GODREJAGRO - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.9
| Stock Code | GODREJAGRO | Market Cap | 10,761 Cr. | Current Price | 560 ₹ | High / Low | 876 ₹ |
| Stock P/E | 19.7 | Book Value | 141 ₹ | Dividend Yield | 1.96 % | ROCE | 24.4 % |
| ROE | 20.9 % | Face Value | 10.0 ₹ | DMA 50 | 565 ₹ | DMA 200 | 653 ₹ |
| Chg in FII Hold | -0.92 % | Chg in DII Hold | 0.20 % | PAT Qtr | 131 Cr. | PAT Prev Qtr | 177 Cr. |
| RSI | 54.4 | MACD | -6.61 | Volume | 1,61,636 | Avg Vol 1Wk | 3,07,688 |
| Low price | 506 ₹ | High price | 876 ₹ | PEG Ratio | 1.67 | Debt to equity | 0.57 |
| 52w Index | 14.5 % | Qtr Profit Var | -21.1 % | EPS | 27.5 ₹ | Industry PE | 23.5 |
📊 Analysis: Godrej Agrovet shows decent fundamentals with ROCE at 24.4% and ROE at 20.9%, reflecting efficient capital utilization. EPS of 27.5 ₹ supports earnings strength, and the P/E of 19.7 is slightly below industry PE (23.5), suggesting fair valuation. Dividend yield of 1.96% provides moderate income. However, the PEG ratio of 1.67 indicates the stock is somewhat overvalued relative to growth. Debt-to-equity at 0.57 is manageable but higher than ideal. Quarterly PAT has declined (131 Cr. vs 177 Cr.), showing near-term weakness. Technicals show consolidation near DMA 50 (565 ₹) and below DMA 200 (653 ₹).
💰 Entry Price Zone: Ideal accumulation range is 530 ₹ – 550 ₹, closer to support levels and below DMA averages for margin of safety. Current price (560 ₹) is slightly above this zone, so staggered buying is advisable.
📈 Exit / Holding Strategy: For existing holders, maintain positions with a medium-term horizon (2–3 years). Partial profit booking can be considered near 850 ₹ – 870 ₹ (recent highs). Long-term holding beyond 3 years requires improvement in earnings growth and reduction in debt levels. Dividend yield provides modest income, but focus remains on capital appreciation.
✅ Positive
- Strong ROCE (24.4%) and ROE (20.9%)
- Dividend yield of 1.96% provides moderate income
- EPS of 27.5 ₹ supports valuation strength
- P/E of 19.7 is below industry PE (23.5), showing fair valuation
⚠️ Limitation
- PEG ratio of 1.67 indicates overvaluation relative to growth
- Debt-to-equity ratio of 0.57 is higher than ideal
- Quarterly PAT declined (131 Cr. vs 177 Cr.)
- Stock trading below DMA 200, showing weak momentum
📉 Company Negative News
- Decline in FII holdings (-0.92%)
- Quarterly profit variation negative (-21.1%)
- MACD negative (-6.61), showing weak momentum
📈 Company Positive News
- DII holdings increased (+0.20%)
- Strong efficiency ratios (ROCE/ROE)
- Dividend yield supports investor confidence
🏭 Industry
- Agro and FMCG sector enjoys steady demand
- Industry PE at 23.5 highlights moderate valuation levels
- Sector rotation favors consumer staples in defensive cycles
🔎 Conclusion
Godrej Agrovet is a moderately valued agro-FMCG stock with strong efficiency ratios and a fair dividend yield. While near-term profit weakness and debt levels are concerns, long-term prospects remain stable. Ideal strategy: accumulate near 530–550 ₹, hold for 2–3 years, and book partial profits near highs (850–870 ₹). Long-term compounding potential depends on earnings recovery and debt management.