GODREJAGRO - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.0

📊 Core Financials

• Revenue & Profit Growth: Quarterly PAT improved from 169 Cr. to 177 Cr. (↑ 4.7%), showing steady growth.
• Margins: ROCE at 24.4% and ROE at 20.9% indicate strong profitability and efficient capital use.
• Debt Ratios: Debt-to-equity at 0.57 is moderate, manageable but higher than peers with lighter leverage.
• Cash Flows: Positive earnings growth and dividend yield suggest healthy cash generation.

💹 Valuation Indicators

• P/E Ratio: 18.9, aligned with industry PE of 18.9, fairly valued.
• P/B Ratio: Current Price / Book Value ≈ 4.0, trading at a premium to book.
• PEG Ratio: 1.59, slightly above 1, indicating valuation is stretched relative to growth.
• Intrinsic Value: Based on EPS (₹30.2) and industry PE, fair value ≈ ₹570–580, close to current price.

🏢 Business Model & Competitive Advantage

• Operates in agri-business and animal feed, backed by Godrej Group’s strong brand and distribution network.
• Diversified portfolio across agri-inputs, dairy, and poultry feed provides resilience.
• Strong ROCE and ROE highlight operational efficiency and competitive positioning.

📈 Entry Zone & Holding Guidance

• Entry Zone: Attractive near ₹560–580, close to 52-week low and intrinsic value.
• Long-Term Holding: Suitable for investors seeking exposure to agri-business with stable returns and dividends.

✅ Positive

• Strong ROCE (24.4%) and ROE (20.9%).
• Dividend yield at 1.91% provides steady income.
• Quarterly profit growth (↑ 34.2% YoY).

⚠️ Limitation

• Debt-to-equity ratio at 0.57 is relatively high compared to low-debt peers.
• Stock trades at a premium to book value (≈ 4.0x).
• Technical indicators (RSI 35.5, MACD -9.95) suggest bearish momentum.

📉 Company Negative News

• Minor decline in FII holdings (-0.06%), showing reduced foreign investor interest.
• Stock under pressure with DMA50 and DMA200 above current price, indicating weakness.

📢 Company Positive News

• DII holdings increased (+0.21%), reflecting domestic institutional confidence.
• Consistent profit growth and strong fundamentals support long-term outlook.

🏭 Industry

• Industry PE at 18.9, in line with company valuation.
• Agri-business sector benefits from rising demand for food security and animal nutrition.
• Sector growth supported by government initiatives in agriculture and rural development.

🔎 Conclusion

• Godrej Agrovet shows strong fundamentals with high profitability and fair valuation.
• Moderate debt levels and bearish technicals warrant cautious entry.
• Entry near ₹560–580 recommended; long-term hold viable for stable growth and dividends.