Godrej Industries may see businesses doubling in revenues, consumer base in 5 years

Godrej Industries may see businesses doubling in revenues, consumer base in 5 years

The Godrej Industries & Associate Companies (GILAC) Group may record a 2x growth in revenue and consumer base in the next five years.

The GILAC Group includes companies like Godrej Consumer Products (GCPL), Godrej Agrovet (GAVL) and Godrej Properties (GPL).

According to a TOI report, GAVL, which enjoys a dominant position in India’s animal protein space, has an outlook to double its revenues to nearly Rs 20,000 crore, and triple its profit margin. It plans to have a disproportionate share of revenues from branded/value-added products in the food businesses focused on dairy and poultry. While continuing to invest in the contract development and manufacturing operations-based B2B agrochemical business over the period of this decade, the company plans to double its area under oil palm plantation.

In addition, GCPL is currently the group’s largest business in revenues (around Rs 12,000 crore as of FY22) and sells in around 100 countries. “Its vision is to increase the number of consumers it serves globally from an estimated 1.2 billion to 2 billion. The strategy is threefold: To develop the categories GCPL is present in, to generate fuel for growth by simplifying its business, and to place people and planet alongside profit,” stated the report.

Given the current rate of growth and the sectoral prospects of some of its businesses, the over Rs 27,000-crore GILAC could see GPL leapfrog in the near future. New businesses like financial services are also seen to have the potential of becoming a bigger part of the pie.

In an exclusive interview with TOI, Godrej Industries (GIL) CMD Nadir Godrej said GPL is growing quite fast as “India needs to be built and there’s a lot of opportunity”. GPL clocked a booking value of Rs 7,861 crore for FY22, a growth of 17% over the previous year. “GPL’s core vision is to establish market leadership with the strongest brand recall and deliver superior value to all stakeholders. For the next five years, the organisation is committed to drive the value-creation trajectory into the next orbit by strengthening the critical business pillars of growth, profitability, quality and longevity,” reported TOI citing Godrej.

“Consumer products (GCPL) has slowed down a bit, but it’s steady. The oleochemicals (oils & fats) business has not grown a lot in top line, but it has grown a lot in profits. Most of the businesses are growing at more or less the same rate. Agrovet (GAVL) is growing a little slower now, but over time as the oil palm business grows very rapidly, it may once again become the fastest growing business. Financial services could grow faster than anything else,” said Godrej, who took over as chairman of Godrej Industries in October 2021, after his elder brother Adi Godrej decided to step down.

On financial services, Godrej reckoned it would take at least five years for it to become a bigger business. “I don’t think the shape of the (overall revenue) pie will change much, the size of the pie will change. The shape may change mostly as financial services becomes the bigger part of the pie,” said Godrej. He added, “We prefer to make a few big bets like the financial services.” Chemicals, on the other hand, will continue to focus on leveraging science and technology.

“We believe that the next five years look extremely positive for our chemicals business, given the growing Indian market, the China-plus-one focus and other global factors. Green and sustainable technologies, biochemicals, innovative application development with multifunctional ingredients offer a great opportunity to our chemicals business in its growth journey. Our focus on R&D to innovate, find newer applications, greener solutions, etc, will hold us in good stead to achieve both profitable and sustainable growth. We also have the advantage of synergies with entities in the group,” TOI quoted Godrej as saying.

GILAC is coordinating all R&D centres to share learnings and product offerings, as oleochemicals are used in agri-chemical formulations and personal care ingredients are used in making consumer products, thus bringing in cost advantages.

GIL has two mainlines of business: One, its own business of chemicals, estate management, finance & investments, and second, its shareholdings in group companies. GIL’s holding in Godrej Capital is 91.8%. In GAVL, it has around 65%, while in GPL and GCPL, it holds about 47% and 23.7%, respectively.

(With inputs from TOI)

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