12 May 2020
4QFY20 Results Update | Sector: Midcaps
Godrej Agrovet
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E Mar
2020 2021E
Sales
68.3
67.0
EBITDA
4.1
4.1
PAT
2.5
2.0
EBITDA (%)
6.0
6.1
EPS (INR)
13.2
10.5
EPS Gr. (%)
5.7 (20.4)
BV/Sh. (INR)
96
100
Ratios
Net D/E
0.3
0.3
RoE (%)
14.6
10.8
RoCE (%)
11.8
8.8
Payout (%)
41.5
62.8
Valuations
P/E (x)
29.1
36.6
EV/EBITDA (x)
20.4
20.6
Div Yield (%)
1.4
1.4
FCF Yield (%)
(0.3)
1.6
CMP: INR386
TP: INR443 (+15%)
COVID-19 dents performance across segments…
…barring Crop Protection and Palm Oil
GOAGRO IN
192
74.2 / 1
598 / 265
0/1/-6
52
Buy
Ex-Tyson Foods (absent in the base quarter) and sale of land, GOAGRO’s
revenue declined 1%. On the other hand, EBITDA increased 9%, aided by
performance in Crop Protection (CP) and Palm Oil, which was offset by
Animal Feed (AF) and Dairy.
Although quarterly performance was above our estimates, we maintain our
estimates for FY21/FY22 due to the current uncertain scenario.
Revenue improved 7% YoY to INR14.9b (v/s est. INR13.4b), largely
attributable to growth in CP, Dairy, and Godrej Tyson Foods (absent in the
base quarter). EBITDA margins contracted 220bp YoY to 3.2% (v/s est. 1.9%).
They were weighed by margin contraction in AF, Dairy, and Godrej Tyson
Foods, whereas they were offset by margin expansion in CP. However,
higher other income restricted PAT decline to 10%. FY20 revenue/PAT grew
15%/6%, while EBITDA declined 10%.
AF
revenue remained flat YoY (at INR8.8b) on 11% decline in volumes, offset
by price hikes; volumes were impacted due to the disruption caused by the
COVID-19 outbreak, especially in the Broiler and Layer Feed segments. EBIT
margins decreased 150bp to 3.8% due to higher RM prices; EBIT/kg declined
19% YoY to INR1.13/kg (+13% QoQ).
Palm Oil
grew 5% YoY (to INR665m), with the EBIT margin expanding 660bp
(to 6.5%), primarily benefitting from high crude palm oil (CPO) prices.
CP
surged 38% YoY (to INR2.5b), with the EBIT margin increasing 110bp (to
19.3%), driven by a robust performance from Astec.
Sales in standalone CP
grew 48% YoY (to INR670m), whereas EBIT declined 34% YoY.
Revenue/EBITDA for
Astec
grew 35%/66% on account of higher realization,
along with volume growth in key products.
Dairy
revenue grew 5% YoY to INR2.8b, with EBIT loss of INR58m v/s profit
of INR38m reported in 4QFY19. Margins were impacted due to an increase
in procurement cost.
Godrej Tyson Foods’
revenue de-grew 5% YoY (to INR1.1b). On the other
hand, it reported EBITDA loss of INR335m v/s profit of INR39m posted in
4QFY19. Performance was adversely impacted by false rumors of COVID-19
being linked to poultry, resulting in a plunge in the volumes and prices of
poultry and poultry products.
In the Palm Oil segment, volumes are not at risk as imports are likely to
decrease if demand starts to increase; however, price decline stands as a key
risk.
CWIP of INR1.5b as of FY20 pertains to: a) INR1.2b injected in the Animal
Feed segment and b) INR220m put toward the Astec herbicide plant, which
would commence operations in 3QFY21. Guided for consolidated capex of
INR2–2.5b for FY21.
AF, Dairy, and Godrej Tyson Foods drag down EBITDA performance
2022E
75.9
5.6
3.2
7.4
16.9
60.1
110
0.2
16.1
12.9
39.2
22.9
14.8
1.4
1.8
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Dec-19 Sep-19 Dec-18
69.1
69.0
68.8
3.7
2.2
2.9
3.4
23.9
3.4
25.4
3.0
25.3
FII Includes depository receipts
Highlights from management commentary
Research Analyst: Sumant Kumar
(Sumant.Kumar@MotilalOswal.com); +91 22 6129 1569
Darshit Shah
(Darshit.Shah@motilaloswal.com); +9122 6129 1546 /
Yusuf Inamdar
(yusuf.inamdar@motilaloswal.com); +91 22 7193 4239
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Godrej Agrovet
Valuation and view
In the near term, COVID-19 is likely to impact GOAGRO’s performance across
segments, barring CP; however, performance is anticipated to improve once
normalcy has returned.
CP has largely aided quarterly performance, and the segment is likely to
continue to perform strongly. This would be supported by product launches in
standalone CP and robust results from Astec owing to its specialty in triazole
chemistry.
In AF, an increase in chicken/milk prices would improve farm profitability,
thereby driving demand for broiler / cattle feed; additionally, the company is
likely to benefit from lower RM prices.
Volume growth is likely to revive owing to the arrival of more FFB and corrective
steps undertaken by the company to prevent the pilferage of FFB to other mills.
Moreover, a new plant with improved technology would ensure higher yields
going forward.
We maintain our estimates and value the stock on an SOTP basis, arriving at a
target price of INR443. Maintain
Buy.
(INR m)
FY20 Var
4QE (%)
13,358 12
-0.6
13,107
251 92
1.9
380
90
143
-76
0
-76
20
-26.5
Consolidated – Quarterly earnings model
Y/E March
1Q
Gross Sales
14,844
YoY Change (%)
8.8
Total Expenditure
13,451
EBITDA
1,393
Margins (%)
9.4
Depreciation
224
Interest
81
Other Income
39
PBT before EO expense
1,126
Extra-Ord expense
0
PBT
Tax
Rate (%)
Minority Interest & Profit/Loss
of Asso. Cos.
Reported PAT
Adj PAT
YoY Change (%)
Margins (%)
1,126
393
34.9
-69
802
802
8.7
5.4
FY19
2Q
3Q
4Q
15,884 14,541 13,909
11.4
19.1
16.4
14,477 13,531 13,160
1,407 1,010
749
8.9
6.9
5.4
237
264
257
85
98
75
338
49
107
1,423
696
524
0
0
-883
1,423
452
31.8
29
942
942
16.7
5.9
696
244
35.0
43
409
409
9.1
2.8
1,407
191
13.6
79
1,137
254
1.4
1.8
1Q
17,026
14.7
15,607
1,419
8.3
351
102
102
1,068
0
1,068
356
33.3
-48
760
760
-5.3
4.5
FY20
2Q
3Q
4Q
18,511 17,827 14,930
16.5
22.6
7.3
17,314 16,821 14,448
1,197 1,006
482
6.5
5.6
3.2
375
371
384
125
108
82
113
93
159
811
621
175
0
0
-681
811
-213
-26.2
-16
1,040
1,040
10.4
5.6
621
168
27.1
-63
516
516
26.1
2.9
856
169
19.7
-58
746
228
-10.2
1.5
FY19
FY20
59,177 68,294
13.7
15.4
54,619 64,189
4,558 4,104
7.7
6.0
982 1,481
339
416
531
468
3,769 2,675
-883
-681
4,652
1,280
27.5
82
3,290
2,407
10.9
4.1
3,357
480
14.3
-185
23
3,062
-119
2,544
-119
5.7 -146.8
3.7
-0.9
NA
It is relevant to note that we have adj. the reported numbers for the sale of land. The transaction led to an increase in sales by
INR1,347m, EBITDA by INR781m, and PAT by INR617m.
12 May 2020
2
 Motilal Oswal Financial Services
Godrej Agrovet
Key performance indicators
Y/E March
1Q
Segment Revenue Gr. (%)
Animal Feed (AF)
Palm Oil
Crop Protection
Dairy
Segment EBIT Margin (%)
Animal Feed
Palm Oil
Crop Protection
Dairy
AF Volumes (000'MT)
AF Realization (INR/kg)
Cost Break-up
RM Cost (% of sales)
Staff Cost (% of sales)
Other Cost (% of sales)
Gross Margins (%)
EBITDA Margins (%)
EBIT Margins (%)
16.2
28.5
-8.1
1.5
4.9
21.3
29.7
0.1
304
24.2
76.1
5.2
9.3
23.9
9.4
7.9
2Q
16.3
-0.2
23.1
2.3
3.2
17.2
25.3
-0.1
304
23.4
77.2
4.4
9.5
22.8
8.9
7.4
FY19
3Q
18.4
33.6
47.9
-1.6
3.1
17.6
17.8
4.0
324
23.6
78.4
5.2
9.4
21.6
6.9
5.1
4Q
29.2
22.5
-3.3
-2.5
5.2
-0.2
18.3
1.4
332
26.6
76.5
5.1
13.1
23.5
5.4
3.5
1Q
20.0
-13.6
11.6
2.4
4.8
8.7
26.8
2.1
324
27.3
76.2
5.2
10.3
23.8
8.3
6.3
2Q
FY20
3Q
32.3
24.2
-5.4
2.7
3.5
19.4
17.5
-0.2
350
28.9
79.5
5.2
9.6
20.5
5.6
3.6
4Q
-0.1
4.9
38.1
5.0
3.8
6.5
19.3
-2.1
294
29.9
77.4
5.2
14.2
22.6
3.2
0.7
FY19
FY20
31.9
-11.2
7.0
2.2
4.6
12.2
19.8
-0.1
332
28.2
78.3
5.1
10.1
21.7
6.5
4.4
20.2
16.0
12.0
0.0
4.2
16.7
23.4
1.3
1,265
24.5
77.1
5.0
10.3
22.9
7.7
6.0
20.1
(0.9)
11.0
3.0
4.1
13.3
21.1
(0.0)
1,301
28.6
77.9
5.2
10.9
22.1
6.0
3.8
12 May 2020
3
 Motilal Oswal Financial Services
Godrej Agrovet
Key Exhibits
Exhibit 1: Consolidated revenue trend
Revenue (INRm)
19.1
11.4
7.3
1,393
1Q
1,407
2Q
FY19
1,010
3Q
749
4Q
1,419
1Q
1,197
2Q
FY20
Source: Company, MOFSL
1,006
3Q
Growth (%)
22.6
14.7
Exhibit 2: Consolidated EBITDA trend
EBITDA (INRm)
9.4
8.9
6.9
5.4
8.3
Margin (%)
16.4
16.5
6.5
5.6
3.2
482
4Q
8.8
14,844 15,884 14,541 13,909 17,026 18,511 17,827 14,930
1Q
2Q
FY19
3Q
4Q
1Q
2Q
FY20
Source: Company, MOFSL
3Q
4Q
Exhibit 3: Consolidated adj. PAT trend
Adj PAT (INRm)
16.7
8.7
9.1
1.4
10.4
Growth (%)
26.1
(5.3)
802
1Q
(10.2)
942
2Q
FY19
409
3Q
254
4Q
760
1Q
1,040
2Q
FY20
516
3Q
228
4Q
Source: Company, MOFSL
Exhibit 4: Animal Feed
Particulars
Volume (MT)
Growth (%)
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
1QFY19
3,04,220
19.0
7,373
16.2
361
4.9
(9.3)
2QFY19
3,04,223
15.9
7,115
16.3
225
3.2
(20.7)
3QFY19
3,24,261
12.5
7,660
18.4
237
3.1
(39.0)
4QFY19
3,31,806
10.4
8,821
29.2
461
5.2
(5.5)
1QFY20
3,24,035
6.5
8,850
20.0
424
4.8
17.2
2QFY20
3,32,301
9.2
9,387
31.9
431
4.6
91.1
3QFY20
3,50,290
8.0
10,130
32.3
350
3.5
47.5
4QFY20
2,94,215
(11.3)
8,811
(0.1)
332
3.8
(27.9)
FY19
FY20
12,64,510 13,00,841
14.2
2.9
30,968
37,177
20.2
20.1
1,285
1,537
4.2
4.1
(17.6)
19.6
Source: Company, MOFSL
Exhibit 5: Consolidated Crop Protection
Particulars
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
1QFY19
2,567
(8.1)
762
29.7
6.8
2QFY19
3,192
23.1
808
25.3
24.7
3QFY19
2,305
47.9
411
17.8
14.6
4QFY19
1,811
(3.3)
331
18.3
(5.7)
1QFY20
2,866
11.6
768
26.8
0.8
2QFY20
3,416
7.0
678
19.8
(16.1)
3QFY20
2,180
(5.4)
381
17.5
(7.5)
4QFY20
FY19
FY20
2,501
9,875
10,964
38.1
12.0
11.0
483
2,312
2,309
19.3
23.4
21.1
46.1
11.6
(0.1)
Source: Company, MOFSL
12 May 2020
4
 Motilal Oswal Financial Services
Godrej Agrovet
Exhibit 6: Standalone Crop Protection
Particulars
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
1QFY19
1,913
(7.7)
702
36.7
13.8
2QFY19
2,048
25.3
592
28.9
15.6
3QFY19
1,082
32.6
218
20.1
(9.2)
4QFY19
452
(23.1)
89
19.7
58.9
1QFY20
2,093
9.4
744
35.5
6.0
2QFY20
2,002
(2.2)
550
27.5
(7.1)
3QFY20
912
(15.7)
185
20.3
(15.1)
4QFY20
FY19
FY20
670
5,495
5,677
48.2
7.5
3.3
59
1,601
1,538
8.8
29.1
125
(33.7)
12.4
(3.9)
Source: Company, MOFSL
Exhibit 7: Astec Life Sciences
Particulars
Revenue (INRm)
Growth (%)
EBITDA (INRm)
Margin (%)
Growth (%)
1QFY19
650
(13.6)
92
14.2
-
2QFY19
1,146
17.4
253
22.1
54.3
3QFY19
1,812
138.4
319
17.6
111.3
4QFY19
1,338
4.2
288
21.5
(12.7)
1QFY20
770
18.5
73
9.5
(20.7)
2QFY20
1,420
23.9
171
12.0
(32.4)
3QFY20
2,250
24.2
436
19.4
36.7
4QFY20
FY19
FY20
1,805
4,946
6,245
34.9
31.1
26.3
479
952
1,159
26.5
19.2
18.6
66.3
29.2
21.7
Source: Company, MOFSL
Exhibit 8: Palm Oil
Particulars
Revenue (INRm)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
1QFY19
1,683
28.5
358
21.3
67.5
2QFY19
2,665
(0.2)
458
17.2
(25.6)
3QFY19
1,812
33.6
319
17.6
26.0
4QFY19
634
22.5
-1
-0.2
NA
1QFY20
1,454
(13.6)
127
8.7
(64.6)
2QFY20
2,366
(11.2)
288
12.2
(37.2)
3QFY20
2,250
24.2
436
19.4
36.7
4QFY20
FY19
FY20
665
6,793
6,735
4.9
16.0
(0.9)
43
1,134
893
6.5
16.7
13.3
(4,009.1)
1.1
(21.2)
Source: Company, MOFSL
Exhibit 9: Dairy
Particulars
Revenue (INRm)
Growth (%)
EBITDA (INRm)
Margin (%)
Growth (%)
EBIT (INRm)
Margin (%)
Growth (%)
1QFY19
3,129
1.5
62
2.0
(12.7)
2
0.1
(83.9)
2QFY19
2,996
2.3
59
2.0
(37.9)
-4
(0.1)
NA
3QFY19
2,780
(1.6)
179
6.4
25.2
113
4.0
25.6
4QFY19
2,674
(2.5)
127
4.7
202.4
38
1.4
NA
1QFY20
3,204
2.4
138
4.3
122.6
66
2.1
3,220.0
2QFY20
3,063
2.2
91
3.0
54.2
-2
(0.1)
(52.6)
3QFY20
2,855
2.7
72
2.5
(59.8)
-7
(0.2)
(106.0)
4QFY20
2,808
5.0
21
0.7
(83.5)
-58
(2.1)
(254.0)
FY19
11,578
0.0
427
3.7
21.7
149
1.3
14.3
FY20
11,930
3.0
322
2.7
(24.6)
0
0.0
(100.2)
Source: Company, MOFSL
12 May 2020
5
 Motilal Oswal Financial Services
Godrej Agrovet
4QFY20 conference call highlights
Animal Feed
In India, broiler production averages at 75–80m per week, which has dropped to
35–40m per week due to the COVID-19 crisis. Similarly, India usually produces
2.2b eggs in a single week v/s 1.4b per week reported currently.
Cost of production of feeds for broiler has dropped to INR77/kg currently, from
INR84–85/kg in March, on RM prices declining due to the rabi maize crop set to
enter the market.
Maize prices in the pre-COVID-19 era stood at INR22–24/kg v/s 12–14/kg
currently. Prices have fallen due to decline in poultry demand and rabi maize set
to enter the market.
Out-of-home consumption accounts for 50% of demand for chicken. Even if 15–
20% of this demand is revived, this would aid a price rise.
Consolidation is unlikely in the Animal Feed segment as barriers to entry are
low.
Aqua (shrimp and fish) prices have been remunerative for farmers. Cattle feed
sales have been impacted due to lower milk prices.
The company has been cutting credit to distributors to avoid bad debts, which
have impacted sales. Collections have taken a hit as these usually happen
toward the end of March.
The CP plant, which has been running at 60–70% utilization, is expected to run
at 100% utilization from 17
th
May; lost production would be recovered by
working on holidays.
In Dec’19, the company launched Hanabi, a Nissan product, which has received
an excellent response.
The company is lagging behind on placement for the kharif season, which should
ideally have happened by this time, as production processes are running slower
than usual.
A drop in labor availability would aid in increasing the consumption of
herbicides.
Astec’s growth during the quarter was led by two main factors. A) An increase in
enterprise sales, on disruption in China’s supply chain, led to growth in order
inflows from Southeast Asia, Russia, the US, and Europe. B) Moreover, Contract
Manufacturing launched two new products, which customers earlier acquired
from Chinese manufacturers.
The prices of certain Astec products are competitive with those of Chinese
products.
Three to four molecules under the registration would be launched in the
Standalone Crop Protection segment over FY21–22.
55–60% of sales are usually conducted in the July–Oct season.
The company has two mills, each with a processing capacity of 1,200MT per day.
It is also refurbishing another mill with a 600MT per day processing capacity.
Currently, the price of CPO is INR58–59kMT; prices have dropped as demand
from bakeries, restaurants, and other institutions has been impacted. Previous-
year prices were a little lower, reaching as high as INR60–68kMT in Mar’20.
6
Crop Protection:
Palm Oil
12 May 2020
 Motilal Oswal Financial Services
Godrej Agrovet
Palm kernel oil finds use in industrial oils, FMCG products, and beauty products,
among others; prices have been impacted due to lower demand from end user
industries
In Palm Oil, volumes are not at risk as imports would decrease if demand starts
to increase; however, price decline stands as a key risk.
In FY20, the company processed FFB of 568k MT, sold CPO of 98.6kMT, and
supplied palm kernel oil of 12kMT.
The company is attempting to lower procurement from agents, which would not
only control the price of milk but also quality.
Over the next couple of quarters, share of revenue from value-added products
would be higher than liquid milk sales.
Milk production in India is 180m MT, 45–50mn MT of which is procured by
organized players; of this, 33% goes to value-added products (VAP) and
institutions.
The Aqua Feed and Crop Protection businesses face credit risk.
The company reported exceptional loss of INR99m in its subsidiary Godrej Tyson
Foods as demand and prices of poultry and related products plummeted toward
the end of fiscal. Accordingly, the company had to recognize inventory loss of
INR30m and loss of INR69m with reference to the fair valuation of biological
assets.
Dairy
Others:
Valuation
In the near term, COVID-19 is likely to impact GOAGRO’s performance across
businesses, barring CP; however, performance is likely to improve once
normalcy has returned.
The underlying theme across businesses remains intact:
Animal Feed:
The segment’s margin was dented due to high RM prices;
however, this has been reversed as the company has taken price hikes.
Palm Oil:
Volume growth is likely to return on the arrival of more FFB and the
corrective steps undertaken by the company to prevent the pilferage of FFB to
other mills. Additionally, a new plant with improved technology would also
ensure higher yields going forward.
Crop Protection:
GOAGRO expects 10 product launches over the next three to
five years, with revenue potential of INR10b in the Standalone business.
Dairy:
The focus is on increasing the sale of VAP, which yields higher margins
(VAP sales in the total dairy sales stood at 29% in FY20 v/s 27% last year).
We maintain our estimates and value the stock on an SOTP basis, arriving at a
target price of INR443. Maintain
Buy.
12 May 2020
7
 Motilal Oswal Financial Services
Godrej Agrovet
Exhibit 10: Valuation
Particulars
Standalone:
Crop Protection
Palm Oil
Animal Feed
Unallocated expenses
Total
Subsidiaries:
Astec (mcap with 20% holdco disc)
Creamline Dairy
Godrej Tyson Foods Limited
JV/ Associate:
ACI Godrej Agrovet Private Limited
Total
CMP
Upside
EBITDA
EV/ EBITDA EV (INR
FY22E (INR
(x)
m)
m)
1,922
1,730
2,341
(1,291)
4,702
15.0
15.0
13.0
10.0
15.5
28,823
25,945
31,141
(12,906)
73,002
Net Debt Equity Value GOAGRO's
(INR m)
(INR m)
share (%)
28,823
25,945
31,141
(12,906)
68,807
9,016
9,197
(808)
13,288
99,500
100%
100%
100%
100%
100%
57%
52%
51%
50%
Value
(INR m)
28,823
25,945
31,141
(12,906)
68,807
5,180
4,774
(412)
6,644
Value/
share
(INR)
150
135
162
(67)
358
27
25
(2)
% Share
4,195
34%
31%
37%
-15%
81%
6%
6%
0%
620
(54)
830
6,099
15.0
15.0
16.0
15.5
9,301
(808)
13,288
94,783
104
35
8%
443
100%
386
15%
Source: MOFSL
Exhibit 11: Change in estimates
Earnings change
(INR m)
Revenue
EBITDA
Adj. PAT
FY21E
65,669
3,979
2,025
Old
FY22E
74,383
5,495
3,201
FY21E
66,956
4,057
2,025
New
FY22E
75,916
5,608
3,242
FY21E
2%
2%
0%
Change
FY22E
2%
2%
1%
Source: MOFSL
12 May 2020
8
 Motilal Oswal Financial Services
Godrej Agrovet
Financials and valuations
Consolidated – Income statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Profit from Associate & MI
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
Consolidated – Balance sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill on Consolidation
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY15
33,118
6.7
30,059
90.8
3,059
9.2
370
2,690
655
137
2,172
364
2,536
605
23.9
-170
2,101
1,736
10.9
5.2
FY16
37,550
13.4
34,585
92.1
2,965
7.9
524
2,441
977
627
2,091
946
3,037
754
24.8
-356
2,639
1,693
-2.5
4.5
FY17
49,264
31.2
44,884
91.1
4,380
8.9
747
3,633
863
590
3,360
200
3,560
1,018
28.6
55
2,487
2,287
35.1
4.6
FY18
52,059
5.7
47,629
91.5
4,430
8.5
859
3,571
453
318
3,436
121
3,557
1,207
33.9
57
2,292
2,172
-5.1
4.2
FY19
59,177
13.7
54,619
92.3
4,558
7.7
982
3,577
339
531
3,769
883
4,652
1,280
27.5
82
3,290
2,407
10.9
4.1
FY20
68,294
15.4
64,189
94.0
4,104
6.0
1,481
2,624
416
468
2,675
681
3,357
481
14.3
-185
3,062
2,544
5.7
3.7
FY21E
66,956
-2.0
62,900
93.9
4,057
6.1
1,602
2,454
495
469
2,428
0
2,428
611
25.2
-208
2,025
2,025
-20.4
3.0
(INR m)
FY22E
75,916
13.4
70,308
92.6
5,608
7.4
1,707
3,901
487
607
4,021
0
4,021
1,012
25.2
-233
3,242
3,242
60.1
4.3
(INR m)
FY22E
1,920
19,185
21,105
3,682
5,685
1,751
32,223
28,783
7,986
20,797
2,649
1,561
1,292
24,728
11,557
9,567
566
3,037
18,803
14,447
3,796
561
5,924
32,223
FY15
926
5,478
6,404
0
6,848
565
13,818
6,417
975
5,443
0
1,380
1,858
8,847
3,888
2,693
175
2,092
3,711
2,141
1,434
136
5,136
13,818
FY16
926
6,906
7,832
2,323
13,757
1,458
25,369
12,139
564
11,575
1,949
638
2,140
14,930
6,665
4,545
420
3,299
5,862
3,349
2,312
202
9,067
25,369
FY17
1,851
8,237
10,088
2,541
6,641
1,663
20,933
14,109
1,329
12,779
1,949
504
1,755
15,157
7,381
5,219
538
2,019
11,212
8,408
2,496
308
3,946
20,933
FY18
1,920
12,193
14,114
2,693
4,098
1,730
22,635
15,185
2,214
12,971
1,949
1,904
1,952
16,749
7,629
6,315
299
2,507
12,890
9,550
2,955
385
3,859
22,635
FY19
1,920
14,570
16,490
4,010
3,950
2,086
26,536
21,246
3,196
18,050
2,649
936
1,165
19,542
9,517
7,349
299
2,378
15,807
12,394
2,934
478
3,736
26,536
FY20
1,920
16,461
18,381
3,825
6,185
1,751
30,142
23,812
4,677
19,136
2,649
1,532
1,292
22,392
9,436
8,539
508
3,910
16,859
12,885
3,467
507
5,533
30,142
FY21E
1,920
17,214
19,134
3,759
6,185
1,751
30,829
26,288
6,279
20,009
2,649
1,556
1,292
22,090
10,340
8,438
634
2,678
16,767
12,925
3,348
495
5,323
30,829
12 May 2020
9
 Motilal Oswal Financial Services
Godrej Agrovet
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
Consolidated – Cash flow statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
9.0
11.0
33.4
3.7
39.3
FY16
8.8
11.5
40.8
2.1
18.8
FY17
11.9
15.8
52.5
4.5
41.9
32.4
24.4
7.3
1.7
18.9
1.2
36.6
30.0
17.5
22.4
5.2
2.4
43
30
24
2.4
4.1
1.0
23.8
13.2
11.3
3.1
1.5
65
44
33
2.5
2.5
1.6
25.5
15.7
12.9
3.5
2.4
55
39
62
1.4
4.2
0.6
FY18
11.3
15.8
73.5
4.5
45.6
34.1
24.5
5.3
1.5
18.2
1.2
5.7
17.9
14.7
12.9
3.4
2.3
53
44
67
1.3
7.9
0.3
FY19
12.5
17.6
85.9
4.5
31.6
30.8
21.9
4.5
1.4
17.9
1.2
9.0
15.7
15.4
12.2
2.8
2.2
59
45
76
1.2
10.6
0.2
FY20
13.2
21.0
95.7
5.5
41.5
29.1
18.4
4.0
1.2
20.4
1.4
-1.2
14.6
11.8
8.8
2.9
2.3
50
46
69
1.3
6.3
0.3
FY21E
10.5
18.9
99.6
5.5
62.8
36.6
20.4
3.9
1.2
20.6
1.4
6.3
10.8
8.8
6.8
2.5
2.2
56
46
70
1.3
5.0
0.3
FY22E
16.9
25.8
109.9
5.5
39.2
22.9
15.0
3.5
1.1
14.8
1.4
7.0
16.1
12.9
10.4
2.6
2.4
56
46
69
1.3
8.0
0.2
(INR m)
FY22E
4,021
1,707
-121
-1,012
-746
3,850
0
3,850
-2,500
1,350
0
764
-1,736
0
-500
-487
-1,272
77
-2,182
-68
634
566
FY15
2,706
370
620
-557
-1,552
1,587
-499
1,088
-1,094
-5
-131
-44
-1,269
0
566
-650
-706
0
-790
-970
1,146
175
FY16
3,364
524
885
-456
-1,024
3,293
-1,610
1,683
-1,223
460
581
-3,581
-4,223
39
4,168
-972
-452
0
2,784
244
175
419
FY17
3,727
747
715
-800
5,145
9,534
-561
8,973
-1,949
7,024
610
366
-974
8
-7,027
-861
0
0
-7,881
119
419
538
FY18
3,717
859
453
-837
-471
3,721
-183
3,538
-2,448
1,091
-131
51
-2,528
2
-2,571
-455
-1,045
2,818
-1,250
-240
538
299
FY19
4,773
982
339
-1,097
633
5,629
-1,152
4,477
-2,759
1,719
0
386
-2,372
0
-680
-354
-1,076
4
-2,105
0
299
299
FY20
3,486
1,481
416
-969
-2,204
2,210
188
2,398
-2,634
-236
0
82
-2,552
0
2,311
-390
-1,076
-481
364
210
299
508
FY21E
2,428
1,602
26
-611
270
3,716
0
3,716
-2,500
1,216
0
611
-1,889
0
0
-495
-1,272
66
-1,701
126
508
634
12 May 2020
10
 Motilal Oswal Financial Services
Godrej Agrovet
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
12 May 2020
11
 Motilal Oswal Financial Services
Godrej Agrovet
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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