Advanced Enzyme Technologies Limited (ADVENZYMES) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Advanced Enzyme Technologies Limited Q3 and 9 Months FY '22 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.

Good evening, everyone. Welcome to the Advanced Enzyme's Third Quarter and 9 Months '22 Earnings Conference Call. I am Ronak Saraf the Manager of Investor Relations at Advanced Enzyme. I hope you all have received our financials press release and the presentations, which has been posted in the Investor Relations sections of our website. We have with us Mr. Mukund Kabra, the Whole-Time Director; and Mr. Beni Prasad Rauka, the Group CFO. Today, the management will discuss performance and business highlights, updates on strategy 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 statement disclaimer contained in the presentation. During our call, we may -- forward-looking statements regarding our expectations or prediction 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, Mr. Kabra.

Thank you, Ronak. Good evening, everyone. I really appreciate and welcome you all to the conference call for the quarter and 9 months ended 31st December 2021. At the onset I hope everyone is healthy, safe and taking all the necessary precautions in the wake of the third wave of COVID-19. At Advanced Enzyme, we are committed towards protecting health and well-being of our employees and their families. We continue to implement rigorous safety and hygiene measures across all locations without any compromise and provided work-shift flexibility wherever possible. Since our last earnings call, the world has continued to face unprecedented challenges both on health and economic front. During the last quarter, our industry has faced multiple headwinds due to the logistics, raw material availability and higher prices, especially for the solvents, coal, etc. Most of the solvent prices are on all-time high. I believe the supply chain and logistic cost situation will continue to remain a challenge. Our [indiscernible] and operating efficiency will continue to drive our strong net cash position. We made conscious decision to stock up on inventory so as not to hamper our production and ensure smooth supply to our esteem customers. I will start this call by sharing with you the earning updates for the third quarter 2022 and segment-wise performance. Our revenue declined by 3% on a year-on-year basis to INR 1,336 million. Our EBITDA declined by 26% to INR 491 million during the quarter. Our PAT declined by 35% to INR 286 million. EBITDA margin stood at 37%, while PAT margin stood at 21% during the quarter. The impact in the operating margin is because of high input cost, we are finding unprecedented increase in almost all the input materials including fuel and logistics costs. In the 9 months, the highlights are as this. Our revenue grew by 8% on year-on-year basis to INR 3,976 million. Our EBITDA decreased by 9% to INR 1,612 million. Our PAT declined by 16% and stood at INR 985 million. EBITDA margin stood at 41%, while PAT margin stood at 25% during the period. Now I will take you through the segment-wise revenue. The Human Nutrition contributed 69%, Animal Nutrition contributed 10%, Industrial Bioprocessing contributed 12% and Specialized Manufacturing contributed 9% in the total revenue during the quarter as well as in the 9 months. The Human Nutrition segment degrew by 16% to INR 918 million in quarter 3 financial year '22 as compared to INR 1,089 million in quarter 3 financial year '21 and remaining flat on a quarter-on-quarter basis. The Animal Nutrition segment has outperformed during the quarter by 26% to INR 132 million in quarter 3 financial year '22 as against INR 105 million in quarter -- in the financial year '21, while it grew by 19% in the 9 months on a year-on-year basis. The Bio-Processing segment registered a decline of 13% during the quarter. It stood at INR [ 150 ] million in quarter 3 financial year '22 as compared to INR 183 million in quarter 3 financial year '21, while it grew by 35% on a quarter-on-quarter basis. In this segment, Food business contributed 9% and stood at INR 115 million, down 5% year-on-year basis, while the Non-Food business contributed 3% and stood at INR 44 million, down 27% year-on-year basis during quarter 3 financial year '22. The Food and Non-Food business grew by 35% and 36%, respectively, on a quarter-on-quarter basis. The Specialized Manufacturing segment contributed INR 125 million in quarter 3 financial year '22 as compared to INR 97 million in quarter 2 financial year '22. It has registered a growth of 30% on a quarter-on-quarter basis. Now I will talk about the geographical split of the revenues. The domestic sales contributed about 43% in the revenue from operation during quarter 3 financial year '22 as compared to 52% during quarter 3 financial year '21. Domestic sales underperformed by 20% and stood at INR 571 million in quarter 3 financial year '22 as compared to INR 717 million in quarter 3 financial year '21, while it remains flat on a quarter-on-quarter basis. International sales down -- international sales were 57% of revenue from operations as compared to 48% during quarter 3 financial year '21. International sales amounting to INR 764 million in quarter 3 financial year '22 as compared to INR 660 million in quarter 3 financial year '21, a jump of 16%. The revenue grew by 4% in America, while it grew by 2% in Europe and strong 262% in Asia, ex India. The Rest of the World registered a growth of 86% on year-on-year basis. On a quarter-on-quarter basis, the international sales grew by 13%. The revenue grew by 10% in America, 49% in Europe and strong 9 -- 34% in the Rest of the World. The Asia ex India declined by 17%. Now I will now hand over the call to Raukaji, and he will walk you through the financials and key subsidiary numbers. Thank you.

Thank you very much, Mukund. Good evening, everyone. I hope you all are in good health. Now I'll just take you through the company's financials for the third quarter FY '22 and then for 9 months FY '22. On a year-on basis, our revenue is down by INR 41 million from INR 1,336 million to INR 1,377 million. EBITDA is decreased by INR 173 million from INR 664 million to INR 491 million. Profit before tax decreased by INR 197 million from INR 609 million to INR 412 million. PAT is decreased by INR 157 million from INR 443 million to INR 286 million, which is about 21% as compared to 32%. On quarter-on-quarter basis, our revenue is increased by INR 65 million, 5% growth from INR [ 1,271 ] million to INR 1,336 million. EBITDA is flat, and it's about INR 491 million as compared to INR 493 million. Profit before tax is also flat at about INR 412 million as compared to INR 413 million. PAT has decreased by about INR 17 million from INR 303 million to INR 286 million. Our finance cost remain unchanged at about INR 3 million during the quarter. Depreciation and amortization charge is up at INR 88 million as compared to INR 65 million due to the inclusion of the financials of SSPL. on year-on-year basis, for 9 months, revenues is decreased -- revenue is increased, I'm sorry, increased by INR 290 million, 8% increase from INR 3,686 million to INR [ 3,967 ] million. EBITDA is decreased by about 9% from INR 1,766 million to INR 1,612 million. Profit before tax is also decreased by about INR 255 million from INR 1,626 million to INR 1,371 million. PAT is decreased by about INR 192 million from INR 1,177 million to INR 985 million. So the PAT margin is at 25% for 9 months as compared to 32% during FY '22 for 9 months. Evoxx during this quarter performed at revenue of INR 47 million, EBITDA of INR 12 million and even with the PAT positive of about INR 1 million as compared to INR 62 million of top line and INR 9 million of EBITDA and PAT of negative INR 2 million corresponding last year quarter. JC Biotech sales during the quarter stood at INR 92 million and EBITDA stood at INR 32 million and PAT of INR 16 million. Our largest selling product, which is anti-inflammatory enzyme stood at INR 279 million during this quarter as compared to INR 365 million in quarter 3 of FY '21, so there is a degrowth of about 24%. Top 10 customers contributed about 30% of our revenue as compared to 47% in Q3 of FY '21. B2C segments contributed about INR 1.55 million as compared to INR 1.54 million during the same period previous year. So this is all about the various highlights of our financials for quarter as compared to quarter 2 and quarter 3 of last year and 9 months. And now we open the session for question-and-answer, please. Thank you.

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

So just a few things on the broader picture. Now how -- I mean in last quarter also, we have indicated that inventory had piled up significantly, so how that number has been in this quarter? And what kind of basically challenges we are seeing right now in terms of pushing our products or increasing our sales? As -- I mean, considering the fact that during the COVID time year slightly anticipating that this kind of probiotic sales would be much better during this COVID time. And it could have an incremental sales or maybe you can say probiotic products. So how things are panning right now? And where we are actually facing major hurdle?

Mukund, sir, we are not able to hear you, sir. Ladies and gentlemen, request you all to please stay connected while we check the line from Mr. Mukund Kabra. Ladies and gentlemen, thank you for patiently waiting. The line from Mr. Mukund Kabra is reconnected. Mr. Sinha, please repeat your question.

Yes. So sir, as I was saying that I just wanted to understand what is the basic hurdle we are facing right now in terms of scaling our revenue as we are -- I mean, earlier as we are expecting that during this COVID time, there would be some incremental sale from the probiotic side going forward also. So where is the major concern for us and when these things look to be normalized going forward? And also how the inventory level right now is standing as of now?

So Rohit, there are multiple questions. On the inventory level front, we are maintaining the same inventory what we had quarter before, and we are keeping the same level, which is on a higher side. On the probiotic side, this year was a little bit on a lower because some of the customers who had already bought too much of probiotics and piled up their inventories are really slow for this year. So the situation -- and we are facing a lot of hurdles in terms of like logistics and the escalation in the cost. So logistic is playing role where like we are not able to really push the material, most of the material in the export market. Also logistic is like -- logistics is also like giving the higher raw material prices in many areas like coal and other and even like in some of the developments, for example, biocatalysts, where you are like already developed the materials or the enzymes for the biocatalysts, but the logistics at their end is also not helping them to convert it into the new methods, right? So logistics is playing real like a spoiler out here. Even if saying that like I expect the inventory problem and other problems should be normalized from the first quarter of the next year. And I expect logistics should be in control by the second quarter of the next year. So my gut feeling is from the first quarter of the next year, we should start coming back on to the track.

Okay. Okay. That's good. And secondly on the pricing side, I just wanted to understand how things are going for us as we have seen for other companies like goods prices has gone up significantly, but simultaneously they have also passed on a lot of things to the customer. And that's the reason their top lines are higher by almost 30%, 40% on Y-on-Y basis, but obviously, margins are also compressed but still top line has been on the much higher side. So just wanted to know what -- where we are standing? And is there any price increase pending for us going forward, it could reflect in 1, 2 quarter?

We are in a different industry. And at this point of time, we are really not thinking like we'll pass on the prices in areas like where we can pass on, we already started working on it. The best way for us is like to increase the sales, and that's where the whole like focus is.

Okay. Okay. So I mean, going forward, where we should see this margin profile, which has that hit almost a 4-year low at this time. But obviously, I understand that a lot of things are there. But when these things get normalized, do we get back to that 44%, 45% kind of EBITDA level or because of this SSPL inclusion still that mark would be a bit away from us?

I hope that we should be in a normal course should be -- our EBITDA should be between 40% to 48%, we should continue that. So I don't see there is any reason why we shouldn't.

And that would be achieved when we -- our sales would be slightly improved, I guess? I mean if that just flat kind of number, the margins would still ring in on the lower side. So in order to push margin, our sales from here onwards also need to be on the higher side, correct?

That is right.

Okay. Okay. And just wanted to know your thoughts on going forward into newer products, if at all, we are working on as -- I mean, obviously, we have been catering to a lot of pharma players as of now. So going forward, where our targeted area could be? And -- any thoughts on that?

Sure, we repeatedly talked about our targeted areas. We are -- our -- all the research is driven into that direction, particularly like our focus areas are well defined. We are working on like -- a lot of work has been going into probiotics in their clinical trials, a lot of work is going on like on the nutraceutical side and their clinical side. A lot of new enzymes being developed for the field and which are under the pipeline. A lot of new developments and the new enzyme developments are going on in the biocatalyst areas and the different product formation and different presentation is going on in the Animal Nutrition side. So these are the focus areas and all the R&D is being really focusing into all of these 5 different areas. Thank you.

So majorly, I mean, what were the existing segments we are focusing more into expanding those segments moving forward, right?

Yes.

The next question is from the line of Shikha Mehta from Equitree Capital Advisors.

I just have a couple of questions. Could you tell us the increase in logistics costs quarter-on-quarter and year-on-year as a percentage?

Yes. So...

And for raw materials as well?

Yes, Shikha, we'll give some numbers to you as far as you are talking about only logistic cost increase, right?

Right.

Okay. So in the quarter 3, if we compare with the Q2, this is up about INR 4 million. And if we look at quarter 3 of this year with quarter 3 of last year, the increase is about INR 6 million. And for 9 months, the increase is about INR 11 million. This is only -- I'm talking about the increase in the freight most.

Right. Do you have a similar thing for raw material increase?

Raw material increase, yes. So raw material increase in terms of value, I can give you some numbers about INR 11 million, if I compare with Q3 to Q2, that is the increase. And if I compare with last year, then it is about INR [ 15 ] million. And for 9 months, the raw material price, because of the raw material price increase, the impact is about INR 19 million.

All right. All right. Also, I missed the opening remarks, so I'm not sure if you added this, but could you also...

I'm sorry to interrupt you, I would request you to please increase the volume of your device or speak a little bit louder?

Am I audible?

Yes.

Yes. Sir, could you also give us the revenue, EBITDA and PAT numbers for all your subsidiaries?

Which subsidiary you want?

Evoxx...

Okay. Yes. So Evoxx, the top line is INR 47 million, EBITDA is INR 12 million, and PAT is INR 1 million. For JC Biotech, it's INR 92 million, EBITDA of INR 32 million and PAT of INR 16 million.

16, right?

Yes, 1-6, right.

The next question is from the line of Dipak Saha from Savart a SEBI registered investment advisors.

My question is regarding what is the progress on probiotics that we launched for COVID package in Indian market as we have taken considerable amount of investment in the market in that? So if any material development for this...

Sorry to interrupt you. The audio is not clear from your line, sir. Please use the handset mode.

Okay. Am I audible now?

Yes, sir.

Okay. Sorry about that. Sir, my question is regarding the probiotic that we launched for COVID fatigue in Indian market. So what is the development on that front? Because we understand that we have also incurred many marketing expenses and marketing tie-ups in this particular quarter and that this product has been considerably well in U.S. market. So what is the development on this front for the Indian market?

So the revenues are still like negligible of the products which we are in the B2C segments in the Indian market in few lakhs, which is not really significant. We are still working. We are still new. And generally, like in the B2C segment, it takes a long time. For example, in U.S. also our presence is there from last 7, 8 years and now the revenues are shaping up. So we don't expect too much of revenue this year and maybe next year from this B2C segment.

And do we consider any change in your marketing strategy in order to ramp up the revenue numbers?

So marketing, we are like really focusing. We are really increasing the people and the areas of focus, particularly like in the last quarter, we have really built up the team for the animal feed particularly for the Asian market, we have started some people in Asian market. We have taken some people for the European market as well, and we are like focusing on the European markets, how it can be done. Our focus is already there in the U.S. market, and we are working certain tie-ups for the food into the U.S. market and how we can do it. Biocatalysts is a little bit slow. Most of the market is in India. At this point of time, it's like all the logistics, which is spoiling where the new products are not being able to launch, but we are continuing our research and developing our product portfolio to get the things normalized and then we can really go forward into those areas. And in the probiotics, we already started in U.S., like most of our like probiotics are already moving into the rapid pace with the -- with our own brands, which is our ultimate target. So we are moving into the right direction. It's certain time lags, which are there.

Okay. And sir, if I look at the quarterly revenue number, that's quite tepid. And I understand all the reasons that you alluded are causing this problem. But just some clarity if you can share. Is there anything too much concerning on the demand side or it's just a timely concern and it will normalize as and when the raw material availability and rise in raw material prices, the logistic challenges, everything settles down? Or is there anything concerning about the demand side and accordingly, we need to change our strategies and other part or it's just a timely concern, and it will settle down, if you can share some light on this thing as well?

Dipakji, I think it's more of a time, which is required rather than the demand as a problem on overall. Some of the problem is, of course, with logistics, for example, if I had to shape like animal products for $1 a kg to U.S. and if I had to give a $0.95 the logistic cost to transport, of course, I don't want that kind of a business, right? So some of the business is being delayed and slowed down at this point of time, like because of those. Some of them are like the inventory problems, which are there at this point of time. And I think this is a time -- time is required rather than the real demand as a problem. You are still not able to travel. For example, I haven't traveled anywhere overseas from last 2 years and 3 months and probably like this is the time maybe from the March, we should be able to start traveling. So these are all the timing problems. And I feel like 1 or 2 quarters further we require the things to normalize.

Okay. And sir, my last question is regarding the Specialized segment, we see a substantial growth in the Specialized segment nearly about 30%. And so considering such kind of growth and because of the synergy that we have created with our recent acquisition. So do we foresee this particular segment contributing higher revenue in the coming quarters? Or any strategic change for this particular segment to the overall revenue front or anything else as far as this particular segment, specialized manufacturing is concerned, to better the overall revenue trend?

Yes. So in the Specialized margin front, like we can -- the raw material cost has significantly gone up, but the good part is we can like pass on these costs to the customers, consumers at the same time, like we are really working on the growth, particularly the specialized company like which is SciTech as then another joint venture in the African market for their products to be launched in the African areas. And maybe -- I think this will grow. The -- we are on the target, what are the revenue targets we anticipated before acquisitions and on the other fronts. There is somewhat like slowness unlike converting our products into the new kind of drug delivery kind of a products and because of like a little bit of slowness into the market and because of the travel problem, like we are like targeting our food enzymes, we can make it to the different tablets and capsules, and we can supply. But those areas a little bit like on a slower, but rest of the things are at a good pace and assess like this business is really growing.

Okay. And all these situations, we anticipate that it should normalize by first quarter of next year, right?

It should start normalizing by the first quarter. And I think like 1 or 2 quarters more is needed, particularly.

Okay. And we stick to the same margin that we stuck to during the last quarterly con-call, somewhere around 41% to 45% to 48% or 41% to 48%, right, EBITDA margin I speak about?

That still has no changes.

[Operator Instructions] The next question is from the line of Rohit Nagraj from Emkay Global.

Sir, again, prodding little more on the demand side. So we have seen your cost pressures continuously over the last 2 to 3 quarters. So is it difficult for the customer to take on these price improvements on a sequential basis? And that's one of the reasons why there has been an impact apart from the other issue such as logistics that you pointed out?

Rohit, I think like I'm not able to hear you. Can you please repeat?

Yes. Sorry. Is it better, sir?

There is some background voice.

Background disturbance, yes.

Is it better?

Yes. Just a minute. Just a minute.

Hello?

Yes.

Yes, is it better?

Yes.

Yes, sir. Yes. Sir, in terms of the increase in input costs, so we have seen that in the last 2, 3 quarters, there has been continuous increase and probably, there is some resistance from the customers to absorb these costs. And that's the reason there has been an impact on our performance apart from the logistics cost that you mentioned or challenges that you mentioned?

Rohit, there are like always a product mix that is also like one of the factors which is contributing to the higher raw material cost at this point of time. At the same time, in many areas, for example, like the anti-inflammatory areas and other areas we command a significant market share and that is not advisable to increase the cost when the competition is on the door stage. So we consciously decided not to pass on the raw material costs and whichever the areas we can pass on, we started doing it. But in our business, generally, we don't pass on, right? So we are working on it, the areas like Nutraceuticals specialized business we started passing on.

Right. Right. Got it. Sir, just an allied question. So in such a case, when the demand is not met by us, is it that the overseas customers are taking the material from the local customers for the time being? I mean just our assessment or is there any substitute which is available?

So if you really look at it, whatever our international business is those we are keeping at the same level or increasing like the problem which is coming up is more on the domestic front at this point of time. And some of the areas which we wanted to grow the market, right? So these are the real challenges rather than the real export market because we are like taking on all the logistic costs at this point of time, it is hampering some of the margin, but still we are not losing the business.

Right, right, right, sir. Got it. Sir, just a little bit on each of the segments. If you could just provide some indicative understanding in the recent past across the segment, we have seen that Human Nutrition has come down, but other segments have done exceptionally well? So just thoughts on each segment and how are we seeing the dynamics? Is there any change in the last couple of quarters? And what are our expectations in the near future?

So I don't see like -- many things are like quarter-on-quarter basis, we cannot really judge it, whether this has gone up or gone down because the business in nature is not such that every month, the same sale will be there. In some of the months, like some product goes higher and in some of the months the other product goes up. Now the Human has gone down to a certain level because the contribution of new segment, which is there like at the SciTech, which is we categorize as a special business, right. Yes, so Raukaji, you can give some more inputs on this.

No. So that's what I'm saying. As Mukund has mentioned on quarter-to-quarter, I mean, there is not going to be any kind of change in the strategy. We still stick to our growth drivers, which we have earlier shared with you that our focus will continue to be on biocatalysts than on B2C segment, particularly in international market, and apart from that, probiotic industries, we have mentioned to you about the kind of growth and animal feed business, we have explained that over a period of time, we are working on getting our products registered in various countries, appointing the [indiscernible] and expanding our marketing and sales team. So our growth driver still -- that is a long-term growth kind of a strategy that we are working. So 1 or 2 or 3 quarters like -- I mean, it doesn't really make any sense to think about any kind of a sense because you always work on your growth. So these are like some kind of challenges. The sales is not like picking up because of several reasons, which as Mukund has already explained. And logistics is the big issue, input cost is up. Then the market has in past accumulated a lot of inventory. So they are also like liquidating their inventories. So for the timing, overall, the sales growth for us is slow in that sense. But as we look at our bifurcation of international or domestic market share -- marketing sense, sorry. So the domestic market is down, but yes, international sale is going up. That shows that we always have been telling that our focus is more on the global market because that is a big market. Indian market for the enzymes whatever in Human Nutrition is already dominated by us and of course, it is only growing to 6% to 7%, which is a kind of a growth in this particular market. But the other opportunities are big and the growth potential is high. So we are continuously working on that. And unfortunately, these 2 years being exceptional years and very difficult to say anything, what really went wrong and you keep on talking about several reasons, but then I think once we see some kind of a normalcy, which is like most likely now may happen from the first or second quarter of FY '23, as Mukund has explained, so we hope the growth will come going forward.

Right, right, right. So just to probably summarize, FY '22 has been in transition. Probably first half of FY '23 also will be in transition when the external environment will more or less normalize. And FY '24 would be the year when we'll have the effect of normalization of the external environment as well as the growth, which will come from the initiatives that we are currently taking in and the products that we are working on, is that a right assessment?

Yes. So see, as and when that all economy opens, everyone has to rush because everyone is waiting for the right time now. Unfortunately, sometime back when everyone realize now things are opening up, then what again happened, we all know. So we lost this time in this sense. So very difficult to say in terms of 1 or 2 or 3 quarters. But yes, I mean, we always say that we have been on our path, and we are confident that going forward, I think things will turn out to be normal. And as you all are analysts, you have been interacting with so many companies, probably you can give better insight to us that what exactly is happening with this present scenario where whether one can really comment on it or not as for really or other challenge, we are also facing.

The next question is from the line of Rohit Sinha from Sunidhi Securities and Finance.

So I wanted to understand on this SciTech -- first of all SciTech recent acquisition. What was the thought process behind that? And secondly, on this existing business, I mean SSPL is doing, I would say, pretty well as of now, the numbers are looking good in terms of revenue. So where we can see this number heading forward in next 2 years or specially for this SSPL?

Yes, Rohit, I mean I think as far as the synergy is concerned, as we already mentioned to you, it's a specialized manufacturing company with the technology of effervescent and various other technology they have developed over a period of time. And this was like thought to have 1 other way of delivering our novel products through this technology. So we shall be like -- that was 1 way of looking at because we already have presence in B2C segment in U.S.A. and India, we wanted to expand. So that's where we already started. So it would be really helpful when we can use this particular subsidiary company and their expertise and technology. And SSPL, how much they can grow? Like if I really look at my 9 months number of SSPL for this year and compare with the previous year, it is growing about 30%. And we are definitely expanding that company. We are also investing some more money in CapEx. The company is now kind of a self-sustained company with a very low debt. So going forward, again, this company, we will be expanding the manufacturing capacities of -- and we should be in a position to grow by 25% to 30% as far as SSPL is concerned.

Okay. Okay. Fair enough. And sir, just maybe a wild thought, but is it that in order to expand SSPL, we are somehow restricting our growth in this Human vertical business or they are going...

No, no. Both are independent. Rather like SSPL, now as Mukund has already mentioned that 1 particular area of work where we have been like working with them, it's like kind of you can say slowdown because the overall issues are different now in last 2 years. So you want to develop something new, but you have several other challenges because industry is also like somehow looking at just somehow to go with the flow. So nobody wants to take a new challenge in this last 2 years, that is what is our observation. So many more products which we have like working on it. But now adoption of those products in different forms by the industry is like it's still is a challenge because of several things in addition to the logistic. So I mean that is independent, they have their own resources, it is kind of not at all kind of blocking our growth. Yes, our growth is something which we have been working. And this year, a particular growth number, whatever number because you might be looking at whatever growth has happened, it is mainly contributed because of the number of SSPL, right? So the organic growth, particularly in this year is tapered off because of COVID situation and because of the inventory buildup in the past by a couple of new companies. So a couple of like reasons has really hampered the growth during this particular year.

Okay. Okay. And sir, just some thoughts on the acquisition of SSPL. I mean we can see what the small company SSPL has acquired?

Sorry?

So in the recent filing just their -- for SSPL...

SSPL is going to contribute some stake in African companies because that particular company is again into that nutraceutical business, right, that Mukund has already explained. So that will help SSPL and to us to expand again our marketing reach to African countries. So they are back in Africa and they will help us to market the products of SSPL as well as Advanced Enzyme because that's where we have been telling that we are working on like several novel ideas of delivering our products. So we will like again, use that as an opportunities to expand that African continent market.

Okay. Okay, sir. And any idea about the market size opportunity there for us?

So for us, it's a big opportunity that's what it is. But in terms of -- if you will ask me numbers and all that, I think right now, I won't be in a position to give you that number.

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Mr. Ronak Saraf for closing comments. Thank you, and over to you, sir.

Thank you. Thank you, everyone, for taking your valuable time for attending our conference call. We will keep you posted for any for the update. I request you all to kindly send in your questions that may remain unanswered in the call. The transcript of this conference call will be uploaded on our website in the due course. Looking forward to host you all in the next quarter, till then, stay healthy, stay safe. Thank you.

Thank you, everyone. Thanks so much.

Thank you, everyone.

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