Godrej Agrovet's Outlook: Strong Growth Paths Ahead

Ashwin Thakker

— 2 min read

Key Facts on Outlook & Guidance

  • Sales Outlook (FY26): Company expects top-line growth in "early teens."
  • Profit Outlook (FY26): Anticipates maintaining profit levels.
  • Astec LifeSciences: Targeting EBITDA break-even in FY26, aiming for Rs. 500 crore turnover, with CDMO revenue exceeding Rs. 300 crore and growing over 30% annually. Ten new molecules expected post-FY27.
  • Dairy Segment: Expected EBITDA margins of 6.5-7% for FY26 (including marketing), with a goal of 50% value-added product (VAP) salience within two years.
  • Crop Protection: New product Ashitaka has a theoretical potential of Rs. 200 crore in 3-4 years, with expectations to maintain EBIT margins around 28-30%. Focus on Rabi crops for future growth.
  • Vegetable Oil: Forecasts a 15-18% increase in Fresh Fruit Bunch (FFB) arrivals and an "extremely good year" for Oil Extraction Ratio (OER); new refining units for value-added products set for Q3/Q4 production.
  • Poultry & Processed Food: Strategic reduction of live bird share to 15% of total sales, with 85% from value-added products.

Godrej Agrovet projects "early teens" top-line growth for Fiscal Year 2026, signaling confidence in its diverse agricultural portfolio. Despite sector-specific challenges, the company maintains its profit outlook, driven by strategic segment shifts and new product launches. This earnings call review highlights key initiatives and future expectations across its core businesses, providing a clear roadmap for stakeholders.

Overall Growth and Strategic Initiatives

Godrej Agrovet projects "early teens" top-line growth for Fiscal Year 2026, while affirming its commitment to maintaining profit levels. A key focus is the anticipated turnaround for Astec LifeSciences, aiming for EBITDA break-even and a Rs. 500 crore turnover this fiscal year. Its CDMO business is a significant growth driver, targeting over Rs. 300 crore in revenue and strong annual growth. Additionally, the company is strategically reducing its live bird share in Poultry, focusing on higher-margin value-added products.

Boosting Margins Across Agriculture

In Vegetable Oil, increased Fresh Fruit Bunch arrivals and improved Oil Extraction Ratio are set to enhance profitability, supported by new refining units coming online in Q3 and Q4. The Dairy segment aims to maintain 6.5-7% EBITDA margins for FY26, targeting 50% value-added product salience within two years. For Crop Protection, the new Ashitaka maize herbicide offers significant potential, contributing to an expected EBIT margin of 28-30%. The company plans strategic expansion into Rabi crops to drive future growth and offset market pressures.

Godrej Agrovet's FY26 guidance underscores a clear strategy: focused growth in high-potential segments, enhanced value-added product portfolios, and operational efficiencies. With significant investments in strategic acquisitions and new product pipelines, the company is poised for sustained financial improvement. The outlook reflects a deliberate pivot towards higher-margin opportunities, setting a strong foundation for future performance and shareholder value.

Read more