to Europe also? And what capacity are still underutilized as of now, like how much of operating capacity are we currently working at?
So current capacity utilization is around 50% to 55%. And if you really look at the numbers -- so our export sale is now generally in the range of 50% comes from the international market, 50% comes from the domestic market. It keeps on changing. Sometime it is 48% to 52%, sometimes it is 50%-50%. That's how it is on a quarter-on-quarter basis.
With the incremental sales, suppose our capacity has been utilized from 50% to 75%. How much of the cost benefit are we getting with the more capacity utilization?
Yes, Pavan Ji, that will -- as you speak and you might have done a proper study. If you really look at when our sales, I mean, the revenue increased by 1%. Generally, I have seen that the EBITDA increase is 2x to 3x of increase in the top line, and that adds substantially to our PAT also. So definitely, expenses increased -- the more revenue you generate, the profitability definitely will change, it will improve substantially. In terms of numbers, I mean, when you look at 1% increase in revenue, 3% in EBITDA, 3% impact. So that is how generally we have observed in our...
Right. And a very small question, sir. Are we selling online also, like on Amazon and other online big portals or are you just selling it like on the...
Yes. So there is the WELLFA brand basically. So we are expecting some kind of -- now good numbers in that sense. The last, I think, 1 year -- 2 years back, we have launched this. Now this is second year in succession. So we are getting good numbers in that sense.
Sir, I congratulate you once again on the good set of numbers this quarter.
The next question is from the line of Shubham Sehgal from SIMPL.
Sir, we've always been an R&D-focused company. And as you mentioned, R&D is quite important for us. So this 3% to 4%, which we are maintaining as an R&D expense, how exactly do we allocate our resources? And what are our key focus areas and priorities?
Like, if you could help me understand, how exactly are we spending our R&D budget and maintaining a 3%, 4% and which segments do we give priority or which are the key focus areas we are giving priority?
So it is always on the 3 and 4 segments where we have our strength and where we see that the potential is really excellent going forward. And so these are areas where we spend our money, on R&D. So we continue.
But so I mean, those segments -- where exactly do we spend [indiscernible] where do we actually [indiscernible].
I mean, if you really see enzyme -- enzymes are very unique. So when you are developing the enzymes, it is not for a particular application, okay? So those are kind of -- the development takes place and thereafter, once you reach to a particular threshold, then you look at whether I can also develop application in, say, Human Nutrition, in Animal Nutrition, can I use for Nutraceutical segment.
So that happens subsequently. So you need to really spend on core research where you don't have that kind of understanding that, yes, I'm going to work only on this animal nutrition area. You work on your core strength basically.
Only the enzymes which are -- only in the area of biocatalysts are more specific.
Okay. Got it. And so last question means that, what exactly is our edge or advantage in the Human Nutrition space as in the last 4 years, we have narrowed down our focus on the Human Nutrition?
So this is the business which we have started long back. I think if you really look at the -- you might have read the biography of our Chairman also. He is in U.S. So we started long time this particular journey where Human Nutrition what kind of initially we begin. And over a period of time, we developed so many enzymes around that, and that is because of his expertise in that particular space.
So we are very strong on Human Nutrition side. And over a period of time, of course, Human Nutrition -- when you are talking about human health. So Animal Health is another area which is kind of coexists in that sense. So that is another area. And then now when you look at the food, the Bio-Processing is another segment, because, again, now everything is going around -- a novel application of the enzymes in the food areas. So this is completely a subject which is very close to us. And we have spent a lot of -- I can say, last 25 years, a lot of R&D has been carried out on human nutrition, food, [indiscernible] and animal nutrition.
So we know we are very strong in that, and we have kind of in past some of like clients have been added over a period of time. So that speaks about that, yes, it is a sustained growth in the client portfolio with us.
[Operator Instructions] The next question is from the line of Shreyans Gathani from SG Securities.
So my question is mainly on the R&D front. So historically, we've mentioned we want to have R&D as 7% of the sales as such. But like on a consolidated level, we typically have been doing around 4%. So is that something that we should be expecting to go up in the future? Or should we just look at this number as is currently.
So Mr. Gathani, the CapEx is not much if you really look at in this area because now whatever CapEx we are doing is on our research and development center at Nashik. It is in CIB currently, not added to the expenses side of it, capital expenditure as such. So it is kind of a work in process, which is going on.
So once we add that amount, probably the spending is about 5% to 6% in any case. But yes, I mean, when you really prepare a sort of model, you can look at about 6% as our total R&D spend on a consolidated basis.
Got it. Okay. So what would be the expenditure already incurred on the center up to now?
I think we have roughly spent about INR 15 crores.
Okay. Got it.
INR 35 crore is something, sorry, I have not added the land. Land, this is about INR 35 crores we have spent. And another INR 15 crores is kind of another expenses on civil construction, which is under progress.
Okay. So that's INR 50 crores. So I thought that was the total spend that we've envisaged earlier for the same period.
Sorry, the land was acquired 3 years ago I think.
It's somewhere around in COVID period, 2017, '18.
Okay. Got it. Okay. So my next question is around evoxx. So we mentioned that as an R&D arm of the company as such, so do we consider that portion into R&D? Or does that evoxx sales come into like actual [indiscernible] mentioned [indiscernible] in the expenditure numbers or not yet?
And second question on that is like we initially -- evoxx had some partnerships with certain companies for some product development. Is there any update on that? Or that's pretty much was on a low key for a while. Just trying to understand if there was any movement on that side.
So evoxx -- since it's 100% owned company, the numbers get eliminated on the consolidation basis. So they don't come up in terms of R&D numbers. In terms of partnerships, there will be 2 types of models. One model is like some of the evoxx products sale. Some of them is like our R&D and some of them is like CRO kind of customer-related R&D to sustain the expenses side of it. So there are certain customers which we are talking, and that is what you are referring to. As of now, there is one big order is under the discussion, negotiation that is yet to be finalized. So I can't comment on that.
Got it. So there's one order under sales. So when do we expect that to close by if it is successful?
Over the next 15 days, but we'll come to know once it's done.
Okay. And could you quantify the size if that's possible or not yet?
Not very big, but it will be about EUR 1.4 million to EUR 1.5 million.
Okay. That will be executed over a period of 1 year or so or...
Yes. One year or so.
The next question is from the line of [ Kiran B ] from [indiscernible] Capital.
So just trying to clarify, we've always committed on 15% growth, CAGR, over a number of years. But just for this year, I missed the last 2 con calls. What is the outlook or visibility that you've given?
So this year, we should be somewhere around 2 digits, somewhere between 12% to 15%, something of that nature. This year, it is going to be a little tougher for us. But this is what like we feel we should be able to get.
Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to Mr. Ronak Saraf for the closing comments.
Thank you, everyone, for taking your valuable time for attending our earnings con call. We will keep you posted for any further updates. I request you all to kindly send in your questions that may remain unanswered. An audio recording and a transcript of this call will be uploaded on our website in due course. Looking forward to host you in the next quarter, till then stay healthy, stay safe. Thank you.
On behalf of Advanced Enzyme Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.