Godrej Agrovet Q4 FY25 Earnings Analysis

- Astec CDMO business is expected to see 30-35% growth in FY26 with confirmed orders, though FY25 was flat due to order postponements. - Enterprise business volume growth is cautiously expected at 14-16% in FY26 with a focus on positive contribution margins. - Animal Feed EBIT per ton is expected to remain sustainable at ₹1,800-2,000 in FY26, supported by R&D and cost initiatives. - Dairy segment showed 1.7% revenue growth in first nine months FY25 with an expected improvement in Q4 fueled by the season and price increases. - Palm Oil division had strong performance due to favorable external factors, with potential for continuation but also affected by global factors. - Crop protection segments experience volume fluctuations; focus on cotton herbicide expected to show good numbers. - Direct milk procurement expected to increase from current ~65% to 75-80%, improving cost efficiency and volumes. - Volume growth across animal feed segments is healthy, with expectations of sustained improvements in FY26.

- Animal Feed segment expects sustained EBIT per ton of ₹1,800 to ₹2,000 in FY26, backed by R&D and cost initiatives. Q4 EBIT per ton anticipated over ₹2,100. - Dairy business shows volume recovery; Q4 and FY26 expected to improve with stable milk procurement costs and increased direct farmer procurement (target 75%-80%). - Poultry business is shifting strategically towards branded segments (RGC and Yummiez), reducing live birds share from 41% to 26%, improving profitability. - Palm Oil segment benefitted from favorable government policies and high international prices; however, only 20% price benefit accrues to the company. - Astec LifeSciences CDMO business had a flat growth in FY25 but expects 30%-35% growth in FY26 with confirmed orders, cautious on order postponements. - Overall, cautious but optimistic outlook with focused volume growth, margin expansion, and cost control aiming to drive earnings and profitability improvements through FY26.

- Godrej Agrovet has done ₹161 crores of CAPEX consolidated in the first nine months of FY25. - They expect to end FY25 with about ₹220 crores of CAPEX. - A similar CAPEX plan is in place for FY26. - In pet food, the pilot plant will be ready in a few weeks for R&D and marketing trials. - The full-scale pet food plant (35,000 to 40,000 tons per annum) is expected by end of FY26. - Management is considering internal accruals and plans to reduce working capital; the previously planned ₹1,000 crores debt raise has been postponed and may be reduced to ₹500-600 crores. - They are also thinking about simplifying the company structure to enhance investor visibility and value.

- Godrej Agrovet had an enabling resolution for raising ₹1,000 crores through debt, but the plan has been postponed. - The company is focusing on using internal accruals and aims to reduce working capital significantly in the current quarter. - They may now need only ₹500-600 crores instead of the full ₹1,000 crores initially considered. - No immediate new equity fundraising was mentioned in the provided information. - The management is keeping a close watch on the funding requirements, especially for Astec LifeSciences, but no fresh decisions have been made yet.

- Astec LifeSciences' CDMO business currently has confirmed orders/orders backed by purchase orders (POs). - Visibility for FY26 CDMO growth is around 30% to 35%, with potential to reach 40%, pending one or two customer confirmations. - Management emphasized reliance only on confirmed orders for forecasts due to postponements or cancellations in bad times. - FY25 CDMO growth expected to be flat (no growth) due to market inventory buildup and delays. - The company takes a conservative approach; only orders already secured and confirmed are included in guidance. - New CDMO orders or projects are in the pipeline, with efforts ongoing to expand customer base in Europe and globally.