Godrej Agrovet Ltd. share price target

We roll forward to FY23 estimates and upgrade GOAGRO to BUY (from Accumulate) with SoTP (Exhibit 1) based target price of Rs 639 (previous 587). The company reported better than expected results driven by higher than anticipated margins in Animal Feed (@7.1% v/s PLe of 4.9%) and Crop protection (@20.3% v/s PLe of 18.6%) segment. Animal feed volumes were impacted by bird flu in Q4, but margins expanded by >300 bps due to commercialisation of R&D; initiatives. Increased sale of in-house products (up...

GOAGRO's strong 4QFY21 performance was aided by all segments and low base of 4QFY20. EBITDA margin expanded 440bp YoY due to lower raw material costs (-340bp YoY), which led to an EBITDA growth of 133%. All...

We maintain reduce rating (TP- Rs 676) on CRIN due to capacity constraints in NPK and likely headwinds on the raw material side starting 4Q. We are positive on Urea companies given healthy volumes and significantly lower...

GOAGRO reported lower than expected results driven by subdued performance from Animal feed & Palm oil segment. Animal feed demand remains impacted by slowdown in out-of-home consumption of dairy products and animal protein. Similarly, in palm oil segment, processing volumes took a big hit due to lower arrivals of Fresh Fruit Bunches (FFB) given white fly attack in AP & TG. While GOAGRO is getting its mojo back by (a) margin expansion across key segments (b) expected volume build up in...

GOAGRO's 3QFY21 revenue decreased by 14% YoY due to a 23%/17%/10% decline in the Animal Feed (AF)/Palm Oil/Dairy segment. However, EBITDA margin expanded due to lower raw material costs, which led to 12% EBITDA growth. Margin expansion was witnessed in AF and Processed Foods and Dairy, but contracted in Palm Oil and Crop Protection (CP). Factoring in the below expected performance during 3QFY21 (mainly due to Palm Oil, AF, and CP), we decrease our FY21E PAT estimate by 7%. We have maintained the same for FY22E/FY23E as performance in 3QFY21 was...

Production disruption caused by the extended lockdown resulted in lower-than-expected sales volume of higher-margin specialty 45%/302% due to strong volumes and higher realizations in the enterprise declined 26% YoY and stood at INR2.4b with EBIT margin contracting 70bp to 1.4%. GOAGRO's CP business is expected to be on strong footing due to (a) product launches in the standalone CP segment, (b) strong performance in Astec owing to its expertise in triazole chemistry, and (c) commencement of a new herbicide In the AF segment, increase in chicken/milk prices should improve farm profitability, thereby driving demand for broiler/cattle feed. Crop protection segments performance was impacted as the company took a conscious call to reduce the receivable for The company launched new herbicides during the quarter Delete Aqua and Production disruption caused by the extended lockdown resulted in lower-than- expected sales volumes of higher margin specialty products.

Domestic agrochemical industry is expected to grow +20% YoY in Q1 driven by massive surge in herbicide sales, pre-buying led by robust demand expectation and ~5% price increase in generic molecules. Geographically, North India followed by South is expected to drive growth. Also, crop wise Rice will be the single largest growth driver for the industry driven by acreage expansion and shift from transplanting rice to Direct Seeded Rice (DSR). Molecules like Bispyribac Sodium (Key player PI Ind- Nominee Gold), Pyrazosulfuron (UPL- Saathi, Dhanuka- Cempa) Pendimethalin (UPL- Dost...

GOAGRO's results were significantly impacted due to COVID and lockdown measures leading to significant erosion in topline and profitability in the core business. Many one-offs and adjustments have impacted YoY comparison, but indicatively adjusted sales/EBITDA/APAT came at +2%/-5%/+38% YoY @ Rs 14.6 bn/ Rs 648 mn/ Rs 272 mn resp. Though its products fall under essential categories list the outlook continues to be grim for a while, as many...

12 May 2020 Ex-Tyson Foods (absent in the base quarter) and sale of land, GOAGROs revenue declined 1%. On the other hand, EBITDA increased 9%, aided by performance in Crop Protection (CP) and Palm Oil, which was offset by Animal Feed (AF) and Dairy. Although quarterly performance was above our estimates, we maintain our estimates for FY21/FY22 due to the current uncertain scenario. Revenue improved 7% YoY to INR14.9b (v/s est. INR13.4b), largely attributable to growth in CP, Dairy, and Godrej Tyson Foods (absent in the base quarter). EBITDA margins contracted 220bp YoY to 3.2% (v/s est. They were weighed by margin contraction in AF, Dairy, and Godrej Tyson Foods, whereas they were offset by margin expansion in CP. However, higher other income restricted PAT decline to 10%. FY20 revenue/PAT grew 15%/6%, while EBITDA declined 10%. revenue remained flat YoY (at INR8.

6 February 2020 GOAGROs 3QFY20 revenues were up 23% YoY (+12% ex-Godrej Tyson Foods as it was absent in the base quarter) while EBITDA stood flat due to margin contraction in crop protection (CP), dairy and Godrej Tyson Foods. However, PAT grew 26% YoY due to the lower tax rate. Revenue grew 23% YoY to INR17.8b (v/s est. INR17.7b) attributable to growth in animal feed (AF), palm oil and Godrej Tyson foods. EBITDA margins contracted 130bp YoY to 5.6% (v/s est. 7.7%) due to margin contraction in crop protection (CP), dairy and Godrej Tyson Foods. PAT was up 26% due to lower tax rate and higher other income. 9MFY20 revenue/PAT grew 18%/8% YoY, while EBITDA declined 5% YoY. Although EBIT/kg grew 37% YoY to INR1/kg, it declined 23% QoQ due lower share of high-margin shrimp feed sales and sale of feed to Godrej Tyson Foods (subsidiary company) at no profit.