Add Godrej Agrovet, target price Rs 720: ICICI Securities

ICICI Securities has add call on Godrej Agrovet with a target price of Rs 720. The current market price of Godrej Agrovet Ltd. is Rs 635.35. Time period given by analyst is one year when Godrej Agrovet price can reach defined target.

Godrej Agrovet Ltd., incorporated in the year 1991, is a Mid Cap company (having a market cap of Rs 12317.17 Crore) operating in Agriculture/Horticulture/Livestock sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1472.39 Crore, down -4.34 % from last quarter Total Income of Rs 1539.23 Crore and down -10.42 % from last year same quarter Total Income of Rs 1643.62 Crore. Company reported net profit after tax of Rs 49.87 Crore in latest quarter.


Investment Rationale
The brokerage expects GAVL to report revenue and PAT CAGRs of 13.2% and 20.2% respectively, over FY21-FY23E. The return ratios are also expected to be above cost of capital over FY21-23. It maintains ADD with a DCF based target price of Rs720 (30x FY23E). Key risks: Failure of new products and prolonged slow-down in out-of-home consumption.

Promoter/FII Holdings
Promoters held 71.7 per cent stake in the company as of June 30, 2020, while FIIs held 2.8 per cent, DIIs 1.3 per cent and public and others 24.2 per cent.