Godrej Agrovet posts best-ever profit despite flat revenues – Here’s what drove the surge

Mumbai-based agri-business major Godrej Agrovet Limited (GAVL) reported consolidated revenue of ₹9,383 crore for FY25, slightly down from ₹9,561 crore in FY24. Despite the modest topline decline, consolidated EBITDA rose by 11.6% to ₹845 crore, and profit before tax (PBT) excluding exceptional items increased to ₹485 crore, up 12% from ₹434 crore a year earlier. The company highlighted this as its best-ever year in terms of standalone profitability, with growth primarily led by the domestic Crop Protection, Animal Feed, and Vegetable Oil segments.

For the fourth quarter, revenues were flat year-on-year at ₹2,134 crore, while EBITDA saw a marginal dip to ₹160 crore from ₹164 crore in Q4 FY24. Q4 PBT declined to ₹74 crore from ₹83 crore in the same period last year. Management attributed Q4 pressures to seasonal fluctuations and margin compression in select categories such as poultry and dairy.

Which Segments Drove Godrej Agrovet’s Record FY25 Profitability?

The earnings surge was driven by strategic focus on high-margin verticals, particularly in the Crop Protection and Vegetable Oil segments, coupled with cost optimization in Animal Feed.

The Crop Protection business delivered exceptional performance with a 40% segment margin, driven by higher volumes of proprietary in-house agrochemical products. While licensed product revenue declined due to lower crop prices, the strong showing of internal offerings more than compensated for the dip.

In Vegetable Oil, improved realizations for Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) — up 32% and 43% year-on-year, respectively — boosted margins. The business overcame an 8% annual decline in fresh fruit bunch (FFB) volumes through better pricing and improved FFB arrivals in Q4 (+10% YoY).

Animal Feed margins also improved significantly in FY25, supported by favorable commodity prices and continued cost control. Volumes remained flat, but margin expansion sustained profitability.

What Held Back Performance in Other Business Units?

Godrej Tyson Foods, operating under Godrej Foods Limited (GFL), saw revenue and margin declines as the company reduced its exposure to the live bird category in favor of branded products. Although branded volumes rose by 4%, lower live bird pricing hurt Q4 and FY25 results.

Astec LifeSciences, GAVL’s bulk agrochemical subsidiary, remained a drag on consolidated performance. The segment faced volume and pricing headwinds in both enterprise and contract manufacturing operations due to global demand-supply mismatches and destocking. While Q4 showed sequential improvement, full-year performance was muted.

The Dairy segment posted better profitability for FY25, driven by higher milk spreads and operational efficiencies. However, Q4 margins declined due to rising procurement costs. Value-added products accounted for 37% of total dairy sales.

In Bangladesh, the ACI Godrej joint venture suffered a 13% annual and 22% Q4 revenue decline in local currency terms due to macroeconomic instability, high inflation, and political unrest.

How Is Godrej Agrovet Performing on ESG and Sustainability?

Godrej Agrovet made notable strides toward its sustainability goals under the Godrej Group’s Good & Green initiative. The company retained its position in the “A” leadership band of the CDP for climate, water, and palm oil forest disclosures, outperforming global benchmarks.

Key progress areas included achieving 81% of energy consumption from clean energy sources against a 2025 target of 90% and becoming water-positive by conserving 16x more water than it consumes. GAVL also received the prestigious CII Climate Action Programme (CAP 2.0) award in the “Oriented” category.

What Is the Stock Market Sentiment on Godrej Agrovet?

Latest Stock Performance

As of April 30, 2025, shares of Godrej Agrovet Limited (NSE: GODREJAGRO) closed at ₹770.25, representing a marginal decline of 0.04% from the previous session. Over a one-week period, the stock has dipped 3.15%, while three-month and one-year returns stand at +3.05% and +41.24% respectively.

This data suggests the stock is in a short-term consolidation phase, but investors remain bullish over the medium to long term, supported by operational efficiencies and strategic margin expansion.

What Do Key Valuation Metrics and Institutional Flows Indicate?

Godrej Agrovet currently trades at a P/E ratio of 35.59, which is higher than the agri-sector average of 21.77, indicating premium valuation expectations. The company’s P/B ratio stands at 5.07, with a dividend yield of 1.3%. Its Return on Equity (ROE) is 16.65% and Return on Capital Employed (ROCE) is 19%, signaling strong profitability and efficient capital usage.

In terms of ownership structure:

• Promoters hold a steady 67.56%

• FIIs have increased their stake to 7.55% from 7.10% in the prior quarter

• DIIs also raised their share to 6.25% from 5.87%

• Mutual funds reduced holdings from 3.47% to 3.15%

The rise in FII and DII holdings suggests growing institutional confidence in the company’s long-term strategic roadmap, while the minor pullback from mutual funds reflects tactical repositioning.

What Is the Investment Outlook and Analyst Sentiment?

Brokerages maintain a mixed-to-positive stance on Godrej Agrovet, with a leaning towards “Hold” or “Accumulate.” Analysts highlight the company’s diversified business model, high-margin focus, and ESG leadership as positive factors, while warning of near-term volatility in the poultry and B2B agrochemical segments.

Twelve-month price targets range between ₹735 and ₹940, with a median target of ₹830.5 — indicating potential upside from current levels.

From a technical standpoint, the stock is trading above its 50-day and 100-day moving averages but remains below its 5-day, 20-day, and 200-day averages, suggesting ongoing consolidation after a strong yearly run.

Investment View:

Short-Term: Hold amid sectoral volatility and valuation richness

Long-Term: Buy on dips given the company’s margin-led growth strategy and diversified earnings base

Investors are advised to track further developments in Crop Protection innovation, poultry segment recovery, and macro trends in commodity pricing for broader cues.