Summary
Godrej Agrovet Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 4, 2026 3:30 p.m. IST
Event Participants
Executives 5 Arijit Mukherjee, Burjis Godrej, Nadir Godrej, Sunil Kataria, S. Varadaraj
Analysts 6 Abhijit Akella, Aejas Lakhani, Ahmed Madha, Probal Sen, Sarvan Vora, Sumant Kumar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹7,900 crores | +9% YoY for 9M FY26; Q3 grew 11% YoY driven by Animal Feed and Veg Oil. |
| Profit Before Tax (Exc. Exceptional) | ₹482 crores | +17% YoY for 9M FY26; Q3 PBT grew sharply by 23% YoY. |
| Animal Feed Volume | 12% Growth | Driven primarily by cattle feed segment (+21% YoY). |
| Animal Feed EBIT/MT | ₹2,020 / MT | +₹83/MT YoY; improved from ₹1,937/MT in Q3 FY25. |
| Vegetable Oil Revenue | Various | +27% YoY; driven by 16% growth in FFB arrivals and record OER. |
| Oil Extraction Ratio (OER) | 21% | +30 bps YoY; reached an all-time high for the Q3 period. |
| Astec LifeSciences EBITDA | ₹5 crores | +₹10+ crores YoY; turned positive from a loss in the previous year. |
| Dairy EBITDA Margin | 3% | Softened due to 10% milk procurement cost inflation, especially in Maharashtra. |
| Foods Branded Salience | 81% | +400 bps YoY; strategic shift toward branded retail (RGC and Yummiez). |
Geographic & Segment Commentary
- Animal Feed: Consistently strong performance with 16.5% volume growth in cattle feed for 9M FY26. Management is utilizing state-specific products like ‘Doodh Vriddhi’ (East) and ‘Dhanalaxmi’ (West) to drive premiumization and conversion to branded feed.
- Vegetable Oil: Strong operational efficiency witnessed with FFB volumes rising 16%. The segment is undergoing capacity expansion with a new CPO plant in Khammam and a downstream refinery for value-added products (CBE/CBS) nearing completion.
- Astec LifeSciences: Revenue grew 33% YoY as enterprise inventory levels normalized to 2019-20 levels. CDMO inquiries have doubled since March, supported by “China Plus One” and new registrations in Europe and Brazil.
- Crop Protection Business (CPB): Revenue grew 37% YoY due to generics, but EBIT was flat due to unseasonal rains impacting high-margin products like Hitweed. Management is diversifying into maize (Ashitaka) and multi-crop insecticides (Takai).
Company-Specific & Strategic Commentary
- Portfolio Optimization: Management is at the “fag end” of a deep strategy review to prioritize high-growth/high-ROCE businesses. A formal announcement on capital allocation and potential structural changes is expected in early April 2026.
- Branded Retail Shift: Systematic reduction of “Live Bird” trading in the Foods segment is underway to transform into a pure-play branded retail organization. Yummiez now accounts for ~28% of branded food sales.
- Acreage Expansion: Record expansion of 15,000 hectares in oil palm plantations during 9M FY26, targeting 17,000-18,000 hectares by year-end, which is double the previous year’s pace.
- New Business Foray: The group’s pet food manufacturing plant is scheduled for commissioning within one month, marking a new category entry.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Astec EBITDA | Breakeven for FY26 | Management maintains guidance for full-year EBITDA breakeven despite top-line being slightly short of ₹500 Cr target. |
| Astec Revenue | 15% Growth (FY27) | Initial “first look” guidance; CDMO expected to grow faster than enterprise segment. |
| FFB Tonnage | 12%-15% CAGR | Long-term growth expected from acreage expansion and “demographic dividend” of maturing trees. |
| CPB Margins | 28% - 30% | Mid-term sustainable margin target for the domestic crop protection business. |
Risks & Constraints
| Risk | Context |
|---|---|
| Milk Inflation | 10% rise in procurement costs driven by global butter demand and domestic supply constraints in Maharashtra. |
| Base Effect (CPB) | Q4 FY26 results will be impacted by a heavy co-marketing base for Hitweed, which saw lower application this year. |
| Climate Volatility | Unseasonal rains and cyclones in Q3 devastated grape crops, impacting specialty product application and segment EBIT. |
| Global Pricing | While PKO prices remain at a premium due to coconut oil shortages, CPO prices are susceptible to global soft oil dynamics. |
Q&A Highlights
Astec Turnaround & CDMO
- Question: What is the outlook for Astec’s margins and China competition? (Ahmed Madha)
- Answer: Inventory has finally moved out of major geographies; demand is back to 2019-20 levels. CDMO margins are 1.5x higher than enterprise; the focus is on process improvements to counter Chinese price pressure (Arijit Mukherjee/Sunil Kataria).
Animal Feed Mix
- Question: Why did cattle feed grow so much (21%) and what is its EBIT profile? (Abhijit Akella)
- Answer: High milk prices encourage farmers to upgrade from unbranded to branded compound feed. Cattle feed now represents 54% of segment volume (Sunil Kataria).
Strategic Review
- Question: What is the objective of the value unlocking exercise? (Ahmed Madha)
- Answer: It is a portfolio choice-making process based on market attractiveness and our “right to win.” We will prioritize capital to top-end growth choices (Sunil Kataria).
Vegetable Oil Realizations
- Question: What is driving the divergence between PKO and CPO prices? (Aejas Lakhani)
- Answer: Shortage in coconut oil supply has pushed PKO (a Lauric oil) to a significant premium. This premium is expected to persist as coconut oil production is difficult to scale quickly (Nadir Godrej).
Key Takeaway
Godrej Agrovet delivered a resilient Q3 FY26, characterized by 11% revenue growth and a 23% jump in PBT. The performance was anchored by the Animal Feed segment, where cattle feed volumes rose 21%, and the Vegetable Oil business, which achieved a record 21% extraction ratio. Astec LifeSciences finally turned EBITDA positive after a prolonged slump, signaling a recovery in the enterprise segment and a doubling of the CDMO inquiry funnel. Strategically, the company is aggressively expanding its oil palm acreage (15k hectares in 9M) and pivoting the Foods business toward an 81% branded salience. While dairy margins remain compressed by 10% milk inflation and unseasonal rains impacted Crop Protection, management is nearing the completion of a structural portfolio review. Investors should watch for the April 2026 strategic update which will define capital allocation and the roadmap for unlocking shareholder value across its diverse segments.
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