Neutral Godrej Agrovet; target of Rs 480: Motilal Oswal

Motilal Oswal's research report on Godrej Agrovet

GOAGRO reported a healthy operating performance (EBITDA up 34% YoY), driven by improved profitability across businesses. Animal Feed/Crop protection business witnessed improved margins (EBIT up 16%/10% YoY), while Poultry/Dairy business turned profitable (EBIT of INR149m/INR29m vs. operating loss of INR103m/INR118m in 2QFY23). Palm oil business (EBIT up 5% YoY) is still under pressure, with revenue growth offsetting the decline in margins.

Outlook

We largely maintain our EBITDA estimates for FY24/FY25. We retain our Neutral rating on the stock with an SoTP-based TP of INR480.