Chairman, Godrej Group
Godrej Agrovet Has Been Doing Well & Normal Monsoon Should Help: Godrej Group
Adi Godrej, Chairman, Godrej Group states that Godrej Agrovet has been doing well & normal monsoon should help.
About Adi Godrej
Adi Godrej announced the launch of Godrej Wealth, a wealth management business targeting ₹1 lakh crore in assets under management by 2031. He described financial services as an area of significant opportunity in India and said wealth management was a logical next step after entering lending businesses five years ago through Godrej Capital, which includes an NBFC and a housing finance company. Godrej stated the investment in the wealth management business would be at most around ₹500 crore, focused on technology and personnel. Godrej also said Godrej Capital is expected to list within five years, by March 2031, with the exact timing dependent on market conditions and business performance. He noted that the group plans to enter allied businesses such as asset management over the next few years, but will proceed step by step. In Godrej Consumer Products, he mentioned a recent small acquisition of the men's face wash brand Must Talk.
Transcript (17 segments)
✨ AI-enhanced transcript with speaker attribution
H
Host 10:00
We have Adi Godrej now joining us. Poultry stocks have been on a tear, and Godrej Industries is also in the news as it holds just over 60% in Godrej Agrovet, which is actually going to be a listed company in some time. Mr. Godrej, good morning, always good to have you on the show. The timeline for the Godrej Agrovet IPO, and what kind of growth do you think this company could report going forward? Because we have seen some peer companies reporting decent growth over the last six months or so.
A
Adi Godrej0:34
I think it should do well. Monsoon is shaping up very well, but unfortunately I am not permitted to talk about the IPO.
H
Host 10:42
I understand that. I was just referring to the kind of opportunity which is there in this particular space, because some of your listed peers have done well.
A
Adi Godrej0:51
Yes, we think there's tremendous opportunity in this space. We think that things in the agricultural sector are changing very dramatically, and our R&D and go-to-market strategy have led to very good forward-looking products and performance.
H
Host 21:15
Mr. Godrej, good morning and thanks so much for joining in. If you could talk about the industry, the poultry industry in particular. The reason we ask is because the market has practically priced in most of the poultry stocks. So what is the industry growth looking like in FY18, and is it higher than what we've seen in the past?
A
Adi Godrej1:38
Sorry, I don't follow each section's details as you might, because I'm not directly running Godrej Agrovet.
H
Host 11:51
I take that point, but on a broader level, let's talk about GST. A lot of sectors where there is a big unorganized play, they perhaps will benefit with the move to organized. Could that happen for the poultry space as well?
A
Adi Godrej2:06
Yes, I think it could happen in many spaces that our company is operating in. Because it's not a question of small scale or medium scale versus large scale. It's more a question of any business which evaded taxes earlier will find it very difficult now. So I think there will be a movement from tax-evading businesses to tax-compliant businesses with GST, and this will apply to all sectors, to my mind.
H
Host 32:40
Of course you'll be hampered by the fact that since you are in the process of the IPO of Godrej Agrovet, you won't be able to give us too much information. But on a consolidated basis, for Godrej Industries, most of your businesses are doing well. Godrej Properties clearly is doing well, Godrej Consumer we saw phenomenal numbers after the last quarter and a re-rating in the stock overall. How is FY18 shaping up?
A
Adi Godrej3:07
I think FY18 will be very good for Godrej Industries, because as you rightly put it, the constituent businesses will do very well. I think one of the major reasons why Godrej Consumer Products, Godrej Properties will benefit will be the introduction of the GST. I think in the second half of the year, the GST will lead to strong growth in many industries where efficiencies will improve, logistics will improve, costs will improve, and in many cases even the rates of taxes have been very moderate. So I think consumption will improve, overall GDP growth will improve. So I expect the economy to do well and some of our businesses will particularly benefit from that.
H
Host 34:01
So you're in the process of listing Godrej Agrovet, but the standalone business also includes chemicals, estate management, and finance investments, etc. Any plans of restructuring in Godrej Industries or getting a listing of your sub-industries?
A
Adi Godrej4:17
No, apart from Godrej Agrovet, we have no plans at this point in time.
H
Host 34:25
So on the consumer side, is the entire supply chain now pretty much in sync with GST? And can we start seeing normalization as quickly as the second quarter itself, the restocking so to speak?
A
Adi Godrej4:37
We feel things will improve, and there was some destocking in the month of June. I think in July and August things should improve, but I expect strong benefits from the effects of GST from October onwards.
H
Host 24:57
Moving on to Godrej Properties as well. Mr. Godrej, now with RERA coming into effect, the feedback that we have is that larger players are going to get bigger as the smaller players will give in. Would that be a right assumption?
A
Adi Godrej5:14
Yes, I think RERA will favor businesses that consumers trust. And in our case, we've already registered some of our new projects under RERA. And as the governments all over the country get active on implementation of RERA, we think there will be some benefits to players like us. And GST itself will also benefit players like us.
H
Host 15:47
Okay, all right, Mr. Godrej, thank you so much for joining us and giving us those insights this morning on the show.