Godrej Agrovet Q1 profit before tax down 19 per cent at ₹102.8

BL Pune Bureau | Updated on: Jul 31, 2022

Company says it faced a challenging quarter with marginal contraction in business

Godrej Agrovet Ltd’s (GAVL) total income increased to ₹2,517.5 crore during the first quarter of the current fiscal from ₹2,003.2 crore in the same period a year ago - a growth of 25.7 per cent year-on-year. The company reported an EBITDA of ₹169.3 crore compared with ₹180 crore in the year-ago period. Profit before tax was ₹102.8 crore during the quarter compared with ₹126.2 crore in the year-ago period. 

GAVL is a diversified, research and development-focused agri-business company, dedicated to improving the productivity by innovating products and services that sustainably increase crop and livestock yields.

B. S. Yadav, Managing Director, GAVL, said, “All of our businesses, with the exception of crop protection, registered a strong volume growth. We achieved year-on-year growth of 25.7 per cent to clock total income of ₹2,517.5 crore in the first quarter.” 

Challenging quarter

He said,“However, it was a challenging quarter in terms of profitability as most of our businesses recorded marginal contraction owing to the combination of factors such as high-cost inventory, input cost inflation, deferment of sales and limited transmission. The decline in margin was witnessed in animal feeds, crop protection, and dairy businesses while vegetable oils and poultry segments reported growth in the operating margin”. 

On the macro front, the arrival of the south-west monsoon was late by a few weeks and therefore, led to a delay in sowing of kharif crops, especially cotton. Soyameal prices declined sharply in May 2022 as the Centre allowed the import of GM soyameal to the tune of 0.55 million tonnes. 

During the quarter, year-on-year volume and revenue growth of 11.4 per cent and 24.4 per cent, respectively in animal feed was driven by market share gains. Volume growth was recorded across key categories - cattle (+12% year-on-year), broiler (+20%) and layer (+8%). Vegetable oil segment revenues and segment results grew by 33.4 per cent and 163.2 per cent year-on-year respectively during the period on account of improvement in oil extraction ratio (OER) coupled with record high oil prices. Prices of crude palm oil and palm kernel oil increased by 24 per cent and 41 per cent year-on-year, respectively, during the first quarter.

The crop protection segment was impacted by delayed monsoon and deferred application of agrochemicals. The segment reported a 17.6 per cent year-on-year decline in revenues. Strict focus on channel credit hygiene also led to lower sales as compared with the last year. Segment results stood at ₹26.1 crore compared with ₹64.0 crore in the same period last year.

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Published on July 30, 2022
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