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Godrej Industries (GIL) held a conference call to discuss the quarter ended June 2016 result.
Highlights
The consolidated net sales for June 2016 quarter increased by 36% to Rs 2053.89 crore. OPM has declined marginally to 8.1%. The operating profit inclined by 35% to Rs 167.33 crore. The net profit has increased by just 2% to Rs 63.76 crore due to increase in effective tax rate.
Godrej Consumer Products
The consolidated net sales for the quarter ended June 2016 have increased by 7% at Rs 2122.77 crore. India business sales was flat at Rs 1063.97 crore, impacted by a stretched summer and the late onset of monsoon, resulting in a weak performance in Household Insecticides. International business sales grew by 2% to Rs 971 crore. OPM increased by 202 bps to 17.9%. The profit before tax and EO was up by 18% to Rs 329.76 crore. The net profit has increased by 109% to Rs 244.27 crore due to fall in EO expense and tax rate
Chemical Division
The revenues declined by 9% to Rs 279.97 crore for Q1 FY17. Exports stood at Rs 70 crore. PBIT margin decreased by 460 bps to 5.8%. PBIT stood at Rs 16.19 crore, down by 49%.
The performance of the chemicals business was impacted due to the planned shut-down for maintenance at Valia (Gujarat) factory
Incurred maintenance expenses of Rs 4 crore. Revenue loss due to shut down was Rs 14 crore.
Godrej Properties Limited (GPL)
Sales of this business increased by 44% to Rs 336.51 crore in Q1 FY17. PBIT margin has declined by 1570 bps to 18.9%. The PBIT decreased by 21% to 63.70 crore.
GPL delivered 1.94 million sq.ft. in Q1FY17 which includes 1.28 million sq.ft of commercial and 0.66 million sq.ft of residential space across three cities.
Godrej BKC received the occupation certificate in Q1 FY17
Started Construction at The Trees, Residential Phases 1&2 in Q1FY17
Two new projects with 13 million sq.ft. of saleable area added in Q1FY17
Commercial sales stood at ~43,000 sq.ft with a booking value of Rs 75 crore
Godrej Agrovet Limited (GAVL)
Sales was inclined 50% to Rs 1342 crore for Q1 FY17 through a healthy mix of organic and acquisitive growth. PBIT inclined by 29% to Rs 88 crore
There was strong pickup in monsoon after slow start.
Q1 saw strong commodity prices in CPO, PKO and live birds.
Integration of both the acquisitions - Creamline Dairy Products Ltd and Astec Lifesciences is progressive well
Animal Feed
Revenue has increased by 10% to Rs 699 crore. Steady performance by the animal feed bsueinss in a challenging environment as significant appreciation in maize (critical raw material) impacted demand for animal feed. GAVL working on multiple R&D initiatives which can significantly improve the business performance in the future.
ACI Godrej (Bangladesh)
Sales increased by 15% to Rs 156 crore. Significant volume growth in Cattle Feed at 58% and Fish Feed at 15%.
Oil Palm Plantation
Sales increased by 63% to Rs 119 crore driven by higher CPO /PKO prices
Price of FFB in Q1 was remunerative for the farmers and shall help in bringing sizeable area under Oil Palm this year
Agri Inputs Business
Sales increased by 20% to Rs 175 crore driven by PGP, Pesticides and Hitweed
The business will focus on building synergies this year with Astec integration
Godrej Tyson
Sales grew by 18% to Rs 130 crore.
Live bird business performance supported by additional volume from RGC business & high broiler prices
RGC witnessed growth in distribution and counter share and improvement in overall productivity
Work started for value added vegetarian line in Punjab, likely to be commissioned by April'17.
Astec Lifesciences
Sales inclined by 8% to Rs 64 crore.
New plant commissioned successful in the month of June.
Creamline Dairy Products
Sales grew by 11% to Rs 251.33 crore in Q1 FY17. PBIT margin stood at 6.6%. PBIT stood at Rs 16.49 crore.
Value added products constitute nearly 28% of the revenue. The company will continue to focus on brand building and improving the mix of value added products in overall sales
NATURE'S BASKET
The revenue grew by 32% to Rs 75 crore. Gross margin was 25.5%.
Online sales grew by 525% to Rs 5.5 crore.
Hubs for online sales, intergraded with stores.
Other Highlights
GAVL – capable of giving double digit growth rate for next 2 years and acquisition will give further boost. Profit margin improved with salient of high margin business.
Capacity utilization in animal feed business in India was 60%, Bangladesh was 80% in last quarter & now 55%. Expects fast growth from Bangladesh in next 2- 3 years.
Margin in animal seed business got down due to increase in raw material cost which is passed to customer. By end of year, will get back on margin.
Vegetable oil business saw improvement in margin due to improvement in margin in trading business.
Vegetable oil business – the company have 63k hectares of which 36k hectares are producing. Last year was not very good because of drought and certain issue of govt. policy. This year expects 6-7k hectares under palm oil. Palm oil prices are quite god now.
Rs 300-350 crore capex in consolidate business for next 2 years.
Tax rate –will be at MAT
GAVL is increasing synergies with Astec and Creamline, through joint R&D initiatives which could result in more products for GAVL than before, energy savings and availability of concentrated chemicals.
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