12 May 2020
4QFY20 Results Update | Sector: Midcaps
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
EPS Gr. (%)
Div Yield (%)
FCF Yield (%)
TP: INR443 (+15%)
COVID-19 dents performance across segments…
…barring Crop Protection and Palm Oil
74.2 / 1
598 / 265
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%.
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).
grew 5% YoY (to INR665m), with the EBIT margin expanding 660bp
(to 6.5%), primarily benefitting from high crude palm oil (CPO) prices.
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.
grew 35%/66% on account of higher realization,
along with volume growth in key products.
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
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
Shareholding pattern (%)
Dec-19 Sep-19 Dec-18
FII Includes depository receipts
Highlights from management commentary
Research Analyst: Sumant Kumar
(Sumant.Kumar@MotilalOswal.com); +91 22 6129 1569
(Darshit.Shah@motilaloswal.com); +9122 6129 1546 /
(email@example.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.