Q1FY24 Results:
- No sales growth YoY.
- Reduction in materials cost increased YoY profit
Links:
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In my view, Results are actually goodâŚ
Their operating margins were shrinking since last few quaters⌠Finally there is a big uptick there.
Ebidta margins at 8.2% vs 6.7% YOY, it was about 4% last quaterâŚ
Going forwards one need to see, if they can sustain this margins and at the same time increase their toplineâŚ
They have guided for 11-12k topline this year, so I am expecting better sales numbers going forward.
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The company is experiencing good traction on their crop yield enhancer product (Double) due to a change in packaging structure.
Rajavelu NK, CEO â Crop Protection Business, Godrej Agrovet, says âIt is encouraging to get amazing feedback from our channel partners in Maharashtra, Madhya Pradesh and Gujarat. The overwhelming acceptance of our innovative packaging, coupled with the unwavering momentum we enjoy in the market, fills us with great optimism as we eagerly anticipate the upcoming Plant Growth Regulator (PGR) season.â
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Previous guidance: FY24âs topline should be between 10 to 11k.
- Q1FY24âs revenue was ~2500.
- H1 v/s H2 Revenue split is 60:40
Guidances from concall Q1FY24:
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Astec: Some products still have headwinds⌠Aiming to double revenue from CDMO biz ever year for the new couple of years⌠However, FY25 onwards target is 20-25% growth.
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Dairy Biz (15% FY23 Revenue): âHoping to be PBT positive in this quarterâ
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Palm Oil (13% of FY13 Revenue): âNo way our OER will be below last year on an annual basis⌠Possible for us to plant is close to about 100,000 hectares over and above the area we have in the next 5 to 6 years. The kind of infrastructure of nursery and other people we have created, we will ramp up our planting every year from 3,000, 4,000 per hectare in last year to about 10,000 to 12,000 going up to 15,000, 16,000 in 5 yearsâ time. The first results of this addition we will start seeing from
FY 28, FY 29 and full impact, you will see in FY 30 and FY 31.â -
Animal Feed (50% of FY23 revenue):
a) EBITDA margin should be back to FY22 levels - Q1FY23 is @4.2% (If I am not wrong them margin was 5ish% in FY22)âŚ
b) Volume growth 8% to 10% -
Demergers? âWe are working on I thi⌠So I think we are moving in that direction thereâ
Link to transcript: https://www.bseindia.com/xml-data/corpfiling/AttachLive/9b353407-ab98-4ec9-b64f-633d7969c3c6.pdf
Godrej Agrovet
On Palm oil business - some interesting stats - from their concall.
Their existing Palm oil plantation of about 25k to 30k Hector
(45k Hector in total, but 60% mature )
This year Palm oil revenue: 1300 Cr, PAT of 249 Cr.
From new allocation ( in Odisha & Telangana )=Theoratically possible Plantation is close to 100k Hector
Thatâs about 4X from current levels ( 25-30 k Hector ) in next 5-6 yearâŚ
Moreover, Goverment is encouraging more palmoil production at home and thus, in my view, this allocation of land MAY increase going forward as wellâŚ
All in all, I am expecting significant jump in revenues from palm oil business going forward. Obviously not in short term but in long term.
Disc: Invested, biased views
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The company entered into an agreement
- Agreement: With Sime Darby Plantation Berhad (website)
- Purpose: SDP will supply high-quality oil palm seeds to Godrej Agro and later set up a state-of-the-art seed production unit in India.
- About SDP: Malaysia-based, one of the largest producers and exporters of palm oil in the world
Source: Link
Disclaimer: Invested (Portfolio). Not a buy/sell recommendation
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Precision Fermentation and the Disruption of the Palm Oil Industry - Rethink Disruption
Will Precision Fermentation be a threat to the company in 10-15 years?
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Good result by Godrej agrovetâŚ
Revenues up by 5%
Ebidta up 35% YoY
PBT up 53% YoY
Dairy Segment has turned Positive this quater as wellâŚ
Disc: Invested. Added more recently as well.
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What worked
- Animal Feed: 3.90KT this qtr, 2% revenue up.
- Processed Food: Revenue 21% up yoy. Mngmnt claims margin improvement is sustainable (Here).
- Domestic Crop Protection: Q3 Rev 172Cr, margin improvement
- Dairy, Bangladesh business
What didnât work
- Commodity nature continues to impact profitability across different verticals
- Astecâs and Oil palm biz.
References: Presentation and Press release
Disclaimer: I may or may not be invested in Godrej Agrovet or its subsidiaries. I am not SEBI registered and this is not a buy or sell recommendation.
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Godrej Agrovet -
Q3 FY 24 concall and results highlights -
Revenues - 2345 vs 2324 cr, up 1 pc
EBITDA - 171 vs 160 cr, up 7 pc ( margins @ 7.3 vs 6.9 pc )
PAT - 85 vs 67 cr, up 27 pc
Segment wise revenues -
Animal Feed - 1291 vs 1272cr, up 1.5 pc
Vegetable Oils - 355 vs 362 cr, down 2 pc
Crop protection- standalone - 172 vs 100 cr, up 72 pc
Astec Lifeciences - 51 vs 117 cr, down 56 pc
Creamline Dairy - 366 vs 348 cr, up 5 pc ( sale of Value added products grew by 20 pc )
Godrej-Tyson foods - 223 vs 280 cr ( due sharp fall in live bird prices )
ACI-Godrej JV - 610 vs 600 cr, up 1.7 pc
Percentage of sale of value added products in the Dairy business increased to 36 pc vs 32 pc YoY
Investing aggressively behind Astecâs CDMO business. Should yield good results in medium term
Expecting better margins in Animal feed business in Q4 on the back of better realisations. Realisations for 9M FY 24 @ Rs 1435 / Ton vs Rs 1200 / Ton for 9M FY 23. Expecting these realisations to improve further
Witnessed healthy growth in cattle feed and aqua feed business. Was partially offset by de-growth in poultry feed business
Astecâs CDMO revenues got deferred from Q3 into Q4. Expect a better outcome in Q4
Seeing recovery in live bird prices in Q4. This should aid growth in Godrej Tyson business. Should also help in the recovery in layer feed and poultry feed business
Astecâs R&D engine should start firing as we go fwd. Should help in both CDMO and enterprise business. Expecting to grow CDMO business @ 30-40 CAGR for next few yrs
Astecâs enterprise business continues to be under pressure. The overstocking of agrochemicals in global mkts was to the tune of 12-18 months of consumption. Complete inventory correction may take some more time
CDMO business steady state margins are 5-7 pc higher than enterprise business
Disc : hold a small tracking position, biased, not SEBI registered
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