Godrej Agrovet Ltd's consolidated revenue for Q3FY19 was reported at Rs1,454.1cr, up 19.1% yoy. The operating EBITDA for the quarter came in at ~Rs100.98cr, a marginal increase of 4.2% yoy. The operating EBITDA contracted ~100bps yoy to 6.9% in Q3FY19. The adjusted consolidated net profit after tax (attributable to equity shareholders) stood at Rs40.9cr for Q3FY19, up 9.1% yoy. The consolidated revenue is in-line with the consensus estimates. However, EBITDA and PAT missed the consensus estimates of Rs117cr and Rs59cr by 14% and 31%, respectively.
• In Q3FY19, consolidated revenue growth was driven by higher sales in the vegetable oil and crop protection businesses.
• The company’s gross profit margin declined by ~176bps yoy to 21.9% in Q3FY19 majorly because high raw material costs were not passed on on account of subdued farm income and a weak rabi season.
• EBITDA margin declined by ~100bps yoy to 6.9% in Q3FY19 due to pricing pressures under the animal feed segment and lower operating segment under the domestic crop protection business. Besides this, the other expenses increased by ~15.1% yoy to Rs141.9cr during the quarter.
• The Animal feed segment revenue increased by 18.4% yoy to Rs766cr in Q3FY19. It witnessed a volume growth of 12.5% driven by momentum in layer feed and broiler feed during the quarter. However, lower operating leverage under aqua feed due to cost pressures led to decline in the segment EBIT by 39% yoy to Rs23.7cr. The segment EBIT margin declined by ~292bps to 3.1%.
• Godrej Agrovet is the largest domestic producer of crude palm oil and palm kernel oil. Segment revenue from vegetable oil increased by 33.6% yoy to Rs181.2cr in Q3FY19. The segment EBIT during the quarter increased by 26% to Rs31.9cr in Q3FY19. The EBIT margin fell by ~106bps yoy to 17.6%.
• Crop Protection business - Revenue increased significantly by 47.9% yoy to Rs230.5cr in Q3FY19. The standalone crop protection business of the company remained strong backed by traction in plant growth regulator and insecticides. This was also supported by revenue and profit growth, especially exports, under Astec Lifesciences. The EBIT margin contracted by ~519bps to 17.8% due to a drag in domestic business performance and shift towards traded products (lower margin) during the quarter. The project on backward integrated products have become fully operational during the quarter.
• Dairy segment revenue remained flat at Rs277.9cr in Q3FY19. However, there was an improvement in EBIT margin by ~88bps to 4% in Q3FY19 due to better pricing scenario. The company’s focus remains on strengthening the Jersey brand with continued marketing investment in the states having its presence.
• Revenue under ACI Godrej Agrovet Private Limited, Bangladesh declined by 6.1% yoy during Q3FY19. Revenue under Godrej Tyson Foods Ltd increased by 16.2% yoy to Rs128.3cr in Q3FY19.
Godrej Agrovet Ltd ended at Rs491.60, down 2.4 points, or 0.49%, from its previous close of Rs494 on the BSE. The scrip opened at Rs494.85 and touched a high and low of Rs497.40 and Rs487.40, respectively. A total of 42,112 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200-DMA.
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