Godrej Agrovet reports strong growth in Q3 and 9M FY24, led by crop protection and dairy segments

Godrej Agrovet Limited (GAVL), a leading player in the agribusiness sector, has reported a commendable financial performance for the third quarter (Q3) and the first nine months (9M) of the fiscal year 2024 (FY24). The company has demonstrated resilience and strategic agility, achieving significant growth in both revenue and profit amidst challenging market conditions.

Financial Highlights Reflect Robust Performance

For the nine-month period ended December 31, 2023, GAVL reported consolidated revenues from operations of Rs. 7,426.3 crore, marking a 2.0% increase from Rs. 7,278.7 crore in the same period of the previous fiscal year. The profit after tax for 9M FY24 surged by 33.4% to Rs. 299.2 crore from Rs. 224.3 crore in 9M FY23, highlighting the company’s strong profitability.

In the third quarter of FY24, GAVL achieved consolidated revenues of Rs. 2,345.2 crore, a slight increase from Rs. 2,323.5 crore in Q3 FY23. The quarter witnessed a notable 26.3% growth in profit after tax, reaching Rs. 84.6 crore compared to Rs. 67.0 crore in the corresponding quarter of the previous year.

Segment-Wise Business Insights

GAVL’s diverse portfolio, spanning animal feed, vegetable oil, crop protection, dairy, and other agribusiness segments, contributed to its strong financial performance. The company’s crop protection and dairy businesses, in particular, led the growth trajectory with significant year-on-year profitability increases.

The animal feed segment achieved record quarterly volumes in Q3 FY24, despite facing headwinds from unfavorable commodity movements. The crop protection segment continued its strong growth momentum, driven by high sales of in-licensed portfolio and plant growth regulators (PGR) products.

Astec LifeSciences, a subsidiary of GAVL, experienced challenges in its enterprise business due to difficult external market conditions, impacting its revenue and margin performance. However, the contract manufacturing business of Astec maintained strong volume and margin performance.

The dairy business saw a robust improvement in segment margin, attributed to operational efficiencies, lower procurement costs, and a rising share of value-added products. The poultry business, under Godrej Tyson Foods Limited, maintained healthy volume growth in branded products, although profitability was affected by a sharp drop in live bird prices.

Management’s Perspective on Performance and Future Outlook

B. S. Yadav, Managing Director of Godrej Agrovet Limited, commented on the performance, highlighting the strong growth in profit after tax, primarily led by the domestic crop protection and dairy businesses. He emphasized the company’s focus on efficient working capital management and credit hygiene across businesses, which contributed to the improved leverage profile and operating cash flows.

Yadav also noted the robust and consistent financial performance of the crop protection business and the dairy business’s strong recovery path. He acknowledged the challenges faced by the vegetable oil and Astec LifeSciences segments but expressed confidence in the strategic measures being undertaken to navigate these challenges.