Godrej Agrovet Limited — Investor Meet, 07-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Godrej Agrovet demonstrated solid profit growth in Q3 FY25, with notable performance from the vegetable oil, animal feed, and poultry sectors. EBITDA margins improved by 200 basis points, aided by a favorable commodity environment. The animal feed segment saw EBIT per ton rise 45% year-over-year, reflecting a jump in margins from 4% to 6%. The vegetable oil segment recorded a 45% increase in revenue, driven by higher crude palm oil prices, despite flat arrivals of fresh fruit bunches. Overall, the company's revenue growth was moderate but positive across several segments.

**Future Outlook and Growth Drivers:** Management emphasized strategies for maintaining growth, highlighting expectations of market recovery, especially in the dairy and poultry segments. Initiatives for cost efficiency and innovation in product offerings are set to continue. The focus will be on expanding direct farmer procurement and increasing volumes across the animal feed and dairy segments. There is optimism around growth prospects in the crop protection business as market conditions stabilize.

**Order Book and Operational Updates:** The order book remains stable, with management confident in maintaining growth despite recent challenges. Key projects are anticipated to contribute to future revenues, especially in the animal feed and dairy divisions.

**Analyst Q&A Insights:** Analysts expressed concerns regarding the sustainability of margins in animal feed and the crop protection segment challenges due to lower pest crises. Management responded with a cautious but optimistic outlook, noting the potential for improved performance in Q4 and beyond. Capital allocation and debt management were also emphasized, with plans to reduce working capital needs.

**Strategic Focus Areas:** Management is committed to innovation and market expansion, prioritizing direct farmer relationships and the introduction of higher-margin products.

**Investor Insight:** Given the robust financial performance, positive outlook, and strategic focus on innovation and cost efficiency, this stock appears positioned for a **'buy'** stance. However, investors should remain aware of potential volatility in the crop protection and CDMO segments, balancing out the overall positive sentiment.