“We do expect some bullish factors still to play out like Ramzan, but we are expecting big Latin American soybean oil crops so that will moderate the bullishness,” says Nadir B Godrej, CMD, Godrej Industries.

Let us discuss what has happened in October to November and that is the surge in the palm oil prices. They had surged a bit, but then there has been a bit of a volatility. They have corrected a bit of late as well. What is the sense on the prices going forward? Are they expected to be as volatile or what are the levels that you are watching out for?
Nadir B Godrej: This has been a very unusual situation because palm oil has had a huge premium over soybean oil, which we have not seen in the past. It was always a discounted oil, but it is in high demand nowadays for both biodiesel as well as for speciality fats and that is keeping palm oil at a premium to the other oils. It was even at a premium to rapeseed oil and sunflower oil for a while and a big premium to soybean oil. We do expect some bullish factors still to play out like Ramzan, but we are expecting big Latin American soybean oil crops so that will moderate the bullishness. And by June, we will see a more normal situation for palm oil where it would not be at a premium over soybean oil. The weather is playing tricks on us. Climate change is causing a lot of disruption in agriculture. So, it is very difficult to predict.

Give us a sense of what the animal feed segment is looking like right now because favourable commodity positions and cost optimisation measures have aided the performance of the animal feed segment over the last few quarters to some extent. Will increased efficiency aid margins for this segment going ahead as well? And what is the margin profile that you are targeting when it comes to animal feed?
Nadir B Godrej: We expect good margins in the animal feed sector. We have invested a lot in R&D for animal feed. It makes the feed lower cost and more efficient. So, the environmental impact is also less and we are very pleased with our efforts in this area. So, even with high commodity prices, we hope to have good margins because of the efficiency of our feeds.

Also, share with us your outlook on the dairy segment. Are you on track to achieve the VAP share of 40% in FY25?
Nadir B Godrej: Yes, we have had good traction in increasing the value-added portion in our dairy business and we expect that trend to continue.

But what about Astec because that has been facing short-term hurdles when it comes to the enterprise business, even CDMO for that matter. Has that segment recovered at all in this quarter?
Nadir B Godrej: There is still problems in the CDMO sector as well as the enterprise products and we cannot discuss about the quarter at this early stage right now.But what about the domestic crop protection business then because there has been erratic rainfall, weather patterns have been all over the place and that, of course, has been impacting the herbicides category as well. Any improvement in this quarter?
Nadir B Godrej: Directionally speaking, crop protection is doing very well because the situation in India is quite good and we are also expecting good rabi crops. So, we think crop protection will continue to do well. The business has got their act together, they no longer have outstandings. So, all this is helping the business significantly.
We did speak about individual segments and the outlook of what you are expecting going into the next year. But at an aggregate level, if you could help us understand what is your overall outlook for the year that is going to come ahead?
Nadir B Godrej: Overall, for Godrej Agrovet, outlook is good. Other than Astec, all the other businesses seem to be firing well. Oil palm seems to have a very bright future. The government’s new oil palm policy is excellent and we would hope that more and more states sign up for it. And we ourselves have been allocated areas in Gujarat in three districts.

We are working with Odisha as well. We are going to put up a palm processing mill in Tripura, which will be our second oil palm mill in the northeast. We already have one in Mizoram. So, we expect a good expansion in Gujarat, Odisha, Telangana, and in the northeast and, of course, we have always been very well established in Andhra Pradesh.

But on an overall basis, also talk to us about the chemical business of Godrej Industries. What are some of the key things to watch out for? What is the outlook for the chemical business also heading into 2025?
Nadir B Godrej: Godrej Industries’ chemical business is on a good track and we are going more and more into speciality products, one of which is sophorolipids, for which we see a bright future. Our speciality products are doing well and both fatty acids and fatty alcohols are doing reasonably well and the trend is good.