Godrej Agrovet Ltd, an Indian company which operates in the animal feed and agribusiness sectors, reported a notable 27.3% increase in its first-quarter profit on Tuesday. This growth was primarily driven by cost reductions and expansion in its animal feed and crop protection divisions.
During the April-June period, the company’s consolidated net profit surged to 1.05 billion rupees ($12.8 million), compared to 827.1 million rupees from the previous year. The company benefited from the decline in retail food inflation and the recovery of demand in the agriculture sector, which led to lower raw material expenses and enhanced profitability.
Godrej Agrovet managed to decrease its input costs by 5% YoY, and total expenses were reduced by 0.6%. This helped mitigate the impact of stagnant total revenue, which remained at 25.10 billion rupees.
The animal feed business experienced an impressive performance, with profit before interest and tax more than doubling during the quarter. Additionally, the crop protection business saw significant growth, achieving a 78.5% increase in profits. While the animal feed division contributes about half of the total revenue, the crop protection segment is a major profit generator, accounting for roughly 41%.
In contrast, the vegetable oils business saw a decline of 67% in profit for the quarter. This was due to falling selling prices, which more than offset the higher sales volumes, as stated by the Godrej Group-owned firm.
Following the positive financial results, the company’s shares rose by 0.4% on Tuesday. They settled at Rs. 487.50, 0.26% higher than previous close on NSE.