GOOD PROSPECTS

ended December 2016. Godrej Agrovet has popular brands such as Real Good Chicken and Creamline Dairy Products under its umbrella. It acquired a stake in plant nutrients and herbicides company Astec Lifesciences recently, and that will be another growth engine. Analysts value Godrej Agrovet between ~5,626 crore and ~7,217 crore or 21-25 per cent of Godrej Industries’s fair value based on the sum of its parts.

“Godrej Agrovet’s implied Revenues (~cr) % chg y-o-y Ebitda margin (%) * Bps chg y-o-y Net profit (~ cr) % chg y-o-y market capitalisation comes to ~3,800 crore (assuming a discount of 20 per cent) on the back of its trailing 12-month adjusted net profits of ~215 crore, which is at a significant premium to its holding cost of ~144 crore. This will further enhance GIL’s overall value,” says an analyst at domestic brokerage Sharekhan. While the issue size is not yet finalised, the listing of Godrej Agrovet will lead to value unlocking for GIL.

Most of GIL’s businesses 4,298 3 7.2 -91 190 -11 5,124 30 8.5 134 215 14 5,985 17 9 50 273 27 have been doing well. Analysts say both its larger subsidiaries — Godrej Consumer Products (holds 51.21 per cent) and Godrej Properties — could post strong double-digit growth over the next twothree years. Both the firms stand to gain market share from their unorganised counterparts after the introduction of the goods and services tax and Real Estate (Regulation & Development) Act. Nature’s Basket — GIL’s online and retail gourmet store brand — too is growing at a healthy clip. In this backrop, analysts are positive on the GIL stock and believe news flow around the IPO as well as continued traction in other businesses will keep the sentiment on the stock positive.