Q1 Results: Godrej Agrovet’s Profit Falls On Delayed Monsoons, Lower Edible Oil Prices

Shrimp move down a conveyor belt at a facility. (Photographer: Sergio Flores/Bloomberg)

Godrej Agrovet Ltd.'s profit fell in the quarter ended June as delayed monsoons and lower edible oil prices hurt the palm oil segment of India's largest animal feed maker.

Its profit declined 4 percent year-on-year to Rs 78 crore as prices of palm kernel oil and crude palm oil dropped 33 percent and 15 percent, respectively, during the period, Managing Director Balram Singh Yadav told BloombergQuint in an interview.

“Normally in these circumstances the domestic industry is saved by increased duties levied by the government on the imported oil, but that doesn't seem to be happening. Not only us, the entire edible oil industry seems to be suffering,” Yadav said.

Volumes of the animal feed business—which contributes nearly half of the company's overall revenue—rose about 6 percent in Q1. Its revenue rose 14 percent over the last year to Rs 1,703 crore. “Our fish feed and layer feed growth has been very good and these segments keep on changing quarter to quarter because all animal proteins don't have the same demand throughout the year,” Yadav said.

Godrej Agrovet also expects to maintain the growth in revenue for 2019-20, he said. “Margin expansion and crude profitability, however, will depend on commodity prices and how demand catches up in the third and fourth quarters —our main quarters for animal protein business.”

Godrej Agrovet Q1 Results 2019-20: Key Highlights (YoY)