Advanced Enzymes Technologies

This is an investment idea so it's a buy and hold stock (no stoploss or target), these investment ideas will be reviewed every March. This ideas may give you a multi-multibagger return in a long run.

Price: Rs. 270

Advanced Enzyme Technologies : 

1. Blue chip stock in making
2. The operations i.e Enzymes is an extensive  R&D based technical know-how business, only very few companies can survive in the longer term. Because R&D requires good capital investment and skilled workers are required to get the work onto successful track.
3. Started from scratch by first generation entrepreneur and achieved several milestones in last one decade.
4. Business across 50 countries.
5. The products can be utilized across human , animal, food , non-food sectors and bio-fuel sectors.
6. Promoted by Rathi family
7. Company's innovation got several accolades with awards such as Most innovative exporter's award 2012, India’s Fastest-Growing Mid-Sized Cos 2013,  Bio-Excellence in Industrial Research in 2014 & Best Nutraceutical Company in 2016.

Positives:
1. Segment (Human healthcare, Animal nutrition and bio processing) have lot of growth opportunities exist going forward as people are becoming more sensitive and rejecting genetic modification & opting for natural way.
2. Operating margin remained robust & will stay so, supported by strong R&D set-up and healthy demand in the US.
3. Good to see company is spending > 5% of sales on R&D efforts across several years. 
4. Generally when any company having multiple subsidiaries difficult to expect profits from all the units, AETL is an exceptional one with profits from all the active units.
5. As the company is financially sound, expansion is coming by organic (product expansion) and  inorganic (acquisition of JC Biotech and Evoxx tech) ways .

Negatives:
1. Any sudden regulatory compliance issues may have adverse effect
2. Currency fluctuation : Susceptibility to volatile foreign exchange (forex) rates as Exports account for majority of the revenue. However currently the company does not hedge its net forex exposure, which poses a risk.

Growth triggers:
As an industry itself, enzymes market is in exciting phase projected to show high gains in light of its extensive usage across several industries food processing, germination in breweries, pre-digestion of baby food, fruit juice clarification, meat tenderization, cheese manufacturing, and conversion of starch into glucose with limited competition globally.
Company invested in Advanced Biodiesel Limited, to demonstrate company’s products usage  in the manufacturing of Biodiesel i.e. manufacturing of biodiesel using enzymatic route.
Company acquired 100% stake in Germany-based Evoxx Technologies Gmbh (Evoxx) through its wholly owned subsidiary, Advanced Enzymes Europe B.V for 57 crore. This acquisition is is expected to strengthen the group's foothold in Europe as well as boost research and development (R&D) capabilities.
Company intends to intensify its focus on new age applications such as Palm Oil extraction and Biodiesel, and set up  Malaysian subsidiary to drive growth in this highly potential market