Godrej Agrovet

Godrej Agrovet delivered a strong Q4 FY26, with consolidated revenues growing 9% year-on-year to INR2,333 crores. Profit before tax (excluding non-recurring^📎 and exceptional item^📎s) increased 16.8% to INR87 crores. For the full fiscal year 2026, the company surpassed INR10,000 crores in consolidated revenues, reaching INR10,233 crores, a 9% year-on-year growth. Full-year PBT (excluding non-recurring^📎 and exceptional item^📎s) increased 17.2% year-on-year to INR569 crores, reflecting improved earnings quality and margin expansion.

The company is undergoing a fundamental strategic shift from a commodity-centric to a market-customer facing approach across all its businesses. This involves moving Animal Nutrition from a feed business to a nutrition mindset, Crop Care from product chemistry to product innovation and branding, and Oil Palm from a volume-led upstream player to a full-fledged value-added player. This transformation is expected to accelerate over the next two years, with full realization over four to five years, aiming for more consistent revenue growth and improved ROCE.

Animal Nutrition showed strong Q4 volumes, up 15% YoY, with cattle feed volumes increasing 24%, driven by new products and cost optimization. The Oil Palm business achieved record area expansion and high oil extraction ratios, with plans to beat this record in FY27 and grow value-added products to 50-55% of its portfolio by FY31. Crop Care was impacted in Q4 by inventory carry-forward but is expected to see a 'very strong recovery' with 'very high double-digit numbers' from Q2 FY27, driven by new product launches like Ashitaka and TAKAI.

Astec LifeSciences achieved EBITDA break-even in FY26, demonstrating strong turnaround momentum. Q4 saw robust revenue and EBITDA growth, driven by higher CDMO volumes, improved realizations, and better capacity utilization. The company aims for 15-20% top-line growth in FY27, with a continued focus on CDMO-led expansion. Recent board augmentations, including Mr. Vishal Sharma as Non-Executive Chairperson and Mr. Arijit Mukherjee as Executive Director, are expected to strengthen leadership and accelerate growth by leveraging Godrej Industries Group's chemical expertise.

Godrej Agrovet plans approximately INR400 crores in capex for FY27, with 75-80% dedicated to growth initiatives, including about 50% for the oil palm business. Despite this investment, the company expects a cash surplus of INR100-125 crores for FY27. Management emphasized a commitment to a consistent dividend policy, historically in the 48% payout range, and highlighted a significant improvement in Return on Capital Employed (ROCE) from 16% to 20% in FY26 due to disciplined working capital management.

In Crop Care, the company is diversifying its portfolio beyond cotton herbicide, with new products like Ashitaka (maize herbicide) and TAKAI (rice plus insecticide) launched. These are expected to contribute 16-18% of the business in FY27, up from ~3% in FY26. In the Foods business, new entries into momos and frozen chicken are planned, with a strategic move away from the live bird trading business to focus on value-added, branded offerings. This aims to create new categories and insulate the business from commodity price volatility.

Management acknowledged potential impacts from the Iran war, which could affect palm oil prices positively and crop protection negatively, and predictions of a below-normal monsoon due to El Niño. They noted that the El Niño's impact is geographically and temporally variable, with oil palm being less affected short-term. Mitigation strategies include internal interventions, leveraging the 'demographic dividend' in oil palm (maturing juvenile trees), and the strategic shift towards value-added products to insulate from price volatility.