Shares of Godrej Agrovet Ltd. dropped sharply by as much as 8% on Friday, May 2, reacting to its March quarter (Q4 FY25) earnings report, making it the top loser on the Nifty 500 index for the day. The drop brought its current share price to ₹712.1, significantly down from its 52-week high of ₹877, hit in July 2024 — a fall of over 20%.

The latest quarterly update disappointed investors as the company failed to show any growth in revenue, EBITDA or operating margins compared to the same quarter last year. Despite 24% profit growth on a YoY basis, the market reacted negatively to the mixed performance across business verticals.

Muted Financial Performance Despite Select Business Strength

In its March quarter update, Godrej Agrovet reported that revenue, EBITDA, and EBITDA margins remained flat compared to the March quarter of the previous year. However, net profit rose by 24%, driven largely by improved outcomes in:

• Domestic crop protection business

• Vegetable oil segment

• Margin expansion in the animal feed business

These areas contributed positively to the company’s bottom line, but the overall performance was overshadowed by weakness in other segments.

Astec Lifesciences Dragged Overall Group Performance

One of the most significant negative contributors in the quarter was its subsidiary, Astec Lifesciences. The company described FY25 as another difficult year for Astec due to:

• Demand-supply imbalances

• Volume headwinds

• Price corrections across both enterprise and contract manufacturing verticals

This prolonged struggle has eroded the impact of other positive segments and continues to be a major concern for the group’s investors.

Flat Animal Feed Margins; Pressure in Dairy and Foods Segments

While the animal feed segment showed margin expansion for the full year, the quarter in review saw flat margins. In contrast, the dairy business experienced a dip in margins due to a rise in procurement prices, limiting profitability.

The Godrej Foods segment also suffered. The company reported a decline in profitability for this business unit, attributing the underperformance to:

• Subdued live bird prices compared to the previous year

• Lower volumes in the live bird category, resulting in a drop in segment revenue

These two segments—dairy and Godrej Foods—acted as key drags on the overall quarterly performance.

Market Reaction and Stock Performance So Far in 2025

As of Friday afternoon, Godrej Agrovet shares were trading 7.7% lower at ₹712.1. With this drop, the stock has:

• Erased all gains in calendar year 2025

• Now stands 4.1% lower for the year so far

• Marked a 20% decline from its July 2024 peak of ₹877

This performance reflects investor frustration with the company’s inability to show consistent growth across segments, despite isolated success in some verticals.

What’s Working and What’s Not for Godrej Agrovet

Segments Performing Well:

• Crop Protection: Domestic crop protection has been a bright spot, showing resilience and contributing to profitability growth.

• Vegetable Oil: This segment has offered steady revenue and margin performance.

• Animal Feed (FY basis): Over the full year, margin improvements were noted even though Q4 was flat.

Struggling Segments:

• Astec Lifesciences: Continues to face demand challenges, low volumes, and pricing issues.

• Dairy Business: Increased procurement costs hurt margins.

• Godrej Foods: Live bird category underperformed due to both price and volume pressures.

Investor Sentiment and Outlook

Investor sentiment has taken a hit due to the broad-based weakness in key businesses, and the stock correction reflects rising concerns about the company’s ability to deliver consistent earnings growth. The lack of revenue and margin expansion in Q4, despite profitability support from select verticals, raises questions on:

• Whether the company can stabilize underperforming segments, especially Astec Lifesciences

• If profitability can be sustained without broader top-line growth

• Whether Godrej Agrovet will see a re-rating only after fundamental recovery across all segments

Conclusion: Mixed Outlook Amid Strong Pockets and Operational Challenges

While Godrej Agrovet continues to hold strategic importance in India’s agri-business ecosystem, its Q4 results highlight that strong performance in a few verticals is not enough to support stock valuations. Astec’s continued struggle, margin pressure in dairy, and weak demand in live bird products are red flags.

Unless the company manages to revive performance in these lagging segments, the stock may continue to face selling pressure in the near term. Investors may need to watch for signs of:

• Volume recovery in Astec

• Stabilizing procurement prices in the dairy business

• Improvement in demand trends in the live bird and processed food category

Until then, Godrej Agrovet remains under pressure, both in terms of business operations and market sentiment.

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