Godrej Agrovet margin slips as costs outpace revenue growth
Consolidated net profit fell 19.92% sequentially, while other income made up 23.98% of pre-tax profit.
Filed 06 Nov 2026, 11:21 IST · Godrej Agrovet Ltd (GODREJAGRO)
Key takeaways
- Consolidated operating margin fell 1.74 percentage points to 6.67% as expenses grew 6.89% sequentially, faster than revenue at 4.89%.
- Net profit declined 19.92% sequentially to Rs 102.75 cr, with other income contributing 23.98% of pre-tax profit and a 0.89-point lower tax rate providing some offset.
- Godrej Agrovet’s 6.67% operating margin was 4.02 percentage points below the 10.69% median for 64 reported FMCG peers.
Price around the results
Q2 revenue growth did not convert into operating profit
Godrej Agrovet’s consolidated revenue increased 4.89% sequentially to Rs 2,994.98 cr, but operating profit fell 16.84% to Rs 199.73 cr. Expenses rose 6.89%, outpacing revenue growth and pulling operating margin down from 8.41% to 6.67%. The company’s margin was 4.02 percentage points below the 10.69% median of 64 FMCG peers that had reported the quarter.
Lower tax softened the profit decline, but earnings quality was mixed
Pre-tax profit fell 20.92% sequentially as operating profit weakened and interest expense increased 11.11%. The tax rate declined 0.89 percentage points to 28.27%, limiting the impact on net profit, which still fell 19.92%. Other income accounted for 23.98% of pre-tax profit, making it a material contributor to reported earnings.
Management flags pressure in Crop Care and Creamline
Management said Crop Care’s H2 outlook remains muted because of continued volatility and El Niño effects, while it also cited weaker agchem demand from poor rainfall, high channel inventories and cautious procurement. The company said Creamline expects elevated milk prices in Q3 to weigh on margins. Management also said the Khammam oil palm mill was commissioned in July 2026 and that plantation acreage rose by approximately 13,000 hectares in H1 FY27.
The stock rose 1.61% despite the earnings contraction
The shares rose 1.61% on the results date, after opening down 0.14%, while trading volume reached 4.02 times the reference level. The stock’s move was 0.41 percentage points below the market on the day. There is no supplied history of post-results moves against which to judge whether this reaction was typical.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹2,995 cr | ₹2,855 cr | +4.89% |
| Other income | ₹34 cr | ₹27 cr | +25.36% |
| Expenses | ₹2,795 cr | ₹2,615 cr | +6.89% |
| Operating profit | ₹200 cr | ₹240 cr | -16.84% |
| Operating margin (%) | 6.67% | 8.41% | — |
| Interest | ₹33 cr | ₹30 cr | +11.11% |
| Depreciation | ₹58 cr | ₹57 cr | +1.91% |
| Profit before tax | ₹143 cr | ₹181 cr | -20.92% |
| Tax | ₹40 cr | ₹53 cr | -23.34% |
| Net profit | ₹103 cr | ₹128 cr | -19.92% |
| EPS (₹) | ₹5.99 | ₹6.99 | -14.31% |
Operating margin of 6.67% compares with a Fast Moving Consumer Goods sector median of 10.69% across 64 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.61% | -0.41% |
Volume on the results session was 4.02× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Oil Palm FFB volumes increased by approximately 14% in Q2 FY27.
- Godrej Foods' B2C business grew approximately 50% year over year in Q2 FY27.
Guidance & outlook
- Crop Care expects a muted H2 outlook because volatility and El Niño impacts are continuing.
- Creamline expects elevated milk prices in Q3, which will weigh on margins.
Expansion
- The Khammam oil palm mill for CPO was commissioned in July 2026.
- Plantation acreage increased by approximately 13,000 hectares in H1 FY27.
New products
- Crop Care launched Ashitaka as a new corn herbicide.
New initiatives
- Astec identified four AI opportunities, with two already under development.
- Creamline commenced a go-to-market revamp pilot.
- Astec is focusing on new products, capacity utilization and cost optimization.
- ACI-GAVL put a new sales development capability in place and expanded channels.
Problems & risks
- Astec demand weakened because of El Niño, poor rainfall, high channel inventories and cautious procurement.
What to watch
- Whether consolidated operating margin holds above 6.67% after falling from 8.41% sequentially.
- The effect of the elevated milk prices that management said could weigh on Creamline’s Q3 margins.
- Whether Crop Care performance improves from the muted H2 outlook management attributed to volatility and El Niño effects.