Godrej Agrovet (GODREJAGRO) Q2 24/25 earnings summary

Executive summary

• Profitability improved across most segments, with EBITDA margins up 17 bps year-over-year and 130 bps excluding Astec LifeSciences in Q2 FY25; H1 FY25 EBITDA grew 8.3% to ₹456 Cr, margin at 9.5%, and PAT increased 9.8% to ₹236 Cr.

• Revenue declined 5.6% year-over-year to ₹4,799 Cr in H1 FY25, with Q2 FY25 revenue at ₹2,449 Cr, down 4.8% year-over-year.

• Segment performance was mixed: Animal Feed and Crop Protection saw strong margin growth, while Astec LifeSciences and poultry faced headwinds.

• Succession planning for senior management is underway, with a smooth transition expected for the upcoming CEO retirement.

• Standalone and consolidated unaudited financial results for the quarter and half year ended September 30, 2024, were approved, with statutory auditor review reports expressing unmodified conclusions.

Financial highlights

• Animal feed segment margins rose from 4.6% to 5.9% year-over-year, with EBIT per metric ton up from INR 1,531 to INR 1,953; H1 FY25 segment margin at 6.3%.

• Crop protection segment margins increased from 30% to 43% year-over-year, despite a 24% revenue decline; H1 FY25 EBIT up 40.4% year-over-year, margin at 44.4%.

• Dairy EBITDA margins improved by 140 bps, driven by operational efficiency and improved milk spread, despite flat revenue; H1 FY25 revenue up 2.0% year-over-year, EBITDA margin at 5.4%.

• Poultry segment revenue and margins declined due to lower live-bird volumes and unfavorable product mix; H1 FY25 revenue down 21.2% year-over-year, EBITDA margin at 6.8%.

• Consolidated Q2 FY25 revenue was ₹2,448.75 crore, with net profit at ₹131.94 crore, nearly flat year-over-year.

Outlook and guidance

• CDMO business at Astec is expected to achieve 50% revenue growth year-over-year, targeting INR 400 crores for FY25.

• Value-added product salience in dairy is expected to recover to about 40% by year-end after seasonal decline.

• Oil palm segment expected to benefit from higher prices and margins in H2, with an upside of INR 13–15 crore anticipated.

• Cattle feed demand rebounding, with a 10% volume jump in October over September, indicating growth in H2.

• Astec LifeSciences aims to break even and return to profitability in Q4, contingent on securing new contracts.