(Reuters) -India’s Godrej Agrovet reported a fall in second-quarter profit on Wednesday, pressured by underperformance in its crop protection business and mounting input costs.
Heavy and persistent rainfall, 115% above normal in September, led to farmers missing several rounds of sprays across different segments of herbicides, insecticides and fungicides and sharply reduced domestic farm input consumption, analysts said in a note.
Godrej Agrovet’s revenue from its crop protection business, which includes fertilizer and pesticides, fell 28.3% in the quarter. Meanwhile, its dairy business slipped 2.35% compared with a 3.22% rise a year ago.
The firm’s animal feed unit, which includes cattle and fish feed and is the company’s largest revenue contributor, rose marginally by 0.97%.
Tailwinds such as strong rainfall, GST cuts on agri inputs, and rising branded product penetration are expected to support agrochemical and dairy growth over the next 12–18 months, according to analysts.
Raw material costs, which form the bulk of expenses across Godrej Agrovet’s animal feed, dairy and crop protection businesses, rose 6.5%.
Analysts said that animal feed volumes are expected to grow slowly, while margins could stay tight due to rising costs of basic vitamin additives used in feed.
The agri-business arm of the Godrej Group posted a profit of 925.9 million rupees ($10.53 million) for the three months ended September 30, compared with 1.12 billion rupees a year earlier.
The company’s overall revenue from operations grew 4.8% to 25.67 billion rupees.
($1 = 87.8950 Indian rupees)
(Reporting by Yagnoseni Das in Bengaluru; Editing by Nivedita Bhattacharjee and Vijay Kishore)
