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Tuesday, July 05, 2022

Consumption improvement to fuel growth story for GAVL, says MD

Balaram Singh Yadav, who was speaking to The Indian Express about the Q4 results of the company, said consumption is set to cross the pre-pandemic levels with offices reopening and weddings and other ceremonies becoming more and more common.

By: Express News Service | Pune |
May 16, 2022 3:37:06 pm
The company said that profitability was impacted due to the increase in prices of raw materials.

Week by week improvement in consumption of both dairy and animal protein would have a positive effect on Godrej Agrovet Limited (GAVL)’s animal feed business, said the company’s managing director.

Balaram Singh Yadav, who was speaking to The Indian Express about the Q4 results of the company, said consumption is set to cross the pre-pandemic levels with offices reopening and weddings and other ceremonies becoming more and more common.

GAVL’s financial results, which were announced earlier last week, saw the animal feed segment reporting a 19.5 per cent increase in volume and a 38.2 per cent increase in revenue. The company said that profitability was impacted due to the increase in prices of raw materials.

Yadav pointed out that the decision of the central government to allow for the import of the remaining 5.5 lakh tonnes of the 12 lakh tonnes of Genetically Modified Soyameal will keep the prices of the protein component of the feed industry under check. The corn crop in Bihar, Yadav said, is also going to keep prices of the carbohydrate component under control. “Commodity inflation is a little bit good.. as it leads to crop diversification,” he said.

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GAVL’s vegetable oil division saw segment revenue growing by 2.6 times and prices of crude palm oil and palm kernel increased by 20 per cent and 34 per cent respectively. Ruling out a drastic reduction in edible oil prices, Yadav said he expects the present ban on exports by Indonesia of all palm oil and commodities to be lifted in the next week or two. “My sense is that the current inflation, which is at the peak, will come down,” he said.

Indonesia is the largest producer of palm oil-producing around 48 million tonnes of the oil.

However, prices will not reach the FY 2019 and 2020 levels but will go to last year’s levels. The company, he said, will continue to invest in crushing facilities as and when required. GAVL has capacity in Andhra Pradesh, Tamil Nadu, and Telangana and as per business plans increases crushing capacity every three years.

The crop protection business had seen degrowth of 6.3 per cent for the fiscal of 2021-22. This was due to what Yadav said was a housekeeping step carried out in the business which had led to the recalling of around Rs 150 crore worth of products.

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