Advanced Enzyme Technologies Ltd

NSE:ADVENZYMES

Earnings Call Transcript 2023-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Advanced Enzyme Technologies Limited Q2 and H1 FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Ronak Saraf from Advanced Enzyme Technologies Limited. Thank you, and over to you, sir.

[Ronak Saraf, executive]

Good evening, everyone. Welcome to the Advanced Enzymes Q2 and H1 FY '23 Earnings Conference Call. I'm Ronak Saraf, the Manager of Investor Relations here at Advanced Enzyme. We hope you all have gone through our financials, press release and the PPT, which has been posted in the Investor Relations section of our website.

We have with us Mr. Vasant Rathi, Chairman; Mr. Mukund Kabra, Whole-Time Director; and Mr. Beni Prasad 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 request you all to please read the forward-looking statements contained in the PPT. 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.

With this, without any further ado, we shall commence this call. Over to you, Vic sir.

[Vasant Rathi, executive]

Thank you, Ronak. Good evening, everybody. It is my pleasure to join you for this conference call today. I really appreciate you and all of you taking some time, and I welcome you all to the conference call for this quarter and half year ended 30th September 2022. I hope you all enjoyed the festive season well.

Last few quarters saw an intense macroeconomic volatility across the globe after a rough start of the season. Disruption continued in the business environment due to elongated pandemic situation and geopolitical crisis, inflationary pressure sustained on the raw material prices, power and fuel, logistic costs. The supply chain issues which were going on from the last couple of quarters remain unresolved.

Despite all the uncertainties, our Q2 financial results demonstrated an improved top line growth, although our operating cost remains elevated, which impacted our profit margins. The growth in the quarter 2 numbers are driven by Human Nutrition, Animal Nutrition, which are our fundamental sections and Bio-processing segments. We hope these hurdles easy soon and we further move towards a favorable business environment.

Now as far as the quarter performance, our top line stood at INR 1,387 million, grew 15% on a sequential basis. And on a year basis, we have grown about 9% in quarter 2. Our EBITDA stood at INR 397 million, grew by 28% on a sequential basis while it declined by about 20% on a year-on-year basis.

We have experienced a strong growth of 49% in the bottom line on a sequential basis, while it declined 13% year-on-year. On the margin side, EBITDA margin stood at 29% and PAT margin stood at 19% as our overall margin improved dramatically on a sequential basis, but remains subdued on a year-on-year basis on the account of elevated operating costs.

Human Nutrition -- talking about various different segments, human nutrition segment remained the highest contributor as usual at 68% in the revenue, grew by 16% on a substantial basis and 2% on the year basis. On half year comparison, it declined by 4%. Pharma, API and biocatalysis in domestic markets and probiotic international markets primarily driving this growth in the human nutrition. Very soft human nutrition business as an impact of [indiscernible].

Animal Nutrition, we always state that animal nutrition segment is one of our future growth drivers and it contributed 12% to the revenue. This segment is continuously improving from almost 2 consecutive quarters. It grew by 27% on a year-on-year basis, 10% on a sequential basis and 19% on a half year basis.

In the Bio-processing area, the Bio-processing segment contributed 14% to the revenue. It grew by 63% on the year-on-year basis, 5% on a sequential basis, but food and non-food business grew by 64% and 61% respectively on a year-on-year basis.

The Specialized Manufacturing segment contributed 6% and grew by 28% on a sequential basis, a negative 14% and 36% on year-on-year and half year basis respectively. We are delighted to announce that we [indiscernible] INR 50 million for a 50% stake in Saiganesh Enzytech Solutions. The company will now have uninterrupted supply of one of the important digestive enzymes with consistent quality, which will help the company to provide better and regular offerings in relation to the formulated solution for human health and nutrition and food industry. Apart from the [ HC itself ], we have also acquired an additional stake of 4.83% in our subsidiary JC Biotech, which is over and above our existing [indiscernible].

With this, I will now hand over this call to Mr. Beni Rauka, who will walk you through the financials and key subsidiary numbers.

[Beni Rauka, executive]

Thank you very much, sir. Good evening, everyone. I hope you all are in good health. The COVID lockdowns may be behind us but the havoc it triggered in the entire supply chain is still causing pain. As Vic had rightly mentioned, the inflation in the input materials supported by operating cost remained elevated but recently we hope that things will ease in soon.

Now on the company's financial for the second quarter 2023. On sequential basis, Q-on-Q, our revenue is increased by INR 176 million, a 15% growth from INR 1,211 million to INR 1,387 million. Our EBITDA is increased by INR 88 million, 28% growth from INR 309 million to INR 397 million. Now it's about 29% of our revenue as compared to 26% in the previous quarter. Profit before tax has increased by about INR 105 million, which is about 44% growth from INR 237 million to INR 342 million, which is about 25% of our revenue as compared to 20% in the previous quarter.

Our tax has increased from INR 176 million to INR 263 million, increase of about INR 87 million, which is about 49% growth and is about 19% of our revenue as compared to 15% of our revenue in the previous quarter. On year-on-year basis, the revenue is increased by [ INR 116 million ], which is a growth of about 9% and EBITDA margin has gone up, and now it's about INR 397 million from INR 493 million, so there is a dip of about 20%. Profit before tax has decreased by about INR 71 million and PAT is decreased by INR 40 million from INR 303 million to INR 263 million.

The performance for the first half of the year as compared to the first half of the previous year, the revenue is decreased by about 2%, INR 43 million from INR 2,641 million to INR 2,598 million. EBITDA is decreased by 4 million from INR 1,120 million to INR 706 million. Profit before tax has gone down by about INR 382 million and profit after tax is also decreased by about INR 262 million from INR 700 million to INR 438 million.

I would like to give some reasons why the EBITDA margin is down. So this is because of a couple of reasons, the first one, as you all are aware, the impact of inflation on the raw material side. And in addition to that, the product mix also is very important in our case, that has also impacted. And in addition to that, the cost of other inputs like power and fuel is going up, and there is additional expenses now because now the things are becoming normal. So travel cost has gone up, lab expenses has gone up, [indiscernible] has increased. So all these expenses which has increase, so that has impacted our EBITDA margin if I compare on quarter-on-quarter basis.

And in addition to that, if I compare the EBITDA margin on year-on-year basis, the major impact, as mentioned earlier, is one, because of the increased input cost, be it raw material, power and fuel and lab expenses, stores and freight. And in addition to that, we have also taken into consideration the mark-to-market valuation, this is fair market valuation loss of about INR 43 million when I compare year in -- year-on-year increase in my other expenses.

On YTD basis, the EBITDA margin is down from 42% to 27%, mainly because of the lower growth contribution due to the increased input cost. And payroll cost is up by INR 32 million and higher expenses, as mentioned earlier, the mark-to-market loss of about INR 76 million. And in addition to that, the consulting charges, power and fuel expenses, lab expenses, travel, sales and promotion activities. So all these expenses are higher than the previous 6 months of FY '22.

When talking about our subsidiary number, JC Biotech revenue stood at INR 137 million with EBITDA of INR 14 million, PAT of INR 5 million during this quarter, which is 9% lower than the previous quarter on year-on-year basis and for Q-on-Q basis it is lower than by 6% and PAT margin is lower than by about 29% on Q-on-Q and on year-on-year, that is about 80%. Evoxx is EBITDA positive. So revenues stood at INR 48 million. EBITDA of INR 4 million. [ Sai Tech ] numbers are -- top line, the revenue has improved from INR 56 million to INR 84 million, but the EBITDA is still negative in this quarter also. And due to higher depreciation and interest cost, the PAT is negative of INR 8.5 million as compared to INR 13.7 million during the previous quarter.

The sale of our largest product, which is our ant-inflammatory enzyme, stood at INR 352 million as compared to INR 268 million in Q2 of FY '22. So this constitute about 25% of our revenue as compared to 23% in the previous quarter. And the corresponding second quarter of last year, it was about 21%. Top 10 customers contribute about 28% of our revenue as compared to 30% in the previous quarter. And on the corresponding Q2 of FY '22, 31%. Our B2C segment contributed sale of about USD 1.11 million as compared to USD 1.62 million during the same period previous year.

Our R&D expenses have gone up from INR 100 million to INR 148 million in 6 months. And if I compare with the previous quarter, for Q2 it was INR 56 million, and this time for Q2 it is about INR 72 million. So R&D expenses constitute about 6% of our consolidated revenue as compared to 4%. So this is what is from my side.

Now we shall open the floor for question-and-answer session. The floor is open.

[Operator]

Ladies and gentlemen, we will now begin with the question-and-answer session. [Operator Instructions] The first question is from the line of Nikhil Mathur from HDFC Mutual Fund.

[Nikhil Mathur, analyst]

So my first question is on a comment you made initially that margins are impacted a bit by product mix. Do you mind elaborating a bit more as to what are the key segments [indiscernible] are performing in? And do you feel that in the coming quarters and in FY '24 there can be a reversal on the product mix side?

[Vasant Rathi, executive]

Nikhil, your voice is not clear. Can you please repeat?

[Nikhil Mathur, analyst]

Am I clear now? Is it audible?

[Mukund Kabra, executive]

Yes, audible, but this is kind of distorted voice.

[Nikhil Mathur, analyst]

I'll just switch out from my headset, just give me a second please. Better, sir?

[Vasant Rathi, executive]

Yes, please.

[Nikhil Mathur, analyst]

Sir, my question was on the comment you made in your opening remarks around product mix impacting gross margins. Can you please elaborate a bit more which particular segments are kind of underperforming, which is leading to the gross margin pressure? And what is the outlook for second half FY '23 and also for FY '24? Do you believe that there could be a reversal in store on the product mix side?

[Vasant Rathi, executive]

Nikhil, the usually industrial segments do impact the margins definitely. And you will see that our international sales, particularly in U.S. has impacted this year quite a bit and that also reduces the margins.

Overall, also, besides reducing the margins in those 2 areas, of course, we are spending a good deal of money also in the R&D. R&D expenditure has gone up by 2%. And more and more will be investing into research and development. So -- but I think your question is mix reducing the cost, impact the cost, that is because of the industrial sales, which has considerably gone up.

So Nikhil, it's always a percentage when we talk about. So when you really look at it, nutraceuticals sales is little bit down because of the inflationary pressures right now. So other sales are on the higher side, and those like make the mix and match on the margin side.

But speaking about like what will be the second half and the next year, we already like communicated earlier also that we are a R&D company. Our research is continuously going on. And as we move on, we will like improve our margins as on quarter-on-quarter basis, and we are working on that. When if you look from the last quarter to this quarter, our margins are better. We are continuously working on it maybe 2, 3 quarters, 4 quarters down the line. Our target has come back to our original margins, EBITDA margins of between 40% to 48%.

[Nikhil Mathur, analyst]

Right. Sir, if I remember from the last con call, I mean, in fact, in the last 2 quarterly results, you have highlighted destocking in the probiotics market and maybe lower probiotic sales is what is impacting margins. So any color you can share on how that market is shaping up from Advanced Enzyme's perspective?

[Vasant Rathi, executive]

So we always talk about that there are 2 types of probiotic markets which we have, the long-term market which we want to do is our own branded market, right?

And that market is like already like [indiscernible] on the international side. On the domestic side when we're talking about as the bulk market, those are on a lower price. So it's a mixed picture at this point of time. But overall, if you really look at it, we have done much better on the pharma side. On the India front as well, our AGL front, but because of the inflationary pleasures the nutraceuticals sales are down, which we will -- which we'll be recording in the next 2, 3 quarters?

[Nikhil Mathur, analyst]

Understood. And sir, when you say that your margins you are targeting to go back to the normal levels, is there any explicit cost reduction that you are building in that expectation or this entire margin movement will be driven by better mix and better sales growth? So if you can help me understand what were the drivers of margins hereon.

[Vasant Rathi, executive]

It's a combination of all. Like it will be the increase in the sales, it will be improved on the productivity, and it will be reduction in the cost. So we are working on all the fronts. Like we continuously work on employing our outputs that is the cost as well on the raw material side. We always -- we are also working on improving the top line, and that will also make [indiscernible] margins.

[Nikhil Mathur, analyst]

Got it. And sir, one clarification. Sorry, I missed the number that you shared on MTM losses and other expenses. Can you reiterate those numbers, please?

[Vasant Rathi, executive]

So the mark-to-market losses?

[Nikhil Mathur, analyst]

Yes.

[Vasant Rathi, executive]

So Rauka, if you can take that please.

[Beni Rauka, executive]

Yes, yes. So the fair market valuation loss is about INR 10 million in this quarter. And in the last quarter, it increased to INR 43 million. And total for 6 months, it is about INR 76 million. So in other expenses, it is sitting -- overall, if you see the other expenses for 6 months has gone up by about INR 414 -- I'm sorry, I'll just come back with the numbers.

The other expenses has gone up substantially by about -- I think if you see the EBITDA, which is down by INR 414 million. So INR 203 million is our other expenses increased in 6 months' time, which comprises of INR 76 million of mark-to-market loss.

Other expenses, the consulting charges, professional fee expenses has gone up by about INR 34 million. And power and fuel cost is up by INR 27 million. And our lab expense is up by INR 15 million. So this combination of various expenses increased due to the inflationary trend as well as the business is picking up, so definitely a lot of expenses on travel, sales promotion, and a lot of activities of lab-related, a lot of [ QC-related ] work is to be done. And even like [indiscernible] and taxes are up because of the increase in sale of our exempted products. So GST expenses is also gone. The total overall INR 203 million is the increase in other expenses, if I compare the 6-month number of the previous year.

[Nikhil Mathur, analyst]

Right. And pardon me for a very short-term oriented question in a very volatile environment. But with 15 months -- 1.5 months gone into this quarter, do we expect that these other expenses should start normalizing from this quarter itself? Or we are still 1 or 2 quarters away before the impact is visible?

[Vasant Rathi, executive]

No, this is going to normalize in this quarter at all, okay? It will take 2, 3 quarters.

[Operator]

The next question is from the line of Vaibhav Badjatya from Honesty and Integrity Investment.

[Vaibhav Badjatya, analyst]

I mean, we understand the adverse pressure on the margins because of the product mix. But in terms of product-by-product gross margins, do you think that has contracted or improved sequentially as compared to last quarter? I'm not asking for a specific number, just a broad commentary on our top 3, 4 products has seen sequential improvement in gross margin or not?

[Vasant Rathi, executive]

So if you really look at it, Vaibhav, our EBITDA numbers is improved on a sequential basis, our bottom line is improved, our sales are improved and on percentage basis also it's improved. That itself says that sequentially, we have done quite a big progress.

[Vaibhav Badjatya, analyst]

So I understand EBITDA has improved -- EBITDA margin, but what I was talking about was gross margin. So if I look at your gross margin minus raw material cost, that sequentially, that is...

[Vasant Rathi, executive]

That also is plus.

[Vaibhav Badjatya, analyst]

Numbers doesn't suggest so. It shows that your RM cost as a percentage of sales has increased from 22.4% to 24.2%. So gross margin has worsened as the numbers.

[Vasant Rathi, executive]

I think there is some increase in the inventories. Rauka ji?

[Beni Rauka, executive]

I mean he's saying -- he's talking about only input cost raw material. In terms of the percentage of revenue, I think he is right, absolutely, that it shows like from 22% to 24%, there is an increase in the input cost. But what we are trying to say is that this increased cost is fine because other than that, if you really see other expenses, which are showing some downward trend because whatever increase has to happen in the cost of various power and fuel, employee cost and lab expenses, most of them has already taken place. So overall improvement in the EBITDA margin.

Now the specific question about whether the gross margin on some of the product is gone up or on a sequential basis. It all depends where we have higher sales because you know we cater to human nutrition and animal nutrition, food processing. So sometimes in a particular quarter, the sale of that particular product, which might be testing, better margins may not be there. So that will keep on happening. So I mean, to give you a precise number, it is not possible, frankly speaking, for one and year two projects.

[Vaibhav Badjatya, analyst]

Right, right. Yes, I understand that completely. And that's why I was not asking for [indiscernible] numbers. So -- but on a broad basis, so if I see you are -- obviously, one source of improvement in margin is basically our scale and the operating leverage that will drive and employee cost and other costs because of that. But if I look at your gross margin, that -- so now from FY 2018 -- '17, '18 gross margin was always -- so your raw material cost was always around 20%, 21% of the sales. So that has increased to, say, 23%, 24%.

So that 3%, 4% margin compression that has happened is what I was trying to understand that is it due to some of the pricing reduction that you have taken? Or is it due to the mix -- only the mix change between the products that has happened? That's where I was trying to understand.

[Beni Rauka, executive]

I understand your point. I mean if I look at the increase in the prices of the input, I mean, raw material, probably the impact is about 1% to 1.5% of our revenue. This is only because the input cost has gone up.

And in addition to the impact of product mix, like you have the products which is getting higher margin that impact is probably from 5% to 4%. So that's what exactly you see the variance in the raw materials. This has gone up, say, from 18% to 23%.

[Vasant Rathi, executive]

And it might be increased because of the -- some of the output has gone up, so it's an impact. What you say is only like 3%, 4%, but on an overall basis, the impacts are much bigger.

[Operator]

[Operator Instructions] The next question is from the line of Rohit Sinha from Sunidhi Securities.

[Rohit Sinha, analyst]

Congratulation for decent set of numbers. Still, we have seen some improvement on the top line as well on the margin side this quarter. So going forward, I wanted to understand that this recovery in the revenue and also on the margin side, how we should see the coming 2 quarters?

And in the past few quarters, we have been talking about the higher logistic costs, which are impacting the margins and now since we are seeing that the logistics cost or rates are coming down, so that would be also going to help us on the margin front? Or it will take some more time to reflect a decent margin expansion?

[Vasant Rathi, executive]

Well, Rohit, we can see some changes is happening in the logistics side, the cost is coming down. We are seeing still pressures on the cost going up in the labor market. Raw material market is somewhat softening, international conditions are mixed to say the least, and inflationary pressures are still pretty high globally.

So the overall -- people are still working out their inventories, all of the inventories and very cautious about ordering. This thing will take, I believe, a couple of quarters more until the market settles down. But we see a trend is trending positively, definitely in the right direction.

[Rohit Sinha, analyst]

Okay. Okay. And on the Sai Tech business, I believe there is some -- I mean, this quarter numbers were slightly lower. So that actually -- once that will cross, I think INR 100 million or similar kind of range mark on a quarterly basis, then it would be a good contributor in the EBITDA side also.

So this quarter, as you said that at EBITDA, it was reflecting on the negative side. So -- but can you get the number? And what is the factors which are actually affecting Sai Tech's revenue growth?

[Vasant Rathi, executive]

So, the numbers, Rauka ji, can you share? So Sai Tech's revenue INR 34 million, which is down by 15% on a year-on-year basis. EBITDA is negative minus INR 3 million and PAT is [indiscernible] negative minus INR 8 million. Sai Tech is going through a very tough patch, rough phase right now, with all the [indiscernible] and other businesses on a lower side provided this is the toughest time in the Sai Tech's history. Maybe it will take another 2 quarters to really recover.

[Rohit Sinha, analyst]

Okay. And what kind of inventory built up at the customer level or at other ends you are observing? Because post COVID, we have been talking about a certain pent-up demand for a lot of products, and that has probably led to some inventory stocking also?

[Vasant Rathi, executive]

It's a mixed picture. At some places, like particularly into the nutraceuticals areas, you'll find a lot of people there are lot of [indiscernible] into the [indiscernible] side or other rate instruments. So people are carrying lot of inventories. At the same time, like some of the products, there are like shortage of the products. So it's always the mix picture, but it is really hampering us on the nutraceutical side.

[Rohit Sinha, analyst]

Okay. Okay. And one last question from my side. I actually missed out on the opening remarks for this new acquisition. So if you can just elaborate on the thoughts beyond that.

[Vasant Rathi, executive]

It's just a nice addition to our overall concept of total service to our customers [indiscernible]. This will enable us to develop even different [indiscernible] clients and service or nutraceutical as well as the industrial market as well.

[Rohit Sinha, analyst]

Okay. And any number on the revenue side or margin side we can get for this business?

[Vasant Rathi, executive]

No, it's not going to be impacting the [indiscernible].

I need to check, Rauka ji, are you there? I think we missed him.

[Beni Rauka, executive]

Give me a minute. I think he was the number, right? So top line of about INR 83 million, EBITDA of about INR 7 million and PAT of about INR 5 million, that is due to the finance year of -- FY '22.

[Operator]

[Operator Instructions] The next question is from the line of Jatinder Agarwal, an individual investor.

[Unknown Attendee]

Sir, my question is related to R&D expenses. So we've seen a sharp increase during the first half. Could you elaborate more in terms of are there new hirings and which segments are they -- are you looking to focus more on as you go forward? And usually, in your experience, what type of timeframe do you see when you start investing incrementally in R&D?

I know it's difficult to answer, but from your own experiences, if you could just suggest what type of lead lag effect do we see from such type of initiatives? If you could explain all of this R&D in layman terms, I think that would be very helpful.

[Vasant Rathi, executive]

Let me try. Agarwal ji, the R&D is a long-term project always. And we are expanding with more personnel expansion of the labs, development of various different processes and obviously, it all takes a lot of capital expenditures. But we are very committed to keep on continuously grow in these R&D sectors.

The most -- our concentration is on our segments at this point in time in the human nutrition, animal nutrition, et cetera. And they will start providing some limited results probably next year, some of them will be 2 to 3 years down the road. So as usual, we are putting a lot of emphasis on energy. I'm very excited by the way with the results which are happening. Just it will take a little bit time for [indiscernible].

[Unknown Attendee]

And to continue this, sir, so within the human and the animal segments that we have, are these more of incremental R&D on your existing product baskets? Or these are mostly being spent on identifying new business lines in which we can focus on.

[Vasant Rathi, executive]

It's a combination of both. In the existing products, we are carrying a lot of clinical trials. We're getting a lot of supporting basis, right? And the new products, we're always trying to find it [indiscernible]. So there are a lot of things which are going on.

Probably we are working on more than 20 different enzymes, new enzymes. We are working on plenty of different biocatalyst areas. We are working on a lot of different formulations on animal feed areas. So it's a mix of this. You can't like just pinpoint one area or that area.

[Operator]

The next question is from the line of Vaibhav Badjatya from Honesty and Integrity Investments.

[Vaibhav Badjatya, analyst]

So just one request. For this MTM numbers in other expenses that is there, you give it on con call, but it would be great if these things can be mentioned either in the notes to the results or in the presentation because that changes some times. So the fluctuations are such that it changes a lot of things. So it would be great if it can be mention in the presentation or the notes to the quarterly results.

[Beni Rauka, executive]

Thank you so much for your suggestion. We will take a note of it.

[Vaibhav Badjatya, analyst]

So R&D costs, mostly would be sitting in employee cost, right? If I'm not wrong. Large portion of it, maybe 70%, 80% of it would be in employee cost?

[Beni Rauka, executive]

It will be in employee cost, it will be power and fuel cost. There are different bifurcations, so lab expenses, then again, consulting because you have some consultants in research and development, too. And you spend a lot of money on technical services. And of course, rent which is like the premises. So those are different heads where these expenses are sitting.

[Vaibhav Badjatya, analyst]

Okay. But the large portion of it, maybe 60%, 70% of it would be in employee cost? Or my understanding is not right?

[Beni Rauka, executive]

It's about 30%.

[Vaibhav Badjatya, analyst]

Okay. That's fine. And lastly, on the [indiscernible] side of the business where we have made an acquisition. Maybe I'm wrong, but I think we already had that business in form of procurement from other party and selling it in open market, if I'm not wrong. So I just wanted to understand what is the additional benefit as compared to what we already had by acquiring this new entity?

[Vasant Rathi, executive]

In this area, you need to have a lot of control on the procurement. So if you want to expand this business, even though like we were in this business from 1958, but recently, we were just doing it whatever is needed for it. If you want to really expand into this business than we need to have a control on the procurement side, and we need have a continued supply of the material.

So these are the 2 areas which is clearly missing at this point of time. And that's why like this acquisition has come into close.

[Vaibhav Badjatya, analyst]

Okay. So earlier, were we acquiring from the same entity or there is the same -- I mean we were procuring from the same entity or there was some...

[Vasant Rathi, executive]

No we were procuring from different, different people depending on the situation.

[Operator]

[Operator Instructions] The next question is from the line of Rajit Goel, an investor.

[Rajit Goel]

I'm Rajit Goel, individual investor in the company since more than 3 years. I have a few queries. Like, first of all, like we developed ImmunoSEB to work on fatigue after COVID. But we could not take any big benefit from the same. Anyhow it is like some breakthrough, but we could not make a good market of that.

And second one is, overall, the results are almost in the same trajectory since long time as I'm also from R&D background. So I believe R&D enzymes can do miracle, but it is not reflecting very great in the results.

[Vasant Rathi, executive]

Thank you for your patience. I'm glad to see that you are investing in our company for the last 3 years. As you have a great experience in R&D, not every R&D projects converts into blockbusters, right, unfortunately, for general public, unfortunate for the company. Sometimes the ImmunoSEB kind of products which are -- people know the triggers are good, but the period was short and it will take hold of it. So people forget very quickly. But there are some exciting results coming out, which as I told before, mentioned in report, these things will take a little time and sometimes the right conditions, but in immunity is one of the very key area and various other aspects of it.

Let's hope that we'll continue to work on it, make sure that we can provide good solutions of enzymes and that benefits in various different sectors, which are clinically proven. And rest of it, we hope that there will be [indiscernible]. One thing which it has given us is like a lot of knowledge, deep knowledge how the deal with the viruses. This knowledge, we will always be able to use in the [indiscernible]. There's always going to be some opportunity. The ImmunoSEB, [indiscernible].

Yes. It's an external reference is because once you take it to NIH that writes [indiscernible] publications [indiscernible].

[Rajit Goel]

Yes. Right. Right. In fact, I was reading your -- one of your interviews. In that you told that, okay, you were working on some lumpy skin disease trials that are under progress.

[Vasant Rathi, executive]

Sorry, it is not clear.

[Rajit Goel]

Yes, I read your article. In that interview you told that you -- Advanced Enzyme is working on lumpy skin decrease trial.

[Vasant Rathi, executive]

Yes. The trials are going on -- still going on in the north side. I don't think we have results as of now, which is [indiscernible]. So it's again on the virus basis, [indiscernible] so we can find some solutions.

[Rajit Goel]

Okay. So this is only my concern point that, okay, sometimes we do great work, but sometimes we are not able to tell to the world that okay...

[Vasant Rathi, executive]

Market it or materialize it. Yes, but at least something is there in the Q3, which we can utilize in the future. So [indiscernible].

[Operator]

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Ronak Saraf for his closing comments.

[Ronak Saraf, executive]

Thank you, everyone, for taking your available time for attending our earnings con call. We will keep you all posted for any further updates. I request you all to kindly send in your questions that may remain unanswered.

An audio recording and the transcript of this call will be soon uploaded on our website. Looking forward to host you all in the next quarter. Till then, stay healthy and stay safe. .

[Vasant Rathi, executive]

Thank you, everyone.

[Beni Rauka, executive]

Thank you, everyone. Thank you so much.

[Operator]

Ladies and gentlemen, on behalf of Advanced Enzyme Technologies, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.