Add Godrej Agrovet, target price Rs 555: ICICI Securities

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Add Godrej Agrovet, target price Rs 555:  ICICI Securities


has add call on with a target price of Rs 555. The current market price of Godrej Agrovet Ltd. is Rs 515.

Godrej Agrovet Ltd., incorporated in the year 1991, is a Mid Cap company (having a market cap of Rs 9854.25 Crore) operating in Agriculture/Horticulture/Livestock sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 1539.23 Crore, down -11.14 % from last quarter Total Income of Rs 1732.22 Crore and down -14.10 % from last year same quarter Total Income of Rs 1791.99 Crore. Company reported net profit after tax of Rs 58.20 Crore in latest quarter.

Investment Rationale
The brokerage expects GAVL to report revenue and PAT CAGRs of 4.9% and 12% respectively, over FY20-FY23E. Return ratios (average RoE 18% over FY21E-FY23E) are also expected to be higher than the cost of capital. It maintains ADD on the stock with a DCF-based target price of Rs555 (26x FY23E EPS). Key risks: failure of new products and prolonged slowdown in out-of-home consumption.


Promoter/FII Holdings
Promoters held 70.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 3.1 per cent, DIIs 2.2 per cent and public and others 24.4 per cent.



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