Fastest-Growing Emerging Companies Rank: 3
Group: SUBSIDIARIES/ JVs
Segment: REVENUE Rs 3,000-6,000 crore
Balram Yadav, Managing Director at Godrej Agrovet Ltd (GAVL), is eagerly waiting for the monsoon to hit Haryana and Punjab. "Our business is cyclical in nature and the monsoon has a huge bearing on our business and profitability," he says, enjoying the glimpse of rain from his fifth-floor office at Godrej One, the new headquarters of Godrej Group at Vikhroli in Mumbai. Good rainfall will help the agribusiness firm by pushing volumes higher. "Rise in commodity prices may increase value but it doesn't mean anything without volumes," he adds.
The unpredictability of the monsoon notwithstanding, GAVL has grown at a steady pace over the past few years. This is thanks to a business restructuring. "The big focus was to de-risk the business, which meant we had to be very efficient. We cut excess flab and tied up with the right partners to grow in areas where we didn't have core strength. Most importantly, we invested heavily in R&D, particularly in animal feed and palm oil businesses," says Yadav.
GAVL now has 34 facilities compared with 56 four years ago while its capacity has increased to 1.8 million tonne from one million tonne. Last year itself, the company raised the capacity by 3.5 lakh tonne. It has invested close to Rs 550 crore for expansion over the past four years, with most of the money going into animal feed plants and palm oil mills. "The big driver for the animal feed business in the future will be our R&D initiatives. We have been investing 10 per cent of our profits in R&D in this business," says Yadav.
GAVL earns revenues from five businesses - animal feed, oil palm mills, agricultural inputs such as seeds and pesticides, the JV with ACI, and the JV with Tyson Foods. It is the largest seller of animal feed commercially in India and sold close to 1.1 million tonne last year. The animal feed business accounts for two-thirds of the companys revenues and half its profit. For 2014/15, GAVL reported a 29 per cent jump in consolidated net profit to Rs 214 crore on a six per cent rise in revenues to Rs 3,795 crore.
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