Godrej Agrovet rallies 8%, hits 52-week high as Godrej Industries ups stake

On June 22, 2021, Godrej Industries purchased 976,047 shares, representing 0.51 per cent of total equity, of Godrej Agrovet worth of Rs 55.63 crore

Shares of Godrej Agrovet hit a fresh 52-week high of Rs 622.10 as they rallied 8 per cent on the BSE in Wednesday's intra-day trade after promoter Group, Godrej Industries, bought nearly 1 million shares of the company via open market purchases. With today's gain, stock of the agricultural products company has surpassed its previous high of Rs 596, touched on May 12, 2021.

On Tuesday, June 22, 2021, Godrej Industries purchased 976,047 shares, representing 0.51 per cent of total equity of Godrej Agrovet, worth of Rs 55.63 crore. The promoter bought these shares at price of Rs 570 per share via bulk deal on the BSE, exchange data shows. Balram Singh Yadav, an individual investor, sold 1.0 million shares at Rs 570.01 per share, the data shows.

As of March 31, 2021, Godrej Industries held 59.90 per cent stake, while Balram Yadav held 4.28 million  (2.23 per cent stake) in Godrej Agrovet, shareholding pattern data shows.

Fundamentally, analysts at Motilal Oswal Financial Services believe the company’s crop protection business is likely to do well going forward due to product launches in the standalone business (over the next 1-2 years), better performance in Astec Lifesciences owing to its expertise in triazole chemistry, and commencement of a new Herbicide plant.

The Animal Feed segment, they say, is seeing lower demand from restaurants/hotels due to the second wave and is still operating at lower capacity utilization than pre-Covid levels. "This has impacted demand for milk, chicken, and eggs. While the recovery in the segment is slightly postponed, it is expected to deliver a better performance v/s FY21 on a low base," the brokerage said in a report.

It added: The volume growth in the Palm Oil segment is likely to return in FY22E on higher arrival of FFBs (due to higher acreages) and better yields from the new plant with improved technology. Higher Palm Oil prices (nearly doubled in the last 13- 14 months) to aid margin expansion.