Godrej Agrovet (GAVL), a diversified agribusiness company, is doubling its capital expenditure to over ₹500 crore in the current financial year and plans to make major investments in Astec Lifesciences, the agrochemical active ingredients subsidiary. The company has been incurring a capex of ₹200-250 crore annually in recent years.

Of the ₹500 crore capex planned for the year, more than ₹300 crore will be invested in scaling up Astec Lifesciences, where we see big growth opportunity, said Balram Singh Yadav, Managing Director, GAVL. The rest will be invested in marginal capacity expansion of other business.

GAVL had acquired Astec LifeSciences — which manufactures a range of fungicides, insecticides, herbicides and intermediates for global customers — in August 2015.

“We are very optimistic on Astec. A lot of investment is going to get committed in Astec Life sciences over the next three years during which we expect to double the capacity,” he said.

Scaling R&D

“Our strategy is to create technology platform. We are very good in Triazole platform, then we created our capability in Sulphonyl urea and pyrdimines. Similarly, we have 2-3 more platforms in which we want to invest for which we need to build capabilities first. We have a very good R&D centre coming up at Rabale with an investment of ₹125 crore and that will open up a lot of opportunities in contract manufacturing,” Yadav said.

GAVL expects to commissioning the R&D centre for Astec in October, which will be almost triple the existing facility in Dombivili.

“We is also scaling up our R&D team to over 200 scientists,” he added.

Revenue growth

GAVL reported an 18.5 per cent growth in net profits to ₹408.5 crore for FY22, while its revenue grew 32.7 per cent to ₹8,306.1 crore from the previous year.

Astec LifeSciences reported 22 per cent growth in revenue to ₹676.6 crore during FY22, aided by higher realisations in exports, favourable product mix and operational efficiencies. Exports accounted for 57.7 per cent of Astec’s revenues and registered a 44.4 per cent growth during the year.