This small cap company operating in the consumer food sector is going to set up an integrated palm oil complex in Telangana with over 300 Cr investment over the next 3-4 years.
At 11:40 a.m the shares of Godrej Agrovet Limited (GAVL) were trading at Rs. 487 up by 1.5 percent from its previous day close and the market capitalization of the company is 9,306 Cr.
As per the company’s filing, Godrej Agrovet is going to set up an integrated palm oil complex in Khammam District in the state of Telangana, with over 300 Cr investment over the next 3-4 years. It will consist of a state of the art Crude Palm Oil mill along with the provision of setting up a refinery in the near future, The company will also establish a nursery with a capacity of up to 7 Lac saplings per year in addition to the seed production & research unit.
“Telangana’s ambitious oil palm mission aims to bring 20 lakh acres under cultivation across the state. The mission will improve income for more than 5 lakh farm households while at the same time contributing to the nation’s deficit for edible oils. We are delighted to partner with a strong and reliable partner like Godrej Agrovet in this endeavour. Their expertise in the oil palm sector will definitely help us achieve our goals of unleashing a yellow revolution.” , said Shri K. T. Rama Rao, The Hon’ble Minister for Municipal Administration & Urban Development, Industries & Commerce, and Information Technology of Telangana.
At the complex, GAVL will be setting up the first-ever seed garden in India. This seed garden can provide seeds for the planting of ~90,000 acres of area and shall help Telangana state to achieve targets for oil palm plantation, With over 65,000 hectares of palm oil under cultivation across the country, GAVL plans to increase cultivation to 1.2 Lac hectares by 2027.
Additionally, through its Samadhan Centers – a one stop solution for oil palm farmers, the company would also provide advisory services on best practices / modern technologies, farm inputs (such as fertilisers, drip irrigation, pesticides, seeds, and harvesting tools) and services under one roof.
Earlier on September 28, 2023 Godrej Agrovet had entered into a strategic partnership agreement with Sime Darby Plantation Berhad(SDP). The scope of the agreement was SDP will supply high-quality oil palm seeds to Godrej Agrovet Limited’s Oil Palm Business Unit(s) and later set up a state-of-the-art seed production unit in India.
The company’s revenue has increased by 12.85 percent from 8,306.9 Cr in FY22 to 9,373.68 Cr in FY23, accompanied by decreasing profits from 419.15 Cr to 301.91 Cr.
The company reported a return on equity (ROE) of 12.86 percent and return capital employed of 12.73 percent. The company’s profitability ratios have decreased in relation to its previous year due to the increase in operating expenses.
According to the latest shareholding data available for the June 2023 quarter, the company’s Promoters hold 74.05 percent stake, the Domestic Institutional Investors hold 13.19 percent and the Foreign Institutional Investors (FII) hold 1.55 percent.
Godrej Agrovet is a food and agri conglomerate that operates in the animal feed and agribusiness sectors, it is dedicated to improving the productivity of Indian farmers by innovating products and services that sustainably increase crop and livestock yields.
Written by: Bharath K.S
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