Thread by @ValueEducator

#Fermentabiotech Q3 2022 Concal Highlights

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Operational Highlights

1. The revenues for the quarter stood at ₹93Cr with growth of 3.2% YoY

2. EBITDA stood at ₹2.2Cr translating to EBITDA margins of 2.36%

3. The company posted a loss of (-₹8 Cr) and negative PAT margins

4. Q3-FY22 gross margins are better by 3.6% over Q2-FY22. However due to lower sales and under absorption of cost the EBITDA margins have dropped approximately by 3%.

5. Volumes of Human Vitamin D3 in Q3-FY22 are lower by 31% over Q2-FY22 due to lower offtake of Human Vitamin D3, however they are higher by 19% in 9M-FY22 over 9M-FY21.

6. Volumes of Animal Feed in Q3-FY22 are higher by 145% over Q2-FY22, however they are lower by 33% in 9M-FY22 over 9M-FY21. The prices are also lower by 22% in 9MFY22 over 9MFY21

7. Fish Oil Cholesterol revenue was down by 55% in Q3-FY22, however it was higher by 80% for the 9 month period

8. The human nutrition suffered in this quarter but as far overall demand is concerned, it stays strong

9. Nutrition business
Human nutrition- 64.3%
Animal feed was 35.7%

10. Currently the major part of business is vitamin D3 and 80% of volumes are used in animal feed. Animal feed is a commodity business and china is also responsible for volatility in prices,

however this is tackled by product diversification, working on cost improvement and process from new raw materials to improve efficiency etc.

11. Aspiration to reach ₹1000Cr revenues in 5-6 years
The previous year high revenues were primarily driven by high vitamin prices

12. The company is developing proprietary technology to manufacture vitamin D3 from fish oils and cholesterols, targeting the same product quality with different use of raw material which will benefit in manufacturing cost. The company is evaluating

pathways to get the necessary regulatory approvals for the usage of new raw materials.

Subsidiary updates

1. Germany: It has obtained the required approvals in Q3-FY22 and has clocked sales of ₹6.1 Cr. However, being the first sales most

of the initial trial cost, campaign cost and inventory carrying cost for the last two and half years was loaded on the initial products manufactured. This has resulted in higher manufacturing cost and revaluation of the inventory resulting in loss of ₹8.6 Cr in Q3-FY22.

2. The German subsidiary is mainly for animal feed and is expected to generate higher profits compared to Indian standalone business

3. USA: USA Subsidiary incurred loss of ₹0.8 Cr for the quarter and ₹1.4 Cr for the 9 months mainly on account of lower offtake of Animal Vitamin D3 volumes due to ongoing 'Covid-19’ pandemic.

Vitamin D3 500 Animal Feed Price Trend