Thank you. Good afternoon, everyone.

Thanks for making the time and joining us on this Godrej Agrovet Q4 FY26 earnings conference call. From the company, we have with us members of the senior management including Mr.

Nadir Godrej, the Chairman of the company; Mr. Burjis Godrej, the Chairman Designate; Mr.

Sunil Kataria, the Chief Executive Officer and Managing Director; Mr. S.

Varadaraj, the Chief Financial Officer; and Mr. Arijit Mukherjee, the Executive Director and Chief Operating Officer of Astec LifeSciences.

We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive Q&A session. Before we start, I would like to point out that some statements made in today's call may be forward-looking, and a disclaimer to this effect has been included in the earnings presentation that the company has shared with you earlier.

Without further ado, I would now like to invite Mr. Nadir Godrej to make the initial remarks.

Over to you, sir.

Thank you. Good afternoon, everyone.

I welcome you all to the Godrej Agrovet earnings call. I will begin by briefly commenting on our performance for quarter four fiscal year 26 and the full year fiscal year 26.

Godrej Agrovet delivered a strong and consistent performance in quarter four fiscal year 26, concluding the year on a positive note. For the quarter, consolidated revenues grew to ₹2,333 crore, reflecting a 9% year-on-year growth, while profit before tax excluding non-recurring and exceptional items increased by 16.8% to ₹87 crore.

This performance was driven by broad-based volume-led growth, disciplined margin management, and a favorable business mix across key segments. For the full year ended 31st March 2026, the company surpassed an important milestone with consolidated revenues exceeding ₹10,000 crore, reaching ₹10,233 crore, representing a robust year-on-year growth of 9%.

Profit before tax excluding non-recurring and exceptional items increased by 17.2% year-on-year to ₹569 crore, reflecting the improved quality of earnings, margin expansion, and strong execution. In addition to earnings growth, fiscal year 26 also saw a meaningful reduction in working capital, translating into stronger operating cash flows and a tangible improvement in return on capital employed.

Let me now briefly walk you through the performance of our key business segments. Animal nutrition delivered another strong quarter, with quarter four volumes growing 15% year-on-year, significantly ahead of industry growth.

Cattle feed volumes increased sharply by 24%, supported by strong performance of new products launched, favorable commodity positions, and continued cost optimization. Margins expanded meaningfully across the portfolio.

The oil palm business concluded a landmark year in fiscal year 26, marked by highest-ever area expansion, strong volume growth, and all-time-high oil extraction ratio. While quarter four is seasonally weak, margins were largely resilient, aided by improved oil extraction ratios and improved realizations.

The crop care business remained impacted in quarter four fiscal year 26 due to carryforward of inventory in the core marketing channel, leading to lower volumes of in-house products. This was partially offset by improved sales of selected specialty products.

Astec LifeSciences continued its strong turnaround momentum with EBITDA breakeven in fiscal year 26. In quarter four fiscal year 26, both revenue and EBITDA recorded robust year-on-year growth, driven by higher volumes led by the CDMO category, improved realizations, and better capacity utilization.

Enterprise margins improved further compared to quarter four fiscal year 25. I would also like to mention that in line with our focus on harnessing group expertise in chemicals, we have recently augmented the Astec board with Mr.

Vishal Sharma as Non-Executive Chairperson, Mr. Mathew Eyre as Independent Director.

Mr. Arijit Mukherjee, who has been the COO of the business, has joined the board as Executive Director and will be leading the business going forward.

These appointments meaningfully strengthen Astec's leadership and, we believe, will be instrumental in accelerating growth and unlocking its true potential. Creamline Dairy recorded approximately 5% year-on-year growth in revenues excluding bulk sales during quarter four fiscal year 26.

Profitability remained under pressure due to elevated milk procurement costs, though value-added product salience improved to around 40%, up from 38% last year. Godrej Foods Limited continued its strategic shift towards branded offerings.

In quarter four fiscal year 26, EBITDA margins improved significantly, driven by margin expansion in both the live bird and Yummiez categories, supported by improved realizations. Branded revenue salience remained above 80% in fiscal year 26.

Overall, fiscal year 26 was a year of strong performance for Godrej Agrovet, underpinned by disciplined execution, improving business mix, and sustained focus on value-added and branded portfolios. We also made meaningful progress on our sustainability agenda under the Good & Green vision, with leadership positions across climate, water, and renewable energy initiatives.

Thank you.

Let's do that. Yeah.

Good afternoon and thank you so much for taking my questions. I'll limit myself to two or three in the first round.

First, from the standpoint of FY27, the way you are seeing the outlook for your various segments, would it be possible to offer us some sort of outlook or guidance regarding what kind of revenue growth, what kind of profitability it might be fair to expect for the year ahead? Hey,

hi, Abhijit, Sunil here. Abhijit, obviously, broad guidance that we give for FY27 has one overhang of Iran war, which none of us have anticipated.

That's one piece which, I would say, remains a bit of a variable still, I think, open for everybody as how it pans out currently. Given from the strong work that we've been doing in the last 8-9 months, overall at a GAVL level, we'd like to focus on getting early double-digit revenue growth across put together at a consol level along with the way our PBT has improved this year, we'd like to again target let's say a mid strong double-digit mid-teens kind of a PBT growth also for the next year.

That's a broad directional overall growth that we would like to gun for. Between the businesses, I think animal nutrition business has done a very strong showing across.

Also before that, I think the entire revenue growth for us, by and large, we are focused on driving through underlying volume growth. That's another large piece that will play out for us.

We are focused on getting volume-driven revenue growth. In terms of businesses, I think first of all, animal nutrition quickly, the business has been doing pretty well across led by cattle feed and even some other feed businesses.

That's something momentum continues. We would like to again go for a double-digit growth in revenue led by volume in animal nutrition business as we would like to call it now.

Similarly, for our crop care business, the next year is a year which we'd like to go for a recovery. That's what we are calling as a year of recovery for this.

However, at the same time, one piece I want to just point out is that the recovery of the crop care business we'd start seeing it coming back fully from quarter two onward because the last year also there's a co-marketing-based inventory which is sitting in our Q1 base of last year, and that will play out in this Q1 for CCB business, the crop care business. Otherwise, we'll go for very strong recovery in both bottom line and top line, and it'll be again a very high double-digit numbers that will happen in the crop care business.

In CDPL business, the journey continues toward increasing value-added portfolio further. The pressure points will be, I think, on the milk procurement prices, which we expect it to cool down somewhere from quarter two gradually, and then the broad direction is that quarter two onwards, the milk prices should kind of normalize.

The Godrej Foods part, again, in the value-added piece, which is primarily the branded piece, again, the focus is very clearly to drive double-digit growth. The momentum that we already built for ourselves, that is again going to continue.

Live bird continues to keep coming down for us, and that's where we'll keep on investing in both these businesses behind advertising to ensure that there's a strong double-digit volume growth happening. Oil palm, on a very, very strong footing right now.

Again, looking for another year of double-digit volume growth in oil palm, early double-digit, and we have done some exceptional work on oil extraction ratio. We definitely see some more work happening there.

We have done a record area expansion this year. Next year, we're gunning for even beating that record on area expansion.

I think I have covered animal nutrition and Astec. On the Astec business, I think Arijit would come in between on specific questions, but broad direction let me just give you that we have seen a strong comeback led by CDMO.

Our pipeline funnels are looking pretty good. We expect that momentum to continue with a clear focus on CDMO-led growth happening.

We have become EBITDA break-even this year, and we will expect that journey to continue going forward. Overall, all in all, there is a momentum that is there in the business.

We expect the momentum to continue across all parts of our business, and with some businesses which had taken a beating getting into a recovery mode.

No, thank you for that, Sunil. That's really helpful.

Just one or two follow-ups, if I may. One is on the palm oil business.

You mentioned that all of the top-line growth is targeted to be driven by volume expansion, but at the same time, we're seeing fairly strong palm oil prices at this point in time. Is that all over and above this guidance that we're kind of looking at?

What is your outlook for palm oil prices? Do you see them remaining firm here for the foreseeable future, or how do you see the trajectory?

This is where I'll give my a bit point, and then I'll ask NBG should also step in. I think there are certain kind of palm oil modeling that had happened pre-Iran war, where the outlook for the year on palm oil was actually a little bearish this year.

Let me tell you, when I had gone to Malaysia, the conference which really the oil palm conference which happens, which gives a kind of outlook, this was looking like a little bearish year, and then this war happened. Obviously, now, all models have gone a bit haywire on palm oil.

For me to be very honest to say that what is the year-long outlook on palm oil, I think we are right now playing it quarter-to-quarter honestly. It's very, very difficult to give you a very long-term point of view, but I would say we'll take it by the quarter.

Maybe I'll request NBG, if NBG wants to also give any sense of what his take on this is right now. Mr.

Godrej, would you like to

Yes. Yes, I'd also mention that a lot depends on what happens in the Middle East, and palm oil prices are strongly correlated with crude oil prices because of the connection through biodiesel, and therefore, a lot will depend on that.

I would also like to say that if the Middle East war continues, it will probably be bad for the crop protection business, but good for oil palm. For Agrovet overall, the impact either way may not be very great.

Thank you, NBG.

Got it. Thank you so much.

If I may ask one last one before I return in the queue, please. Just on the Astec business, obviously with all this management kind of restructuring that has recently happened, or should I say just changes at the senior management level, would really appreciate some color from the promoters or senior management regarding the way forward for Astec as well as the overall chemicals business of the Godrej Group.

We understand

I will ask Burjis, yeah. Maybe Burjis, I would ask Burjis to give in a few points on this, and then I'll also step in with that.

Burjis, over to you.

Yes. Hi, Abhijit.

This is Burjis speaking. I just want to say that we do believe that Astec has very strong underlying potential, and this is supported by Godrej Industries Group's very deep chemical experience and manufacturing expertise.

We did make some recent management and board changes, which reflect our intent to leverage this expertise more effectively and accelerate value creation and synergies. The board is strengthened with the induction of Mr.

Sharma as Chairman and Mr. Mathew Eyre on the board, whose sectoral experience we believe will materially benefit Astec.

Arijit Mukherjee has been closely involved with Astec's operations as COO for over a decade, will now drive the business forward as an Executive Director. Sunil and I will continue on the board, and this will ensure continuity, and we are very confident that leveraging the group expertise will be the starting point for an accelerated scale-up of this business.

One more thing which I just want to add here on this, Abhijit, is that in terms of structure, it is too premature for us to comment on the same, you know. We are in the process of evaluating what is the most optimal structure and how it will go forward, and I think maybe over a period of next 2-3 quarters, then once we have a bit more clarity in our minds and thought process, we'll come back to all of you on that.

For now, we just want to assure that the interest of all minority share shareholders will be protected, and our endeavor is actually to make sure that we enhance shareholder value for everyone. I think there was a bit more time, I think, as we are more clear, we'll come back to you over the coming 2-3 quarters.

Sure. My apologies, but just a last quick two if I may just squeeze in before I return for more.

On the animal feed side of things, the volume growth seems to have accelerated quite sharply in the last few quarters. What's behind this, and how do you see that going forward?

Also, are margins expected to stabilize, and if so, what are the drivers behind that? That was one piece on the animal feed business.

The other was just with regard to your outlook for CapEx, working capital, and free cash flow for the year ahead. What should we pencil in for each of these items, and what are the proposed uses of any surplus cash that you might generate?

Thank you so much.

I think in the animal nutrition business, I think it's a mix of some very, very strong execution which has been happening and some environmental support. Let me first say the little bit part of the environmental support, I would not say that played the biggest role, is the fact that when milk procurement prices remain so elevated, it does become a kind of a positive trigger for shift from unbranded to branded compound feed business because the farmers see the benefits of the income which they're generating from a higher milk yield.

That obviously is one thing which we have seen in the last 7-8 months, which has impacted our Creamline Dairy business pretty negatively, but that's something which plays positively in this part of the business. Having said that, I think there have been two, three some very fundamental execution levers that we have pressed.

One, first and foremost, I think there has been a strong work across some key geographies that we have focused on. We have done very well in West, which has always been our stronghold, but we have done also very focused work towards east and central India, which have maybe a bit of a traditionally a weaker part of our business, and that we have started seeing some gains in this.

Obviously, this business, it's very difficult to get a Nielsen equivalent share gain report, but our hunch is that we have started making some share gains in these two other geographies that we've started focusing on. That's one thing which has happened.

Secondly, there are some products that we had launched a few quarters back, and some in the last quarter, which I think started giving us some gains, and these products are aimed at more higher-end or what we call as the type one product, which are targeted at higher-yield animals, which again while I won't call it premiumization in that sense right now, but that is the focus in a way would say a little bit more value-added part of the business, which we're trying to push to grow. That is the second piece which is very clearly happened.

I would also want to call out that our R&D has done some very strong work in terms of also reconfiguring certain cost structures in our raw material components here, which also has given us some benefits in the margin expansion. I think put together, these three, four things are something which are played out for us pretty well in the animal nutrition business.

May I add something, Sunil?

Yes, NBG.

Yeah. I would like to add that Sunil has brought a lot of focus on the sales organization and the marketing organization.

We always had very strong R&D, but now we are focusing it more directly on the consumer, and as a result, we have developed these new products, and I think these initiatives will continue, and we have the potential of helping the farmers greatly by making better-quality feed, which gave more production from the animals at a lower cost, and we will drive our R&D knowledge with better marketing to satisfy the farmer and grow the business.

Thank you, NBG. I think Varda also wants to take on the question on that cash flow and working capital.

Abhijit, in terms of animal nutrition, before I move to the cash flow, in terms of the segment margin improvement which we saw, part of the reason for the improvement in segment margin in Q4 is that includes the pet food business income of around ₹9.5 crore. Now we sort of take care of the backend or the manufacturing business of the pet food.

The front-end is taken care by

GCPL

or Godrej Pet Care Food business, and the backend is sort of taken care of by us. That's a line of business for us in a small way, the manufacturing.

In a way, it's a new stream of operations for us. It's actually a kind of a new category expansion work for us at the backend where as this business area is moving forward, we are also going to get a strong income coming out of this business.

Right. Consequently, unfortunately, what has happened is the way we have sort of structured this arrangement, it sort of sits in the other income line, and that is the reason why you don't see it in the normal space.

That's one reason why the segmental results for the animal nutrition business has gone up. In terms of the cash flow, we expect that for the full year of FY27, after taking care of the CapEx requirements of the year, which is close to ₹400 crore, we should be left with around ₹100-125 kind of crore cash surplus, which should be there.

Yeah.

In terms of CapEx, I think our CapEx requirements would be in the coming years. We have We're pretty much First of all, our overall CapEx would be in the range of around ₹350-odd crore.

Roughly around 75% to 80% of that CapEx would be growth CapEx for us. We are pretty clear in my mind we have done a that the entire capital allocation would be towards high-growth businesses, and that is where the entire CapEx is going through.

If I remember correctly and correct me Amitabh roughly, I think, 50-odd percent of our CapEx deployment is going towards oil palm

on the

oil palm business. Yes.

Oil palm, yes.

Correct.

That's right.

Yep. Sorry, just to clarify this pet food business of ₹9.5 crore the income there, this is the profit we're talking about, is it, or the revenue?

This is the profit.

This is our

additional stream of income for us going forward.

Yes. What would the corresponding revenue pertaining to that be?

Revenue doesn't come to us. See, we are manufacturing this product for them.

Right? We are the manufacturer of this product, the revenue doesn't belong to us.

It's a payout on the manufacturing piece that happens to us. It's kind of a contract manufacturing kind of an arrangement.

Abhijit, as you would appreciate, the manufacturing part of the business is taken care of by us, but you'd appreciate that as per our accounting standards, accounting guidelines, we are required to account the entire transaction in a particular manner, and that's the reason why we don't see the revenue stream coming in. Yeah?

Understood. Thank you so much.

There's a good adjacency for us which is developing.

Sure. Thank you so much.

I'll return for any more in the queue.

Thank you for taking my question. Sir, the first question is regarding the impact of monsoons.

There is a prediction by Skymet and IMD that we'd probably see below normal monsoons this year. You did talk about the impact of the war on our business.

Could you just comment on how you see the outlook for the year, while you did give us a brief interplay with the weaker monsoons segment-wise? Thank you.

Arjun, we lost you in between.

Sure, I'll just reframe my question again. We did, in the opening remarks, talk about the impact of the war on our business, and we also given commentary on the outlook for the year.

Given that there is a prediction from IMD and Skymet that the monsoons this year would be below long period average, how do you see that interact with our predictions for the year in terms of volume growth, and which segments do you see positively or negatively impacted due to the same?

Arjun, honestly, we all have a smile on our face when you're asking this question. To be very honest, when we made this whole guidance and this plan, we were still not very sure how the Skymet and IMD's predictions would pan out.

They have obviously become clear to us in the last 30-odd days, especially with IMD giving a prediction which is worse than Skymet right now. Honestly, these numbers don't figure in a real, real El Niño impact, but at the same time, I think it's very difficult for us to right now put in any part of El Niño because three reasons two reasons.

One, all the predictions are saying that June will be pretty normal, and then there'll be a gradual decline with August and September genuinely becoming pretty bad. The severity would, I think, hit August and September if these predictions were to come right.

Now, what this means is that June, July would still fall within the LPA range as the Met Department describes it. I would say this El Niño will have maybe a two halves to it.

That's point one. Second part is there is always in this El Niño one thing which happens is that how does it play out geographically.

Now, our businesses have all different kinds of skews. For example, our crop care production business for us has a pretty decent skew towards south and west.

Now, as of now, if I were to go by this monsoon, it says the only region which is likely to play out normal in the entire El Niño period is south. Now, if that happens, then this El Niño is not exactly El Niño for us in the crop care business, while it may have impact on some other businesses.

The third part very clearly is there's always this probability of a Indian Ocean Dipole or something developing, and then maybe the El Niño effect could get in a month some kind of a moderated. Honestly, there is clearly a El Niño playing out.

Now, how it plays out in geographies, how it plays out in time period is a bit of variable, which is still very difficult to take a hard call on. The way we would see it, we would like to stay course on this guidance as of now and see how we can play it out across once this El Niño becomes clear by the month.

That's where I would say stay right now.

Sure.

Nadir, you want to say something about oil palm and El Niño?

Okay. Yeah.

NBG, why don't you pitch in? You can pitch in, then I'll add on to that.

Yeah.

NBG,

over to you.

Yeah. We feel that there will not be a very bad impact on oil palm this year, even if the monsoon is poor, because oil palm being a tree, it takes a long time to get affected.

There could be some effects next year, but we will do a lot of research to see if there are any solutions to prevent bad effects next year as well.

Yeah. To add on to that, in overall piece on oil palm, we don't expect any impact of El Niño in the oil palm plantation business this year.

There are certain kind of interventions we have planned to see how to counter El Niño in this year so that it also does not impact us too badly next year. Plus, one more thing I want to also add on to oil palm plantation business from a long-term point of view.

See, there is a very interesting thing of what we are internally calling as demographic dividend, which is playing out for us in this business, today roughly around 50% of our trees are in the stage which we call as the juvenile stage, which is 0 to 4, when they are completely unproductive. As we have been doing a lot of plantations now, over a period of time, starting from this year, the next year, and then next year, all these juvenile trees will start becoming younger trees, which become productive.

It's almost like typically what India has seen the benefit, and I love this word, and that's why I've introduced what the team is saying, "Hey, this business is actually going to see a demographic dividend over the next 5 years." While what NBG was mentioning, first of all, this year no impact.

If at some stage, some impact comes in a year after, my reading is that it will be more than made up by our demographic dividend playing out because more and more part of our business will start coming into a productive stage, and that will more than offset any negative impact which may happen at some year or so. I am pretty bullish about that overall with the intervention that we're playing out, the demographic dividend playing out.

Overall, I guess the oil palm plantation business should be pretty strong going forward for us.

Perfect. That's good to know.

Just the last bit on the animal feed piece because historically, a poorer monsoon as we saw in 23, calendar year 23 or August 23, if I look at FY24, that's the highest-ever revenues we have done as a company. If you could just talk about the correlation between our animal feed piece and the monsoons?

Okay. Normally, I think our correlation is pretty well to what happens to the milk yield, I would say.

I think that, I would say, is a larger variable than anything else in this business.

Sure. Fair enough.

Sir, the second query I had was more bookkeeping. If we look at the other equity line in our balance sheet for FY26, it's substantially lower than FY25.

Given that we have had good profits, yes, we've paid out dividends, could you explain the difference of this ₹300-plus crore reduction in other equity?

Just give a second,

huh? Yeah.

Arjun, the reason why that is happening is because in the current year FY25-26, we acquired the remainder stake in our dairy business, that is Creamline

Dairy. Dairy, free share.

The loss is fair, understood. Understood.

Yeah. Okay.

Right.

Arjun.

Sure, thanks. That's it from my side.

Wishing you all the best.

Thanks, Arjun.

Thank you.

Thank you, sir, for an opportunity. Sir, my first question is on the Astec LifeSciences part.

We earlier used to procure the lot of raw material from the China. How much currently we are sourcing from the China in percentage terms for the Astec LifeSciences?

I would ask Arijit to pitch in here. Arijit, over to you.

For last year, around 47% of the total imports have come from China.

Okay. We also progressed some sort of the backward integration, how is it going on?

Backward integration is in two aspects. One, it is done continuously because not only for our own molecules, for other molecules also, we generally go on reviewing what to do with the backward integration.

Always, a backward integration is not only based on the price, right? Backward also has to generate some long-term value creation.

It has to match our assets. It has to match our chemistries also.

As of now, what we have done, for most of our enterprise molecules, we are fully backward integrated in the sense if there is a supply constraint or the prices goes up or supplies are not there, we can immediately start the backward integration process so that the supplies are not affected. Similarly, for major of the CDMOs, we talk with the partners and we are going for a backward integration.

It is a continuous, but it all depends on the value creation, also the cost competitiveness.

Got it. As we all know that the Indian currency is depreciating, given a substantial part that we are importing from the China, how we are managing this input cost and what sort of the margin impact we are seeing from this?

In our sort of businesses, say, currency management or currency volatility is a part of structurally we approach to it, right? You have to remember that we are a net exporter.

Once ever the depreciation happens and the export realization actually offers a natural hedge to the imports. That is one aspect.

Secondly, we manage our imports properly in terms of proper time of, say, importing the lot so that the production there is no too much of inventory build-up. There is also some action is taken in terms of with the currencies also is there, so that say in the short term, we generally take care of the currency volatility.

Being a net exporter, it has almost neutral to neutral impact in terms of the overall business's margin. It does not impact too much in the overall business.

In fact, maybe I would say maybe a little bit that again, this currency volatility is something very difficult to predict. Maybe in the short term, if this remains too high, there could be a mild positive benefit for Astec which happened given that we are a net exporter overall.

Again, these are things which as we know, they're pretty much changing by the month.

Got it. Sir, it will be valuable if you share the outlook on the product mix like enterprise product versus contract manufacturing going forward, if you have any target set in your mind, and also on to the domestic and exports market, what will be the contribution going forward?

Arijit, over to you.

Yeah. In 26, enterprise constitutes almost 48% of the entire revenue and CDMO and the new products constitute around 52%.

I think next 2 years also, ratio-wise it will be the same. A little bit reduction in enterprise will happen only after financial year 28.

In terms of the exports, this year, we clocked around 53% of the total revenue through exports. Next year, if we see the enterprise molecules moving up, we should be somewhere between 60% of the revenue coming from exports.

Okay. Got it.

Sir, in I think 2022 or 2023, we also launched the Samruddhi brand. How is the traction for that brand?

In the coming future or we have any idea to launch any new brand like the Samruddhi brand we launched in 22, 2023, something like that?

Okay. Obviously, Samruddhi brand is one brand which led to a complete disruption in the market of Maharashtra for us in post 23.

As I mentioned in the earlier answer to Abhijit, that there are a couple more products which have started coming in for us in the last year, and one such product which had come in, which is scaling up now pretty well is a brand called Dhanlaxmi. That is one piece which is started happening in markets of Maharashtra and Karnataka.

Again, it is targeted at the milk-yield-giving animals. That is again which is showing us a good traction, and we hope to take that brand further across these three states of Maharashtra, Karnataka, and one more state.

We expect that to become a pretty strong product for us going forward. In southern markets, we have also done a renovation of a product, which is a product which we earlier used to have called Bypro, which we have upgraded to a new, richer product called Bypro Plus.

That again is giving us a pretty decent incremental gains which are happening in parts of south. I think, as NBG also mentioned in the middle, that one clear focus for us going forward in all our businesses and while animal nutrition, obviously, it comes in that, is that and as part of our long-term strategic shift, we are becoming more consumer-centric, we're becoming more market-facing, and R&D, innovation pipeline across all our businesses will become stronger and stronger.

Sure, sir.

Thank you so much for answering all the questions. Best of luck.

Hi. My question in crop protection, what is the

Can you hear me now?

Can you talk on new product launches in the coming year in the key segment and also crop-wise in the crop protection segment?

Your question is specifically to crop protection business?

Yes.

Maybe for the benefit of everybody, I'll say there are two pieces that the changing in terms of nomenclature of businesses internally. One is we are moving our animal feed business to we're naming it now animal nutrition business, and it's not a name change really because we're shifting the mind set itself of the business as part of our strategic direction to a more benefit-led, innovation-led, and market-centric model.

We believe we would like to shift our mindsets to more from a feed to a nutrition, that's one. Similarly, in our crop protection business, we believe that there is a segment of products which we are reasonably strong, which is plant growth regulators, which are about plant nutrition.

Hence, we would like to not only be a thinking ourselves as crop protection business, but also as a total crop care business. That's the second nomenclature change that we're doing.

More than just name change, it's also actually a strategic mindset and a strategic direction value add that we're doing in these names. That's one thing I just wanted to add in the beginning.

Now in the crop care business, there is one very large strategic shift that we had done that as I had mentioned somewhere earlier that we are in the middle of this whole strategy piece is that we have been very much stuck on to what we call as a single point of failure in majority of our businesses. If you see in our crop care business, we were pretty much very, very centric on being a cotton herbicide-led vertical, and then there was obviously another product of our Gracia, which was focused on chilies.

If these two seasons go bad, we see what happened last year for us, which was kind of a perfect storm for us. Now, one thing which is going to shift drastically over the next 5 years is that we are diversifying our portfolio very sharply.

Obviously, products take time to come of this, but we are going to move away from two crop segment product to a multi-crop segment product company. That we'll have more crops coming in our way, we'll have more segments from herbicide to maybe insecticide and fungicide also coming into our play.

This business should, in 5 years, be a very different business from what it's today. In the immediate, what you're going to see a change that in the year of FY27, there are two new products that are coming in, which are completely new products all together into new crop segments.

One is something which got launched in the month of December last year, which is Ashitaka, which is our first maize entry, it's a maize herbicide. That will see a major scale-up this year.

That's one product which is going to be one of our star products. The second is we are entering into a rice plus insecticide segment through a product which is called Takai, which is actually a multi-crop insecticide, although its lead application is paddy.

This will be a second new entry which will happen for us. Between these two products itself, we expect next year's just to give you maybe a directional how we are moving onto this diversification, last year, since this got launched only towards the latter part of the year, this contributed roughly around 3-odd percent of our revenues.

Between these two products itself, if everything goes right in terms of weather, season, etc., don't play truant, we expect these two products itself to contribute roughly around anywhere between 16% to 18% of our business. That's the kind of shift that we'll see roughly around a four times salience shifting for this thing that would happen for us next year.

Thank you so much.

Yeah.

Hi. Team, my question is for Mr.

Godrej. Mr.

Godrej, as a institutional shareholder who's been observing your business for 5-plus years, we appreciate the breadth of strategic changes that have been underway to try and improve the quality of the business across lines. From what you've done in share gains in feed, to improving margin profiles in palm by doing forward and backward, the restructuring in dairy, the buyout of poultry to speed up the changes that you made to clean up the crop protection portfolio, now the sharper focus towards in-licensing.

We appreciate all of those new things that you've been engaging in. If I were to ask you just a next 2-year view, just a 2-year view, sir, what should we as investors be looking to understand?

Should we be looking at a GAVL which is trying to be more strategic sort of from a portfolio restructuring perspective where business units are being clustered together to unlock probably value through that and improve accountability, or is it that, given the composite nature of the business and the CapEx requirements which could feed into multiple, it will continue to be one cohesive unit, but it will be more accelerated, more consistent revenue growth, better profiles, better ROC improvements, the same capital allocation discipline? Which one of this is the path that GAVL is likely to take?

Thank you.

Aejas, Sunil here. Maybe let me take a little bit of shot at this, and then I can ask NBG and Burjis to also pitch in if required on that.

I hear your question loud and clear that what is it that you're seeing in. Thank you for noting down some of the shifts that we are making.

One fundamental piece over the next 2 years what you can expect is that see, any transformation takes 4-5 years to happen fully, and especially in a business like us, which is a multi-segmental business. The shift that you'll start seeing which already started planning on in the next 2 years is that we will move fundamentally from a commodity-centric thinking to a market customer-facing approach, whatever the nature of the entity itself is right now, because that's a fundamental mindset and a capability shift that we're doing.

If I have to read out a few points, I'll put down on the headers for you what you can expect is that our animal nutrition business will move from a feed business to a nutrition mindset business, which is led by innovation, technical services, marketing and sourcing as moats. Our crop care business would move from a product chemistry and patent-focused business to a product innovation, distribution, and branding as moats.

Our oil palm business, as I already talked about, from a volume-led upstream player only to a full-fledged, differentiated upstream, downstream, value-added player which happen. In terms of Astec, from an enterprise business to a very clearly CDMO-focused business.

Everything may not play out in the 2 years because the CDMO funnels take a little longer. That's compound play out will happen over from FY28 onwards, but you will see that shift already started happening.

In Godrej Foods, very clearly, we are dialing down live bird completely. Over the next 3-4 years, it should just remain maybe a backend of ours.

That becomes a protein-forward company which will have many new segments coming in. In fact, I would like to call out what you would see in the next 2 years in terms of starting this year itself is we are making entry into two new segments in the foods business.

One is we've entered into momos, which we believe there's a potential to upgrade the street food business into a branded business. The second one is there is a very piece which I personally think can a very strong ramp-up over the next 3-4 years in India would be our entry into frozen chicken now.

That's another piece which is playing out for us. In CDPL, clearly, the value-added journey goes forward.

We have to make it more and more profitable. I think this is a larger shift, which is, in a way, I've given a headline of our strategy document for you.

It is going to be followed by a cost culture with a mindset shift. Coming back to whether there'll be a restructuring of this businesses, as I said, the models are still taking shape in our mind.

We cannot say at what time it will pan out. We talked about the question to Astec is that maybe in a couple of quarters, we'll come back and to say how does this whole chemical piece plays out for us.

This, in a nutshell, is my take on that. That is a larger transformation at play.

We have already made portfolio choices also, maybe for everybody's benefit I'll say, on what we don't want to do, which also you will see in this next 2 years. For example, the businesses that we're putting up for strategic review right now are our shrimp business, our seeds business, our cattle genetics business.

Our live bird business obviously is coming down. We are going to take some strategic reviews of this business going forward.

This, in a nutshell, is the journey which has started taking shape. You'll see them accelerating over 2 years, and then maybe the structural pieces will, if any, will play out at that stage.

We don't know right now. Anything which Burjis you want to add on at this stage?

Yes. Thank you, Sunil.

Hi, this is Burjis Godrej speaking. I appreciate your question, and I think the deeper subtext, if I'm correct, is possibly hinting at unlocking shareholder value.

I think Sunil has answered the question very well. I'm confident that this approach will lead to good performance and unlocking of shareholder value across GAVL as a whole, but we remain open to suggestions, alternative pathways if you have any for how to improve performance and how to unlock shareholder value.

I welcome your thoughts and suggestions on this topic and you reaching out to us separately to discuss it in more detail. I'll request Mr.

Nadir Godrej if he has any comments.

Yes, this is Nadir Godrej. I would urge you to focus on a longer horizon.

In oil palm, there is likely to be rapid growth because, A, is the demographic dividend that Sunil talked about; B, is the rapid expansion in acreage that we did both in the fiscal year 26, and we are likely to do even better in fiscal year 27. Plus, we are producing more and more value-added products, and we have very good technologies for wealth from waste, which will also gain traction, and all these will get magnified by the rapid growth of acreage.

I see a very bright future for this, and even for animal nutrition, we should look further out than just 2 years. We will have good growth in 2 years, but just imagine what kind of growth we can have over 10 years.

Thank you, NBG. Aejas, one more point which I think you had asked for us there was a comment from your end on the return on capital employed.

I think again if you've seen the last 2-3 quarters, there's an exceptional work which was done through a focus on working capital, and our return on capital employed has also moved along with our results from 16% to now 20%, which is a very sharp jump of 4%, which has never happened in our history of our business. Now as we invest further on growth CapEx, one thing we will be very sure of in the next two two or four or 5 years, in fact, for that sense, that we will be very, very stringent, and we'll keep the discipline very strong on managing working capital and return on capital employed.

We have reached 20%, while I wouldn't hazard a guess right on saying how ambitious we can be on it, but we will definitely not let it slip away. If as we find more and more opportunities, we'll only try to improve it further.

Noted, team. Thank you and all the best.

Thank you for the opportunity, sir. Just a couple of housekeeping questions first.

In terms of the foods business, I think we've obviously mentioned the strategy and the branded salience is going up consistently and maintaining at above 80%. Just as a thought, in terms of the live bird business, is there a thought to sort of exiting the live bird business altogether, or does this still provide supply chain benefits and pricing boosts from time to time depending on the seasonal factors?

Just your thoughts on that. Yeah.

Probal, thanks for the question. One thing is live trading per se is coming down sharply for us, and over this next 4-5 year period, and I think more accelerated manner, we would not be in the business of selling live birds.

That is very clear. That trading, we don't want to do.

That's out of question for us. What may happen for us, and which I think could be a very strong moat as we build a business.

I mentioned that we would like to maybe try to build certain categories like a new emerging category of frozen chicken in India, right? Now what is happening in this business is that there is a potential of doing a category creation all together in this business that one of the reasons why fresh chicken never sold was because there's a shelf life of 4 days.

Now with frozen chicken, the shelf life changes. The work that we have done on product innovation is this chicken is as good as anything on the fresh side.

We have now got a structural tailwind which is happening in this industry in the shape of quick commerce, whereby the cold chain also is getting taken care of. We believe that if we go ahead and build this category forward, then one of the biggest moats actually is a control on the raw material supply of this category, which is where the presence of live bird as a sourcing is a very good, what do you call, differentiator.

Clearly, no play on live bird as a trading stroke sales business. We could have this pure play as a backend supply chain for our future businesses, whether it is Yummiez nuggets which we want to take it forward or whether it is some of the new categories that we're looking forward.

Absolutely.

Understood, sir. A couple of more small questions.

One was what was the amount of FFB that was processed this quarter, and what was the extraction ratio just for this quarter?

The extraction ratio for this quarter if I remember was 20.4%. Let me just check it again.

Just give me a minute. 20.4%, I remember.

It

20.7%, sir. 20.7%.

Sorry, it was 20.77%

was extraction ratio, because this quarter, the overall the number is very small per se. For oil palm business, the FFB becomes very small.

Just to give an example that out of our 637,000 FFB processed annually, this is just

60-odd

thousand tons. This is

a very

small which comes in this. It's a very marginal quarter for OPB business per se.

The good part is we were at an 19.66% last year on OER in the same quarter.

Yes, sir. Apologies, we got cut off in the middle.

I think you were mentioning a number of somewhere around 20% plus extraction,

but

on a smaller base for this quarter.

Yes. The number was, to be precise, the number was 20.7% on a smaller base.

I said the base is so small for us that it just becomes, the base, for example, is 60,000 on a base of 6.3 lakh. This is

a

seasonally a very, very marginal quarter, but the good part is that even on such a small base, where the leverage really doesn't come in also into play in operating leverage, our OER was pretty much stronger over last year's same quarter.

That's

direction sir which tells you that about how the processes and the productivity parameters have got established by the teams. I think that's a very good sign going forward.

One last question, if I may. In terms of dividend policy, the dividend payout obviously has been at fairly healthy levels of around 45% to 47% in the last couple of years.

Any thoughts in terms of how it will proceed given that we're definitely expecting mid-teens profitability and EBITDA growth? Is it fair to assume that, with CapEx remaining at somewhere around let's say ₹300-350-odd crore, that this number has the potential to go up as well from here?

Probal, honestly, this is something which you know very difficult to comment because this is a larger decision which gets taken as the years go results come in. I would say that we have had a very strong policy of giving consistently good dividends.

As you also mentioned, the range of 48-odd percent. I think there's a call which we will take along with promoters every year as the results come back.

One thing is very clear that if obviously results are good, I mean it's always good to, make sure that all the shareholders benefit, but I think a call which will take more as the as the results come in, you know.

Understood, sir. Congrats on a good set of numbers.

I'll go back to the operator.

Thank you. Thank you.

Thank you so much for the follow-up. Just on Astec, would it be possible to get your thoughts for the year ahead in terms of the growth expectations across both CDMO as well as enterprise, and yeah, on the profitability as well, EBITDA side?

Okay. Abhijit, you would like to pitch in here?

Go ahead.

The way the entire industry is behaving is a positive sense, because Q4 also if you have seen the numbers, Q4 the improvement has been both in terms of the volumes as also the price realizations. This is primarily because more or less the prices have bottomed out.

They're bottomed out in the sense that the market prices and the competition from China has more or less stabilized. That is primarily because most of the geographies are showing local demands.

Be it China, be it India, the local demands have improved. International supplies should be normal right now.

Price realization, I think, has stabilized. Raw material supplies, We don't know what would be the long-term impact in terms of Iran war or some other problems coming into, but more or less it is stabilized.

I think we should aim around 15% of growth in terms of the top line, and CDMO should be growing further a little bit higher than the CDMO. Margins are intact, both in CDMO and for enterprises, margins are intact.

That is much I can say as of now. Directionally, it is a positive growth, both for CDMO and for enterprise business.

Abhijit, I may pitch in. I think one thing which is very clearly looking positive for us on the Astec front is that I think the work that the team has been doing on the business development side over the last year, I think there are some good early leads emerging for us in the CDMO space, although they're still to come to fruition.

I think going forward, this is a business where we'll keep the CDMO percentage growing well in the range of around 52% to 53% plus kind of salience. While Abhijit is obviously talking about I think a number of around 15%, but I believe we have a pretty good shot at something in the range of 20% kind of a number going forward on this.

Got it. Thank you.

Just on oil palm, how much of the earnings now come from the value-added side of things, and how do you expect that category to sort of continue to increase its contribution? Just asking from the context that suppose palm oil prices were to correct a year down the line, then how do we cushion the impact on our earnings in that business?

I think that's a fair question. One part first, I'll give you maybe a bit of a context that the last year sharp jump of oil palm profitability that we have seen, if I were to purely discount the pricing part of that, 65% odd part of that profit, 60% to 70%, is come because of our internal efforts.

That I think a good context to have that the pricing play, which was abnormal played out last year, is still not more than 30-odd percent of our this thing. That tells you the structural strength of the work which is happening.

That is one part. Second is, yes, as part of our strategic exercise that we've done, one clear direction is how do we get into more and more differentiated value-added play to further insulate ourselves from any of these pricing volatility or bearishness that may happen.

What is happening is that this year in May itself, we are rolling out our specialty fat refinery also, and which will come into full flow from, I would say, maybe let's say second half of the year in flow for full fashion. That will start giving us a very meaningful play in second half onwards into value-added products, which will then go from strength to strength over a period of next long-range plan of 4 to 5 years.

Our broad direction is that we would like this business to have roughly around 50% to 55% of its portfolio over a period of maybe FY31 in that direction, if I would put, coming out of value-added products. That should give us a very, very significant insulation from any kind of price volatility years which could go down into bearish sense.

I think that's a very clear direction when I said from being a upstream player to a complete value-added upstream, downstream player, that's the aspiration that we are having for ourselves.

Thank you very much. That's very helpful.

All the best.

Thank you.

Thank you. I hope we have been able to answer all your questions.

If you have any further questions or would like to know more about the company, we would be happy to be of assistance. Thank you once again for taking the time to join us on this call.