Major Stake Acquisition in Dairy Sector: The Agriculture Based Company Acquires 48.06 per cent in Creamline Dairy for Rs 930 Crore; DIIs increased stake last Quarter
Over the past year, the stock has delivered a return of 44.63 per cent, with a three-year return of 54.58 per cent.
Godrej Agrovet Limited has announced significant decisions following its Board of Directors meeting on March 11, 2025. The company has approved the acquisition of the remaining 48.06 per cent equity stake in Creamline Dairy Products Limited (CDPL), a material subsidiary, making CDPL a wholly owned subsidiary. This acquisition involves a cash consideration of Rs. 930 crore. The transaction, which involves purchasing shares from the promoter group of CDPL, is structured as a related party transaction conducted on an arm’s length basis. CDPL, a prominent player in the milk procurement and processing industry in southern India, reported a turnover of Rs. 1,54,050.18 lakh for the financial year ending March 31, 2024.
Additionally, Godrej Agrovet has appointed Mr. Y. V. Sathish as the Head of Manufacturing & Supply Chain Excellence, effective March 24, 2025. Mr. Sathish brings nearly three decades of experience from leading FMCG companies such as GlaxoSmithKline and Hindustan Unilever Limited. His expertise in manufacturing, project management, and digital transformation will be instrumental in his new role. This appointment follows the early superannuation of Mr. Prafulla Bhat, the former head of the department.
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Godrej Agrovet Limited, with a current stock market price of Rs. 739.8, has a market capitalisation of Rs. 14,336.93 crore. Over the past year, the stock has delivered a return of 44.63 per cent, with a three-year return of 54.58 per cent. The stock's 52-week high is Rs. 877.85, while the 52-week low is Rs. 475.7. Godrej Agrovet continues to be a significant player in the Indian agribusiness sector, focusing on animal feed, crop protection, oil palm, dairy, and poultry. The company has been maintaining a healthy dividend payout of 53.51 per cent.
In the Quarterly Results of December 2024, the company reported a revenue of Rs 2,449.63 crore, compared to Rs 2,448.75 crore in September 2024 and Rs 2,345.21 crore in December 2023, reflecting a growth of 4.45 per cent YoY and 0.04 per cent QoQ. The net profit stood at Rs 111.49 crore, lower than Rs 112.30 crore in the previous quarter but higher than Rs 91.84 crore in the same quarter last year, showing a growth of 21.40 per cent YoY and a decline of 0.72 per cent QoQ. The net profit margin for the quarter was 4.55 per cent, compared to 4.59 per cent in September 2024 and 3.92 per cent in December 2023.
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For the financial year 2024, the company posted a revenue of Rs 9,560.55 crore, an increase from Rs 9,373.68 crore in FY23, marking a growth of 1.99 per cent. The net profit for FY24 stood at Rs 416.07 crore, significantly higher than Rs 269.09 crore in FY23, reflecting a growth of 72.63 per cent. The net profit margin for the year improved to 2.81 per cent from 1.66 per cent in the previous financial year.
As of December 2024, the shareholding pattern stands as follows: Promoters hold 67.56 per cent, Foreign Institutional Investors (FIIs) hold 7.10 per cent, Domestic Institutional Investors (DIIs) hold 6.25 per cent, and the public holds 19.10 per cent. There is a significant change in promoter shareholding, which has decreased from 74.02 per cent in September 2024 to 67.56 per cent in December 2024.
With a PE ratio of 36x, the company trades at a premium compared to the industry PE of 30.1x. The company has ROCE of 13.7 per cent and ROE of 14.9 per cent.
Investors must keep this Mid-Cap stock on their radar.
Disclaimer: The article is for informational purposes only and not investment advice.