Godrej Agrovet Ltd. Quarterly Results Q3FY26 stock analysis

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Sector Outlook: Neutral

Sustained Growth Driving Margin Expansion

Godrej Agrovet Ltd. reported a strong revenue growth of 11.0 YoY / up 5.9% QoQ to Rs. 27,183 mn, above market expectations of Rs. 26,400 mn. The company reported annual revenue growth in business segments such as the Vegetable Oil business (+28.5%), Crop Protection (+34.4%), Animal Feed (1.9%), Dairy business (2.7%), and other businesses (+41.47). While, Poultry and Processed Food saw a marginal decline in revenue. EBITDA increased 9.8% YoY / up 5.2% QoQ to Rs. 2,477 mn, while EBITDA margin stood at 8.9% (up 57bps QoQ) in Q3FY26, led by mix of operating leverage, better product mix, and turnaround in loss-making segments. The net profit stood at Rs. 1,097 mn (flat YoY / up 30.1% QoQ) in Q3FY26, above market expectations of Rs. 1,038 mn. The PAT margin was 4.0% versus 3.3% in the previous quarter.

Valuation and Outlook

Key concall Highlights

Animal Feed Business Outlook:

The Animal Feed business continues to demonstrate stable growth momentum, with management highlighting healthy demand trends across livestock and poultry categories that supported the company’s overall revenue growth and profitability during the quarter. The segment benefits from a strong distribution network, integrated agri value chain and operational efficiencies, enabling steady volume-led expansion and margin stability despite input cost fluctuations. Animal Feed is viewed as a cash-generative and scalable platform within the portfolio, and is expected to receive focused capital allocation under the company’s ongoing portfolio optimization framework that prioritizes businesses with strong market attractiveness and growth visibility.

Oil Palm Business Outlook:

The Oil Palm business outlook remains structurally positive, with management guiding for steady-state FFB tonnage growth in the healthy teens range (~12–15% CAGR), driven by strong acreage expansion and improving plantation productivity. The company has significantly accelerated plantation additions, reporting record expansion of ~15,000 hectares during the nine-month period and targeting ~17,000–18,000 hectares by year-end, nearly double last year’s pace.

Domestic Crop Protection:

The Domestic Crop Protection business is witnessing a gradual recovery, supported by improving demand across both enterprise and branded portfolios, although near-term performance may be influenced by seasonality and certain base effects.

Astec LifeSciences:

Astec LifeSciences has demonstrated a clear turnaround trajectory, with the business reporting strong recovery in Q3FY26 marked by ~33% YoY revenue growth and a return to EBITDA positivity, driven by improved execution across both enterprise and CDMO segments. Management expects this momentum to sustain, noting that Q4FY26 is seasonally stronger and guiding for full-year EBITDA breakeven in FY26, signaling stabilization after multiple weak quarters. For the next year, the company is targeting ~15% revenue growth, supported by a robust inquiry pipeline and increasing traction in the CDMO business, which is expected to lead growth.

Dairy Business Outlook:

The Dairy business continues to undergo structural strengthening, with management highlighting that the strategic interventions undertaken over the past 1-2 years particularly around procurement efficiency and margin improvement are beginning to show results despite a challenging milk inflation environment.

Capex Plan:

The company is indicated that capital allocation remains focused on strengthening high-growth and value-added segments, with investments largely directed toward Oil Palm downstream integration, Foods and emerging adjacencies. .