My Notes About Godrej Agrovet
Agri Sector
– Provides livelihood for ~55% of India’s population. This number has been de-growing and is expected to further reduce over the longer period.
– From FY16 to FY22, agri exports grew at a CAGR of ~7.5% (from ~$32B to ~$50B)
– Detailed report on agri sector - here
– 
Overview of Godrej Group and Agrovet
- Over a 100 year old group (estd. in 1897)
- Godrej Agrovet is a subsidiary of Godrej Industries
- Journey of Godrej Agro
- Last 10 Years Revenue CAGR: 13%
- Largest feed and crude palm oil produced in India
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Godrej Agrovet Subsidiaries
- Company also has a couple of Joint Ventures and some investments in UAE. One of the JV is in Bangaldesh (agrochem) and another is a VC firm that invests in agri-startups.
- Has some investment in UAE but I have never been interested in their UAE investment so I’ll skip it.
Seasonality and Triggers
- During Drought: Cattle feed sales increase. However, other costs also go up and the impact is nullified at present [Page 7]
- Company is involved in a seasonal sector. However, it is working to reduce the seasonality effect
- Can take 5 to 7 years for the new processes to be set up and come into action
(infrastructure requirements, regulatory approvals, crop protection business, et cetera)
Capex
- Herbicide Plant worth Rs 500 Cr - to be commissioned by Dec’24
Valuation Comfort
There are a lot of different metrics that you can look at. However, this attracts me:
- Market Cap (9300) <= FY23 Sales (9300)
- Market cap at ATL v/s Profit at ATH: (Market Cap 5 years back was around 12k)
{This is a WIP post. I’ll update the notes as per time availability}
Disclaimer: Invested (PF sizing here). I may increase or decrease my investment at any time without informing anyone so please do your own research.