Godrej Agrovet

Astec LifeSciences was the primary drag on performance in FY25, posting a staggering INR 140 crore loss against an initial break-even budget. Management attributed this to a collapse in enterprise product prices and high-cost inventory, coupled with a slowdown in the CDMO business. For FY26, the company is conservatively guiding for a turnaround, expecting to be EBITDA positive. Growth is projected to be around 35% YoY, albeit on a low base, with 90% of this growth coming from existing molecules. The long-term strategy is to increase the share of contract manufacturing from 60% to 70-75% of the business.

The standalone GAVL business achieved its highest-ever profitability, driven by strong performance in core segments. The Animal Feed business saw its segment margin expand significantly from 4.6% to 6.1% in FY25, with EBIT per MT growing 28% to INR 1,973, thanks to favorable commodity positions. The Crop Protection business was a standout, delivering an impressive 40% segment margin. However, management has guided that this level is unsustainable, targeting a still-healthy 30%+ margin for FY26 as they invest in geographic and portfolio expansion.

The company's food segments faced challenges. In Poultry, Q4 margins declined as the company continued its strategic pivot away from volatile live bird sales, reducing its volume contribution to 32%. In Dairy, while the share of value-added products reached 37%, profitability was impacted by rising milk procurement costs. Management is focused on improving this segment's performance, guiding for an EBITDA margin expansion from 5% in FY25 to 6-7% in FY26, supported by increased ad spends, a 10% volume growth target, and expanding direct procurement to over 75%.

The Vegetable Oil segment delivered remarkable results in FY25, buoyed by higher crude palm oil prices. While Fresh Fruit Bunch (FFB) arrivals were down 8% for the full year, they saw a 10% YoY recovery in Q4. The outlook for FY26 is strong, with management expecting FFB arrival growth of approximately 18%. The company is also continuing its forward integration journey, with investments in refineries for palm kernel oil expected to add 1-1.2% to overall profitability in the coming year.

In a significant strategic signal, management confirmed they are actively reviewing the company's conglomerate structure to unlock shareholder value. The recent move to buy out minority stakes in JVs is intended to provide the flexibility needed for potential restructuring. For the overall business in FY26, Godrej Agrovet has guided for a robust 16% to 18% growth in both top-line and profit, which is expected to be driven entirely by volume growth rather than price inflation. This growth will be led by a recovery in Animal Feed, continued strength in Crop Protection, and a rebound in the Vegetable Oil business.