Godrej Agrovet Limited — Q4 FY26 earnings call

Overall, at a GAVL level, would like to look at we'd like to focus on getting an early double-digit revenue growth across put together at a consol level. Along with the way our PBT has improved this year, we'd like to again target a let's say a mid-strong double-digit, mid-teens kind of a PBT growth also for the next year.

Analyst sought specific FY27 guidance, and management provided directional targets while acknowledging macro uncertainties like the Iran war.

Asked by Abhijit Akella

So it's very, very difficult to give you a very long-term point of view, but I would say we'll take it by the quarter. And maybe I'll ask NBG, if NBG wants to also give any sense of what his take on this is right now. Mr. Godrej, would you like to? ... Yes, so we feel that there will not be a very bad impact on oil palm this year even if the monsoon is poor, because oil palm being a tree, it takes a long time to get affected.

Analyst probed on the impact of El Niño and volatile palm oil prices, to which management indicated short-term uncertainty but long-term resilience due to the nature of oil palm and internal 'demographic dividend'.

Asked by Abhijit Akella

Yes, hi Abhijit, this is Burjis speaking. I just want to say that we do believe that Astec has very strong underlying potential and this is supported by Godrej Industries Group's very deep chemical experience and manufacturing expertise. So we did make some recent management and Board changes which reflect our intent to leverage this expertise more effectively and accelerate value creation and synergies.

Analyst inquired about the recent management changes at Astec, and management clarified the strategic intent to leverage group expertise and accelerate growth, with a focus on CDMO.

Asked by Abhijit Akella

So I think on the animal nutrition business, I think it's a mix of some very, very strong execution which has been happening and some environmental support. So the one, let me first say the little bit part of the environmental support, I would not say that played the biggest role, is the fact that as when milk procurement prices remain so elevated, it does become a kind of a positive trigger for shift from unbranded to branded compound feed business because the farmers see the benefits of the income which they're generating from a better higher milk yield.

Analyst sought reasons for accelerated volume growth and margin stability in animal feed, and management detailed execution improvements, new product launches, and a positive environmental factor (high milk prices).

Asked by Abhijit Akella

Look, in our sort of businesses, currency management or currency volatility is a part of a structurally we approach to it, right? But you have to remember that we are a net exporter. So once ever the depreciation happens and the export realization actually offers a natural hedge to the imports.

Analyst questioned the impact of China sourcing (47% of imports) and currency depreciation, and management explained that being a net exporter provides a natural hedge.

Asked by Maneesh Bhadane

Now, one thing which is going to shift drastically over the next 5 years is that we are diversifying our portfolio very sharply. Obviously, products take time to come out of this, but we are going to move away from two crop segment product to a multi-crop segment product company. ... One is something which got launched in the month of December last year, which is Ashitaka, which is our first maize entry, which is a maize herbicide. ... The second is we are entering into a rice plus insecticide segment through a product which is called TAKAI, which is actually a multi-crop insecticide, although its lead application is paddy.

Analyst asked about new product launches in Crop Care, and management detailed a significant strategic shift towards multi-crop diversification with specific new products (Ashitaka, TAKAI) expected to drive substantial growth.

Asked by Sumant Kumar

But I hear your question loud and clear that, what is it that you're seeing? And first of all, thank you for noting down some of the shifts that we're making. So one fundamental piece over the next two years what you can expect is that the one, see any transformation takes four-five years to happen fully. And specially in a business like us which is a multi-segmental business. But the shift that you'll start seeing in the from -- already started panning out in the next two years is that, we will move from fundamentally from a commodity-centric thinking to a market-customer facing approach, whatever the nature of the entity itself is right now.

Analyst sought clarity on GAVL's strategic direction for the next two years, and management outlined a fundamental shift from commodity-centric to market-customer facing, emphasizing innovation and value-added products across segments.

Asked by Aejas Lakhani

So, one thing is live trading per se is coming down sharply for us and over this next four-five-year period and I think more accelerated manner, we would not be in the business of selling live birds. That is very clear. That trading we don't want to do. ... Now, what is happening in this business is that there is a potential of doing a category creation altogether in this business. That one of the reasons why fresh chicken never sold was because there's a shelf life of four days. Now, with frozen chicken, the shelf life changes.

Analyst questioned the future of the live birds business, and management confirmed a strategic exit from live bird trading to focus on value-added products like frozen chicken, leveraging quick commerce for category creation.

Asked by Probal Sen