Buy Godrej Agrovet; target of Rs 940: Motilal Oswal

Motilal Oswal's research report on Godrej Agrovet

Godrej Agrovet (GOAGRO) reported a strong operating performance (EBIT up 54% YoY) in 3QFY25 despite a modest growth in revenue (up 4.5% YoY). This can be attributed to improved profitability in animal feed (AF)/palm oil (EBIT up ~47%/72% YoY), which was partly offset by a decline in operating profitability in the Crop Protection (CP)/Dairy businesses (EBIT down 52%/9% YoY). Poultry and processed food (Tyson) maintained positive EBIT of INR65m compared to an operating loss of
INR73m in 3QFY24.

Outlook

We reiterate our BUY rating on the stock with an SOTP-based TP of INR940.