Feb'25 View on Godrej Agrovet Ltd

Godrej Agrovet Limited is a diversified, Research & Development focused agri-business company, dedicated to improving the productivity of Indian farmers by innovating products and services that sustainably increase crop and livestock yields. It holds leading market positions in the different businesses in which it operates - Animal Feed, Crop Protection, Oil Palm, Dairy and Poultry and Processed Foods. After touching high of 880 the stock has fallen to its long term low of 690 and taken support and bounced from there and is now at 735 level. It now seems to cross again 880 level and then make a new high due to following factors. • EBITDA increased 38% yoy (5% above KIE) as margins expanded 220 bps yoy. • Sharply higher prices of palm oil, favorable commodity positions in Animal Feed. • Higher prices of live birds in the poultry business (Godrej Foods). • The outlook for the rest of GAVL’s business portfolio is positive. • Retain a positive bias for stock, seeing healthy earnings growth potential in coming years. • Reported a good quarter, boosted by higher prices of palm oil; margin expansion in animal feed and processed poultry. • Crop protection segment was main drag; the domestic business should recover sooner. • Recovery at Astec is pushed amid demand softness & is the key reason for estimate cuts.