Godrej Industries Limited , a diversified conglomerate, has released its financial results for the second quarter, revealing a mixed performance with increased revenue but a decline in net profit.

Financial Highlights

The company reported a significant increase in total income for Q2, rising to ₹6,290 crore from ₹5,118 crore in the same quarter last year, marking a 23% year-on-year growth. However, the net profit attributable to shareholders decreased by 16% to ₹242 crore, compared to ₹288 crore in the corresponding quarter of the previous year.

*Including share of profit in associates & exceptional items #With share of profit in associate companies, post reduction of non-controlling interest

Segment Performance

Godrej Industries' diverse portfolio showed varied performance across different segments:

Chemicals

Revenue increased by 29% to ₹1,059 crore, with a slight 2% increase in PBIT to ₹97 crore.

Animal Feeds

Reported revenue of ₹1,217 crore with a PBIT of ₹71 crore.

Vegetable Oils

Saw significant growth with revenue of ₹776 crore and PBIT of ₹127 crore.

Estate and Property Development

Emerged as a strong performer with revenue of ₹1,950 crore and PBIT of ₹674 crore.

Finance and Investments

Generated revenue of ₹840 crore with a PBIT of ₹83 crore.

Business Highlights

Godrej Properties Limited (GPL)

• Reported a robust performance with Q2 booking value growing 64% year-on-year to ₹8,505 crore.
• Sold 4,522 homes with a total area of 7.14 million sq. ft.

Godrej Agrovet Limited (GAVL)

• Animal Feed segment delivered record quarterly volumes.
• Vegetable Oil segment saw stellar year-on-year growth in revenue and margins.
• Crop Protection Business revenues stood at ₹213 crore.
• Dairy segment remained stable with value-added products showing ~10% growth.

Chemicals Division

Received the ICC Award for Best Compliant company for employee Health & Safety code.

Outlook

While Godrej Industries has shown strong revenue growth, the decline in net profit may be a point of concern for investors. The company's diversified portfolio appears to be providing some resilience, with strong performances in real estate and vegetable oils offsetting challenges in other segments.

The management may need to focus on improving profitability across segments to translate the robust revenue growth into better bottom-line results in the coming quarters.

Investors and analysts will likely keep a close eye on how Godrej Industries manages its diverse business portfolio and navigates the current economic environment to improve its overall financial performance.

Godrej Industries Limited (GIL) has increased its shareholding in its subsidiary, Godrej Capital Limited (GCL), from 90.89% to 91.11% through a rights issue. This move strengthens GIL's position in the financial services sector and demonstrates its commitment to growing its investment in GCL.

Key Details of the Transaction

About Godrej Capital Limited

Godrej Capital Limited is a Core Investment Company that holds equity shares in Godrej Housing Finance Limited and Godrej Finance Limited. The company has shown significant growth in its total consolidated income over the past three years:

This substantial increase in income highlights the rapid growth and potential of GCL in the financial services sector.

Transaction Details and Implications

The acquisition was completed through a cash transaction, with GIL fully subscribing to the rights issue conducted by GCL. This primary infusion of capital is expected to support GCL's growth plans and strengthen its position in the market.

The transaction was conducted at arm's length, ensuring fairness and transparency in the deal between the parent company and its subsidiary. This move aligns with Godrej Industries' strategy to expand its presence in the financial services sector through its core investment company, GCL.

As per the regulatory filing, the acquisition falls within the overall limit approved by GIL's shareholders for making investments in GCL under Section 186 of the Companies Act, 2013, ensuring compliance with legal and regulatory requirements.

This strategic investment by Godrej Industries in Godrej Capital underscores the company's confidence in the growth potential of its financial services arm and its commitment to strengthening its position in this sector.