More acquisitions on the agenda for GCPL & Agrovet: Adi Godrej

In the fourth quarter, the company reported 11 percent gain in revenues at Rs 2563 crore (YoY) whereas, EBITDA margins shrank 110 basis points and net profit fell 16.5 percent to Rs 116 crore.Below is the transcript of Adi Godrej’s interview with Priya Sheth on CNBC-TV18.Q: How do you anticipate consumer business going ahead?A: I see very good progress going forward for both Godrej Consumer Products as well as for Godrej Agrovet. The main reason is, now there is a prediction of a very good monsoon this year because the El Nino effect is over and La Nina is going to start.Whenever we have had La Nina, we get very good monsoons and the expectation is there might be three or four good monsoons now onwards.That should be very good to our minds for revival of consumer demand, which has been rather slow especially in rural India and for Godrej Agrovet because all its businesses are very dependent on the quality of the monsoon.Q: In terms of Godrej Agrovet, how do you see FY17 shaping up because it has been challenging over the last two years because of the sub-par monsoon.A: Only the last year was challenging for Godrej Agrovet. The previous year was quite good and FY17, we expect should be very good.Q: In terms of Godrej Properties, the whole real estate market has been quite challenging. How do you see this going ahead and what is in the pipeline for Godrej Properties?A: Whilst the overall real estate market has been challenging, Godrej Properties has had its best ever year and it has had record in both terms of bookings, sales, profits delivery of flats to customers, etc. So, we expect to continue to do well.If the economy turns, if the monsoon is good, consumer demand grows and if the GST is passed, the economy can turn very positively and if it turns very positively, it will be very good for the real estate sector overall.Q: Going ahead in FY17, what are the pressure points that you anticipate in terms of the overall larger macro picture?A: The larger macro picture will depend a lot on whether the monsoon is as good as it is predicted to be and whether the goods and services tax (GST) bill is passed. The GST itself has capability of adding one and a half to two percentage points to our gross domestic product (GDP) growth other things being equal.So if all goes well on these two fronts, it could very well be that India will get into double digit GDP growth for a few years.Q: At a group level, you have outlined a USD 10 billion kind of number by 2020. How much of this growth is going to be led by acquisitions because you have been quite robust with acquisitions over the last year as well.A: We have not mentioned the USD 10 billion number that has come in the media. All we have said is that our plan is to have 10 by 10 growth. That means 10 times in 10 years. But that is in rupee terms. The dollar translation does not necessarily come into play because that depends on the exchange rate.Q: But in terms of acquisitions, what are the focus areas? In which companies are you looking at more acquisitions going ahead?A: The two companies where acquisitions are likely to be significant are Godrej Consumer Products and Godrej Agrovet.In Godrej Consumer Products, our acquisitions are likely to be outside India in the developing world and we have made several acquisitions in the past five years and we have announced two major acquisitions very recently. We expect to continue to make acquisitions.In Godrej Agrovet, we see strong possibility of acquisitions within India. We have made two acquisitions in the near past and we are looking at other possibilities.