Detailed Share Analysis
In this article, we are going to analyse the Godrej Agrovet Ltd stock in detail. Godrej Agrovet Ltd stock belongs to one of the highly diversified Indian Conglomerate the Godrej Group.
Godrej Agrovet Ltd – Stock Analysis
- Godrej Agrovet Ltd is a diversified and Research & Development focused Agri-business company, having headquarters in Mumbai.
- It holds a leading market position in the 5 business verticals : Animal Feed, Crop Protection, Oil Palm, Creamline Dairy Products and Poultry and Processed Foods.
- Innovation is a key driver of its business strategy. The company is constantly experimenting and looking for research-based solutions to improve farm productivity and thereby, the profitability of farmers.
- Strength of the ‘Godrej’ brand and its association with trust, quality and reliability help the company across segments, particularly in those involving direct sales to retail consumers.
Godrej Agrovet Ltd – Business Overview
The company offers its products and services across five different business verticals, viz, Animal Feed, Crop Protection, Palm Oil, Creamline Dairy Products and Poultry and Processed Foods.
1. Animal Feed
- Godrej Agrovet’s Animal Feed business is one of the largest organised players in the Compound Feed market in India, clocking over a million tonnes in annual sales.
- Its diverse portfolio of animal feed vertical includes the products in Cattle, Poultry, Aqua and Specialty Feed. All feed offerings are formulated with a deep understanding of the nutritional requirements of different breeds.
- The company has over its manufacturing plants over 32 states, equipped with quality assurance labs.
2. Crop Protection
- The Company’s Crop Protection business has a wide range of Agrochemical products that cater to the entire crop lifecycle.
- Its constantly evolving product portfolio includes Plant Growth Regulators & Bio-Stimulants, Soil conditioners & Organic Manures, Generic Agrochemicals and Specialised Herbicides, insectides, fundicides etc.
- Godrej Agrovet is the market leader in the domestic plant growth regulators (PGR) segment and one of the leading players in the cotton herbicide segment.
3. Palm Oil (Vegetable Oil)
- Godrej Agrovet is the one of the largest palm oil developers in India. The company works directly with the farmers during the entire lifecycle of their crop for oil palm production.
- The area under oil palm plantation is more than 55,000 hectares spread across Telangana, Andhra Pradesh, Tamil Nadu, Goa, Maharashtra and Mizoram.
- There is a huge demand for palm oil in India and to increase the supply of fruits for palm oil manufacturing, the government has introduced a program to promote its cultivation. Thus, being a largest palm oil processor, Godrej Agrovet is well placed to capitalise on this opportunity.
4. Creamline Dairy Products
- In December 2015, Godrej Agrovet Ltd. made its foray into the dairy business, acquiring a majority stake in Creamline Dairy Products Limited.
- The company sells milk and milk-based products under the brand name “Jersey”. It has a massive presence in the southern states of Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and parts of Maharashtra, with its own dedicated dairy parlours across major cities.
5. POULTRY & pROCESSED fOOD
- Godrej Tyson Food is the joint venture of Godrej Agrovet with Tyson Foods, U.S.A. The company entered in joint venture in 2008 to manufacture and market packaged processed poultry and vegetarian products in India. Godrej Agrovet has increased stake in Godrej Tyson Food to 51% on 27th March 2019. Thus, Godrej Tyson Food has became subsidiary Godrej Agrovet Ltd.
- It offers a wide range of packaged products in the brand name of Good Chicken and Yummiez. The company have manufacturing plants in Mumbai and Bangalore.
- Promoter holding is almost 69% which is a very positive sign for the comapny. It has an association and a strong backing of its promoter the ‘Godrej Group’.
- FIIs = 16%
- DIIs = 5.63%
- Others = 9.42%
FY 2019 Segment-wise Revenue & PBIT
Key Financial Indicators
- The Curren Market Capitalisation stands at Rs 9,656.17 Crore, It is a Mid cap company.
- PE Ratio = 38.31
- ROCE = 23.26%
- ROE = 18.35%
- Debt to Equity Ratio = 0.2
- The numbers that are used are approximate and have been rounded for presentation purposes.
- We are not in any way saying that this is a bad company or that the stock of this company is bad.
- We are also not suggesting anyone to immediately go and buy this stock or invest in the stock markets.
- Only an analysis has been presented here. No judgments or final statements are being made here.