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NSE Aug 18, 2022 09:07 AM
Agricultural products company Godrej Agrovet announced Q1FY23 results:
Commenting on the performance, Mr. B. S. Yadav, Managing Director, Godrej Agrovet Limited, said: "Godrej Agrovet started financial year 2022-23 with a robust growth in volumes and topline in the first quarter ended June 30, 2022. All of our businesses, with the exception of Crop Protection, registered a strong volume growth. We achieved year-on-year growth of 25.7% to clock total income of Rs. 2,517.5 crore in Q1 FY23. However, it was a challenging quarter in terms of profitability as most of our businesses recorded margin contraction owing to combination of factors such as high cost inventory, input cost inflation, deferment of sales and limited transmission etc. Decline in margin was witnessed in Animal Feeds, Crop Protection and Dairy businesses while Vegetable Oils and Poultry segments reported a growth in operating margin.
On Macro front, the arrival of south-west monsoon was late by few weeks and therefore, led to delay in sowing of Kharif crops, especially Cotton. Soymeal prices declined sharply in May 2022 as Government of India allowed import of GM soymeal to the tune of 0.55 million MT. Crude Palm Oil prices reached record high levels in May 2022 owing to three-week exports ban by Indonesian Government, a largest producer and exporter of palm oil. Prices have been gradually correcting since the lifting of exports ban in the last week of May. In Dairy sector, milk procurement prices continued to increase further along with other input costs as well. In Poultry sector, live bird prices were considerably higher than the previous year and remained well above the feed costs.
Our Animal Feed business recorded double-digit growth in volumes, however suffered from high cost inventories of key raw materials. Vegetable Oil business continued to reap benefits of higher oil prices and improved efficiency levels as segment results grew by 2.6x year-on-year. Standalone Crop Protection business was impacted by deferred liquidation on account of delayed Kharif sowing and lower placements to maintain channel hygiene. Astec LifeSciences reported another quarter of significant increase in topline; however, growth was constrained by deferment of revenues while margin contraction in one of the products impacted bottomline performance. Both of our Food businesses reported strong volume growth year-on-year. For Poultry and Processed Food business, Q1 was a very good quarter led by favorable demand dynamics in Real Good Chicken (RGC) and significant increase in Live Bird prices throughout the quarter. Our Dairy subsidiary, Creamline Dairy achieved further market share gains in key value-added products registering 47.6% topline growth. However, sustained rise in procurement and packaging costs led to subdued profitability
During the quarter, Godrej Agrovet successfully completed submission of Greenhouse Gas (GHG) emissions reduction roadmap target in line with Science Based Target’s (SBTi) “Well Below 20C” scenario. In doing so, GAVL became first Agri company in India to commit to reduction in Scope 1 & Scope 2 GHG emissions by 37.5% and Scope 3 emissions by 16.0% by FY 2035. We also continued to make good progress in achieving 2025 sustainability targets."