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Operating performance below estimates

* Godrej Agrovet’s 3QFY25 consolidated revenue grew 4.5% YoY to INR24.4b (est.INR26b). EBITDA margin expanded 220bp YoY to 9% (est. 9.8%), led by a 200bp YoY expansion in gross margin to 25.6%. EBITDA stood at INR2.2b, up 38% YoY (est.INR2.5b). Adj. PAT grew 21% YoY to INR1.1b*.

* Note: *Due to the withdrawal of the indexation benefit on LTCG, the company reversed the deferred tax assets created on certain capital assets (carried at indexed cost), resulting in a one-time non-cash impact of INR98.2m on Adj. PAT for 3QFY25. Without this, Adj. PAT grew 32% to INR1.2b in 2QFY25.

Segmental performance

* Animal Feed (AF) business revenue declined ~1% YoY to INR12.7b. EBIT margin expanded 200bp YoY to 6%. EBIT stood at INR1.1b, up 47% YoY.

* Palm oil business revenue grew ~38% YoY to INR4.8b. EBIT margin expanded 470bps YoY to 23.7%. EBIT stood at INR1.1b, up 72% YoY.

* Crop Protection (CP) business revenue declined ~13% YoY to ~INR2b. EBIT margins contracted 500bp YoY to 6.2%. EBIT stood at INR119m, down 52% YoY.

* Dairy business revenue marginally grew ~1% YoY to INR3.7b. EBIT margins contracted 29bp YoY to 2.5%. EBIT stood at INR93m, down 9% YoY.

* Poultry and processed food business revenue declined ~3% YoY to INR2.1b. EBIT margin stood at 3%. EBIT stood at INR65m vs an operating loss of INR73m in 3QFY24.

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