Q2 -2025(oct 2024) concall

1…PERFORMANCE

Astec LifeSciences continued to experience pricing pressures in the enterprise products business
and lower-than-expected volumes in the CDMO category due to a cautious approach adopted by
our CDMO customers. This adversely affected both revenue and margins

2…CDMO

=Overall, the earlier guidance remains the same, we’ll see a 50% growth over last year.

=Cdmo rev
2024@270 cr
This yr target@400cr

3…Enterprise segment

=In terms of enterprise business, the demand is slowly picking up, but the prices are much lower because of the Chinese pressure

=There have been two approaches to this solution. One, yes, some of the capacities already.

= If you see some of the capacities we are using for new products, the new product launch, which has happened in these two quarters, is using the existing capacity.

=Secondly, yes, some of the
life cycle we are trying to manage in terms of we will be reducing some of the capacities and
using it for some other products. But it will take some time to materialize, because that will be
the question of registration, buyer’s agreement. So, this takes time. But on both the fronts, we are working.

=Finally, Q3 should be the last quarter for high-cost inventories. However, overcapacity by other players is still there

4…Herbicide 2 plant

=It has been commissioned on time and that will play big role in terms of achieving this target.

=herbicide plant, definitely, the assumptions for that plant capacity
utilization are definitely pushed by a year or two. And I feel that probably it will be only in FY26
that we will see upwards of 60%-70% utilization of this plan

=Normally, it takes around three years to have a full capacity.

=This year, we’ll be using around
30% of the capacity.

5…Rnd

=Total this year we have introduced one new molecule and total molecules will be nine. Eight
was for the past and one new molecule,

=And that is one more
addition which we are doing. We are now also working in the development phase. Since we are
working with innovators during the development phase, the scale of optimization, everything
we are doing. These are major shifts from our previous R&D

=However, even the innovators are having some tough time
worldwide. So, whatever used to take two years, two years may take three, four years now. So
that I think is the story as of now.
There are inquiries, there are collaborative efforts, but they’re
a little sluggish. Some of the very big innovators have banned international travel. So just
because they’re under tremendous stress. So, I think all this will take a couple of quarters to
clear.

Disc …invested

They took more provisions for impairment at the end of FY’24, out of which this amount got reversed.

Can anyone explain the exceptional item net loss (Point 10 and 11) in last quarter?

Thanks for the write up.I think the real ground down opinions like this really add value to this forum eventhough its macro . It shows we need to be objective and ignore the nationalistic (often jingoist) noise which politicians make.