Led by animal feed and dairy businesses, Godrej Agrovet will see 15% growth in topline this fiscal

Diversified agri business company Godrej Agrovet Ltd (GAVL) is expecting 14-15 per cent growth in topline this fiscal primarily backed by value growth in its animal feed business. The company’s topline grew by around 12 per cent to close to ₹5,900 crore in FY19.

According to Balram Singh Yadav, Managing Director, Godrej Agrovet, the growth in turnover would also be supported by better performance in some of its verticals including agro chemicals and dairy businesses.

Godrej Agrovet has several business verticals including animal feed (which accounts for nearly 50 per cent of its total business), crop protection, oil palm, dairy, poultry and processed foods.

“We had grown by around 10-12 per cent last fiscal to ₹5,900 crore. We are aiming at ₹7,000 crore topline this fiscal and we hope to achieve at least 14-15 per cent jump in the current fiscal,” Yadav said.

Yadav was in town to announce the launch of Hanabi — a specialist to control red spider mite, a serious pest in tea plantations. Produced in Japan, GAVL would make it available for tea planters in India through a licensing arrangement with Nissan Chemical Corporation, Japan.

The company also expects a better profit margin and a PBT of 7-8 per cent this fiscal, as compared with 3 per cent registered in FY19.

“We expect our profit after tax to grow by 17-18 per cent on the back of the decline in corporate tax,” he said.

The growth in business and profitability would be despite the fact that the country has been facing several challenges in the agriculture space due to drought and flood in several regions and the tough economic conditions, he pointed out.

Exports to grow

Animal feed is dependent on commodity prices and when input costs increase then the price of feed increases leading to a growth in topline. However, the bottomline may not keep pace with the increase in topline thereby exerting a pressure on the company’s margins. The demand for animal feed has been “good” for the first eight months of this fiscal, he said. Godrej Agrovet sees lot of potential in exporting agro-chemicals as India was gradually turning out be more competitive than the Chinese counterpart. The company had taken over Astec Lifesciences about four years back to foray into exports.

The company’s agrochemicals business, which is primarily B2C (business to consumer) and Astec, which is largely into exports, together have a turnover of around ₹1,150 crore.

“We expect our revenues from agrochemicals business to double in the next five years. India will grab a major share of the agro chemicals market from China as it is increasingly becoming competitive,” he said.

Exports account for nearly 67-68 per cent of Astec’s total turnover of around ₹550 crore.

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