Godrej Agrovet Q2 FY 25 revenue and profit down 4.8% and 1.1% respectively
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Godrej Agrovet Q2 FY 25 revenue and profit down 4.8% and 1.1% respectively

Astec LifeSciences topline and profitability was severely impacted due lower realizations in key enterprise products

  • By ICN Bureau | October 30, 2024

Godrej Agrovet Limited (GAVL) Q2 FY25 revenue reached Rs. 2,449 crore, a degrowth of 4.8% whereas Profit After Tax (PAT) reached Rs. 104 crore, a degrowth of 1.1%.  

Commenting on the performance, B. S. Yadav, Managing Director, Godrej Agrovet Limited said, Godrej Agrovet continued to deliver robust improvement in profitability with the exception of Astec LifeSciences and Poultry business. EBITDA margins (excluding non-recurring items) improved in Q2 FY25 by ~70 bps and ~130 bps excluding Astec as compared to Q2 FY24. All the segments, with the exception of Astec LifeSciences and the Poultry business achieved growth in profitability.

Domestic Crop Protection business achieved a significant improvement in segment margins, primarily due to lower doubtful debts & control over fixed costs. Topline declined compared to the previous year due to erratic rainfall across key states which resulted in reduction in spraying opportunities in herbicides category.

Animal Feed business also witnessed a remarkable improvement in segment margins due to favorable commodity positions & cost optimization measures. However, the overall volume growth was impacted by subdued growth in cattle feed due to lower milk prices, while the Layer and Broiler feed grew y-o-y & sequentially.

Dairy business continued its upward trajectory, with profitability significantly improving compared to Q2 FY24. Consistent operational efficiency improvements and a favorable milk spread contributed to this improved performance.

In the Vegetable Oil business, higher realizations in respect of end products coupled with an improved Oil Extraction Ratio (OER) led to enhanced segment margins in Q2 FY25 compared to the same period previous year, despite lower FFB arrivals.

Astec LifeSciences topline and profitability was severely impacted due lower realizations in key enterprise products coupled with lower-than-expected volumes in the CDMO segment due to cautious approach adopted by CDMO customers. However, gradual uptick in demand resulted in sequential improvement in performance. In a seasonally weak quarter for the Poultry business, while live bird volumes decreased in line with our strategy to focus on branded business, branded volumes improved marginally resulting in shrinking of the topline. Profitability was severely impacted due to unfavorable channel & product mix and elevated input cost.

Animal Feed Segment margin improved y-o-y due to favourable commodity positions & cost optimization measures. EBIT/MT improved significantly from Rs. 1,531 in Q2 FY24 to Rs. 1,953 in Q2 FY25. Marginal de-growth in volumes primarily on account of lower volumes in cattle feed due to lower milk prices. Layer and broiler feed volumes grew sequentially by 21.6% & 2.0% respectively and improved y-o-y by 10.8% & 5.5%, respectively.

Vegetable Oil higher realizations in both Crude Palm Oil (CPO) & Palm Kernel Oil (PKO), improved Oil Extraction Ratio (OER) & downstream value added products improved profitability in Q2 FY25 y-o-y. In Q2 FY25, despite a 13% decline y-o-y in Fresh Fruit Bunch (FFB) arrivals, segment revenue was flat y-o-y due to improved realizations in both CPO & PKO. Also, the Government has increased the basic customs duty on crude soybean, sunflower, and palm oil from 0% to 20% & duty on refined oils has been raised from 12.5% to 32.5% w.e.f from September 14, 2024.

Crop Protection (Standalone) Erratic rainfall across key states resulted in reduction in spraying opportunities by farmers impacting volumes of herbicides category. This also resulted in higher sales returns impacting topline in Q2 FY25. Segment results grew by 10% y-o-y primarily due to lower doubtful debts and control over fixed cost.

Astec LifeSciences Topline & profitability was marred by lower realizations in key enterprise products coupled with lower-than-expected volumes in CDMO segment due to cautious approach adopted by CDMO customers. Sequential improvement in performance due to gradual uptick in demand. 

Dairy Segment revenue was flat y-o-y due to volumes remaining at similar levels. EBITDA margin improved by ~140 bps in Q2 FY25 due to significant improvement in operational efficiencies and improved milk spread. Salience of Value-Added products (VAP) stood at 32% of total sales in Q2 FY25.

Godrej Tyson Foods Limited revenues declined in Q2 FY25 as compared to Q2 FY 24, primarily due to lower volumes in live bird business as GTFL continued to focus on branded business & reduce exposure to live bird business. In Q2 FY25, while volumes in branded segments improved marginally, profitability was adversely impacted y-o-y, in a seasonally weak quarter, due to unfavorable channel & product mix and elevated input cost.

ACI Godrej posted revenue de-growth of 6% year-on-year (in local currency terms) in Q2 FY25 due to economic headwinds in Bangladesh amidst political turmoil and severe floods.

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