GODREJ AGROVET LTD (NSE: GODREJAGRO) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Nadir Godrej — Chairman
Balram Singh Yadav — Managing Director
Analysts:
Jignesh Desai — Analyst
Abhijit Akella — Analyst
Ashvin Shetty — Analyst
Aejas Lakhani — Analyst
Sumit Kumar — Analyst
Jignesh Kamani — Analyst
Aman Vohra — Analyst
Pinkesh Shah — Analyst
Presentation:
Operator
Good ladies and gentlemen, good day and welcome to Godri Threat Limited Q3 FY ’25 Earnings Conference Call hosted by PhillipCapital. [Operator Instructions]
I now hand the conference over to Mr Jignesh Desai from PhillipCapital. Thank you, and over to you, sir.
Jignesh Desai — Analyst
Thank you, Ms Kan. Good afternoon, everyone, and thank you for joining us on the Godrej Aggregate Q3 FY ’25 earnings conference call. From the management, we have Mr Nadir Godrej, Chairman; Mr Balram S. Yadav, Managing Director; Mr S. Varadaraj, Chief Financial Officer; and Mr Arijit Mukherjee, Chief Operating Officer, Astec LifeScience. We would like to begin the call with brief opening remarks from the management, following which we will open the forum for a Q&A session.
Before we start, I would like to point out that some statements — statements made in the today’s call may be forward-looking and a disclaimer to that effect has been included in the earnings presentation shared with you earlier. I would now like to invite Mr Najir Godresh to make the initial remarks. Thank you. MR.
Nadir Godrej — Chairman
We continue to deliver strong profit growth in-quarter three fiscal year ’25, fueled by robust performance in the vegetable oil, animal feed and poultry businesses, while revenue growth was moderate, EBITDA margins excluding non-recurring items improved in-quarter three fiscal year ’25 by 200 basis-points as compared to quarter three fiscal year ’24. Coming to the key financial and business highlights of each of our business segments. In the Animal Food segment, margins improved sharply from 4% in-quarter three fiscal year ’24 to 6% in-quarter three fiscal year ’25 on account of favorable commodity positions. Further, our EBIT per metric ton significantly improved by 45% from 1,338 rupees in-quarter three fiscal year ’24 to INR1,935 rupees in-quarter three fiscal year ’25. Quarter three fiscal year ’25 also saw a 10% sequential volume jump driven by cattle, raw and layer feed, but overall volume growth compared to quarter three fiscal year ’24 was marginal.
Our vegetable oil segment in-quarter three fiscal year ’25 delivered strong results with significant gross profit growth driven by higher crude palm oil, CPO and palm oil, PKO prices and an improved oil extraction ratio for OVR. This also reflected in a 45% year-on-year increase in segment revenue despite flat fresh fruit bunch arrivals. In-quarter three fiscal year ’25, segment revenue and margins in the standalone crop protection business were adversely impacted by lower sales volumes in the email license category. This decline was primarily due to localized stream events in key markets and subdued crop prices. Astec made significant progress in-quarter three fiscal year ’25, reducing its EBITDA losses to INR4 crore from INR18 crore in the previous quarter and INR17 crore in-quarter three fiscal year ’24. The improved performance was primarily due to higher volumes in the CDMO business, which helped offset the impact of lower realization in the key enterprise products.
The company expects this positive momentum to continue in the coming quarters. In-quarter three fiscal year ’25, our gaming segment saw steady performance in segment revenue and margin. We continue to see positive movement in value-added products, which reached 34% of total sales, improving both year-on-year and sequentially. In our poultry business, quarter three fiscal year ’25 revenue was marginally lower year-on-year, primarily due to a deliberate reduction in live bird business volumes as the company continued its strategic shift towards the branded segment. However, profitability improved significantly in-quarter three fiscal year ’25, primarily driven by higher live birth prices. Joint-venture in Bangladesh, ACI recorded decline in revenues of 13% year-on-year in-quarter three fiscal year ’25 due to the ongoing economic challenges and political instability in Bangladesh. This concludes our business and financial performance update for the quarter.
With this, I close my opening remarks. We will be now happy to answer your questions. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Abhijit from Kotak Securities. Please go-ahead.
Abhijit Akella
Yeah, good afternoon and thank you so much. So my first question pertains to Astec Life Sciences. We had expected a significant increase in CDMO revenues this year. I believe in the past, we have guided to about INR400 crores for the year, about 50% growth. So just in the context of how the year has unfolded, if you could please update us on what your current expectations are both for the remainder of this year and then for fiscal ’26, please?
Nadir Godrej
Okay. Yeah, this is. So this year, in fact, if you see the guidance earlier, we have told CDMO year-on-year, we grew around 30% to 40%. So we stick to that. This year is a little bit, it has been less one because of price correction and some molecules have not come because of the — more of a market situation. In terms of ’26, we have done the basic meeting with most of the CDO players. So as of now, which we feel almost all the projects are coming back to the normal scale. In fact, the volume projections we are getting to date is the normal volume projections we see. Prices will be very difficult to say right now, but what we can see from China bottom out is over now. So prices are either stabilizing or a little bit showing a little bit increase. So our guidance remains that year-on-year, we will be growing at 40%.
Abhijit Akella
Okay. Thank you for that. Thanks. And my second question is with regard to the animal Feed segment, the EBIT per ton has expanded quite sharply in the first 3/4 of this year. How much of this is sustainable and what should we look for margins to be in the — in coming quarters, maybe for fiscal ’26 overall.
Nadir Godrej
Yeah. So I think the EBIT in this quarter has been about INR1935, INR1935 per ton. I must also say that it is because of some raw-material situation has been benign, but there are a lot of other initiatives also, particular from R&D and margin expansion initiatives through cost, which have also resulted in this increase. The kind of coverage we have and the initiatives we have in the pipeline, we believe that we will be able to get an EBIT of over INR2,100 in Q4. If you ask me if we are able to hold-on to all the benefits which we have got this year apart from raw-material, we should be able to hold-on to INR1,800 to INR2,000 per ton in FY ’26 also.
Abhijit Akella
Okay. Thank you, sir. That’s helpful. And just one last thing from me, if I may. On the standalone crop protection business where things seem to have gotten a little bit challenging in the last couple of quarters because of various reasons. If you could please share your thoughts on how you expect the business to shape up?
Nadir Godrej
So I think one of the — one of the important things which we need to remember is that monsoon is very, very critical to the country and for the agriculture economy also. And it so happen towards the end-of-the season, that is Karis season, the — there were not too many sprays which were there here before last because of rains, et-cetera and the pest infestation was also not very big. So our volumes in some of the in-licensing products were subdued and a lot of material also was taken back for hygiene reasons. So that was the reason why it was subdued. Having said that, I must also tell you that Q4 is a very normal Q4, the expectation is of a good year and you will see a significant improvement — improvement in Q4 over Q3 in both top-line and bottom-line you.
Abhijit Akella
Understood. Thank you so much. And I’ll get back-in the queue for any more. Okay.
Operator
Thank you. The next question is from the line of Ashvin Shetty from Marcellus Investment Managers. Please go-ahead.
Ashvin Shetty
Thank you, sir, for taking my question. Sir, can you just dwell deeper into — you said that there’s a lot of materials taken back due to hygiene reason in the crop protection segment. Can you dwell a little bit deeper into that? What exactly happened?
Nadir Godrej
Yeah. So the issue is that sometimes the farmer does not use the sprays because our sprays are also a function of the crop condition. So when there is no pest, why do you need pesticide? I think that was one of the reasons, particularly in Chile’s that last year — year before last Star product, which is a in-licensing product, the sales absolutely dropped significantly just because there was no requirement of that spray. So from, from say agri point-of-view, farmer point-of-view, it was good news because the prices of Chile are low and this chemical is very expensive. So it brought down the cost of production, but that does not mean that it does not have opportunity in other crops. So this can be used across vegetable crops. So it is just a matter of time that we will be able to liquidate this molecule in Q4 and Q1 of the next year. And just to make sure that the hygiene is there, we didn’t want our stocks to be lying in the market unattended and in poor storage conditions. So we picked-up all the material which was there in the market. Just to remind you, this herbicide, as you know, is very expensive, cost about INR crore per KL. So I think it has to be handled differently. So this is the story. The story for Q4 is the season is likely to be good. People have started asking for material for Farif and we have also started dispatching because as you know, the retail pipeline takes about two, three months-to fill. So I think the action has already started and you’ll see more of it in the month of February and March.
Ashvin Shetty
Yeah. Understood. And sir, secondly, we saw a very super performance in the farm oil division. So how sustainable is that we saw one of the best EBIT margins in this segment. So your view on the outlook going-forward?
Nadir Godrej
Sure. We have to thank Government of India for that. Whatever we did, we were showing it earlier also, but that 20% duty was not there. So palm oil prices had started — rising internationally also because of the B20 mandate by the Indonesian government, which was supposed to be implemented from 1st of April, 1st of January and that postponed to 15th of Feb. So Indonesia taking off 40% of their palm oil for biodiesel, it is a very big thing because Indonesia is the largest producer of palm oil. Apart from that, in plantation crops, sometimes trees also produce less. So it was one such year. So all these were bullish reasons, plus this duty also helped. So that is why we had such a fantastic quarter three.
Ashvin Shetty
Okay. Okay. Thank you, sir. Thank you.
Nadir Godrej
I must also add for the investors that any increase in price, only 20% comes to us, about 80% of the price benefit goes to the farmers in this business.
Ashvin Shetty
Thank you.
Nadir Godrej
Thank you. The next question is from the line of Aejas Lakhani from Unifi. Please go-ahead.
Aejas Lakhani
My first question is pertaining to Dairy.
Nadir Godrej
Sir, can you can you please louder.
Aejas Lakhani
Yeah. Is this better? Are you able to hear me?
Nadir Godrej
Yeah.
Aejas Lakhani
Yeah. Perfect. Sir, my first query is regards to dairy. Could you call-out why did we have a slightly seasonally sequentially quarter? And how do you expect the margin trajectory to play-out for 4th-quarter and the next year? And also if you could call-out what is the direct procurement there and VAP sales?
Nadir Godrej
Yeah. Okay. So you have asked for data, so give me some time to respond. Sure. So I would say that first-nine months, we have grown the revenue by about 1.7%, which is flat, but there is a significant improvement in EBITDA. So EBITDA has grown by about 70%. But as far as quarter three is concerned, the revenues grew by 1% and the EBITDA dropped by 5.4% as compared to quarter three of FY ’24. I think one of the chief reasons for drop-in the EBITDA in Q3 was sudden increase in the milk procurement prices. And the main problem in this industry is that milk procurement prices increase, but the milk companies take their own sweet time sometime four to six-weeks to increase the consumer prices.
Until that time, we all suffer because of increased raw-material prices. So I think that has happened. However, one price increase has already come on 21st of January and the industry is gearing up for more price increases in case the raw-material — the raw-material, which is milk — milk cost increases. And so just to protect the margins. So that are the first thing. Second thing I must also tell you that CDPL is still work-in progress for us. I think our first phase, which started about year and a half, two years was that we wanted to correct the cost structure, which we have done and the outcome you can see if you — if you plot our gross margins, we are in the ballpark along with our competitors. All — all of us are in 27% to 30% bracket and we have already reached that. And we are — so the next thing is to get the volumes because now the incremental increase in profit is much higher because the contributions are very good. So it is time to push volumes and in all segments and that is what the plan is.
You will see a year monthly growth happening in most of our products in this — in this business. And now the season is coming. That is why since you asked me about Q4, Q4 is traditionally very good for us because when the temperature increases, the consumption of curd, buttermilk, plus sea and other value-added products like flavored milk, et-cetera, which are high-margin products, that sale goes up. So I believe that Q4 will be much, much better than Q3 as far as performance is concerned. You asked about direct farmer procurement, which is, I think 58% of total milk is now direct farmer procurement and every year we are increasing it considerably. The exit will be close to about 65% and I’m very sure that next year it will be close to about 75% to 80% direct farmer procurement. I think I must tell you with scale and direct farmer procurement, we will still be able to shave off almost 0.5% of cost in the coming quarters. Any more question which I missed?
Aejas Lakhani
Sir, the VAP contribution?
Nadir Godrej
Yeah, VAP is 44% or 45% of total sales.
Aejas Lakhani
Okay. Got it. Sir, would you quarter.
Nadir Godrej
Sorry, sorry. In this quarter it is 34%, but overall it is — for first-nine months, it is above 40%.
Aejas Lakhani
That’s encouraging. Sir, I just want to understand that you know the milk price — procurement price increase has marginally single-digit increase has just happened in the 3rd-quarter, but if you look at your numbers for even nine months there has been limited growth. So I wanted to understand that. And also, sir, compared to the other players who are in VAP indexed more towards and with you guys being more indexed towards the flavored milk and the bouquet of more products, not just curd, but curd plus as compared to somebody else, your ability to be able to price — pass-on the prices is not indexed to curred, right, or a specific — you have a larger bouquet. So is it — is it a fair assessment to understand that your ability to pass-on this price is much better or can be better.
Nadir Godrej
So I must tell you your — I understood what you’re trying to say. So definitely, our ability to pass-on prices is improving and that is also very clear if you take the Nielsen shares in two of our cities where we have significant share, which is Hyderabad and Chennai, we are seeing a steady improvement in our market-share in these products. So that is one. Second thing I must also tell you is that a price increase or a premium is also related to the marketing initiatives we undertake. And I must say for last almost a year, we have not done much, but because we were trying to correct our cost structure, which has happened. So in time to come, you will see the price premium start coming as we start advertising and which is — this is the start of the season and very soon, we will be hitting our plan and you will see significant improvement in the summer months in our numbers, backed by a very strong advertising.
Aejas Lakhani
Okay. Okay, sir. Sir, my second and the plan is also to follow it up with premium pricing. Got it. Okay. Sir, the second one I wanted to understand is that on poultry, you know, what is the specific cut now that of Livebirds, RGC and yummies, give or take as a percentage of our sales, say, for nine months because since our buy — since the buyout that we’ve made, our entire endeavor was to be more agile and reduce the that was associated with. So could you just comment about what progress we’ve made since the buyout there, what is the percentage split across live RGC and.
Nadir Godrej
So I’ll just give you where the business model is moving and you’ll get an idea what our focus is. Nine months FY ’24, Live Bird was 41%, it is now 26%. Yummy is nine months last year 15.9%, this year 20% and RGC nine months last year 43%, this year 54%. We plan to hold the live bird whatever surpluses we need for processing because we need some play there. And from now on, it will be only real good chicken and yummies, which will drive the growth and profitability of this division. And live bird will be close to about 20%, which is the minimum required to be in processing business.
Aejas Lakhani
Okay. Okay. Okay. So you will have a component of Live Birds being about 20% incrementally as we speak and frozen also adapts as quickly to live bird prices as the live bird category. Is that understandable?
Nadir Godrej
I think both — I would say yummies, which is the value-added chicken has no linkage to live chicken prices. So that is one good news. Second thing is in RGC also, 60% 70% of our business is contracted on three — on a quarterly basis with big QSRs. So there also with the volatility, we are we are — we are not going to be affected. And my sense is that both our plants in Hoscote, Bangalore and Taloja, Mumbai, we are operating at 90% capacity utilization. So this is a year for upselling and improving — expanding the margins of real good chicken. Some of it you will see Q-on-Q this year and we are very hopeful that we will be able to improve the margin by a couple of points in FY ’26 also.
Aejas Lakhani
Got it. And sir, 20% at any point will always be Livebird sales. So that’s the most optimal model to reach, right?
Nadir Godrej
Yeah. No, I’m saying 20% because, look, I’ll tell you this — one of the key requirements of our light bird processing, which we learned from our multinational partner was the health of the bird. So the issue is that birds are tested at the farms, whether they are fit to be slaughtered or not. So I think that is very important and there has to be uniformity also because they are not hand slottered. These are machine. We cannot pick-up a flock which has some 100 and some 1,500 gram birds, some 2.5 kilobertz because that will disturb the whole planning at the plant. So I’m saying there are lot of variables which are there. Considering that we are still sophisticating this part of the supply-chain, we have taken a conservative view that will let us keep 20% more. But as we improve this, as we are able to predict better, we will keep on bringing down this buffer.
Aejas Lakhani
Got it, sir. Got it. That’s very clear and very clear. I mean, perfect view, sir. Perfect. And sir, just I wanted to understand the ASTEC call-out. So CDMO, sir, your nine-month number is 135. And if I heard your team member saying earlier that the guidance to do a 30%, 40% call-out, which you had said was earlier 40%, not 30 sir. So that growth rate, if I were to just negate the — what has been done in the first-nine months, it’s a very tall ask. So you’re saying that you still feel comfortable to meet that number. Is that understanding correct?
Nadir Godrej
I must also tell you that this year was a big disaster for us as far as-is concerned, not that we lost any customers, but customers either picked very less or kept on postponing their procurement from us. So whatever number we think and this is the way we will do the budgeting for Aztec this time is that whatever confirmed orders we will have, a written confirmation from our partners who are buying, that is the only thing which we will talk about. Today, we see a visibility of anything between 30% to 35% growth over FY ’25 and ’26 with one or two important customers yet to revert. That is why my colleague said that a 40% guidance can be given. I’m extremely confident that if you ask this question to us in March, we will be able to confirm that also.
But we will not be as optimistic as we were last year because now we have a fair idea of how this industry works in bad times when people cancel and postpone the orders at very short notice. So I think. And whatever numbers we will say are — we will tell the street will be the numbers number which we already have in the back that has confirmed orders or backed by peers.
Aejas Lakhani
Got it. So that’s a nice realization and maturity that the team brings. But sir, what I wanted to understand is the guidance of ’25 over ’24, you’re still confident to meet the 30% number.
Nadir Godrej
I don’t think so. I must also acknowledge that there have — as we speak also some orders are still getting postponed or the confirmation has not come, so we’ll get to about 25% growth. FY ’25 over FY ’24? No, no, no. We won’t grow that much.
Aejas Lakhani
Yeah. So it will be a flattish here. Is that a fair understanding for CDMO?
Nadir Godrej
I think so.
Aejas Lakhani
Okay, sir. Got it. Perfect. And sir, just very sorry, but lastly, I just want to squeeze in one sir that. Sir, if you look at our animal Feeds margin and I’ve been hearing the calls for often. So I’m aware of the kind of changes you all have done on the R&D side and feeds to make it more richer, the product is more — better from an output perspective. But sir, if you exclude the ’22 ’21 years where we benefited at a margin level again because of the commodity, you know, lower prices, the steady-state number or at an EBIT per kg was in that 1.4 to 1.5. Now you’re saying that all the product level innovation changes, R&D pricing that has been able to do has structurally altered that 1.4, 1.5 and you feel that goes to 1.8 now. Is that understanding correct?
Balram Singh Yadav
I think that the what I would say is that lot of effort has already been made and I’m very sure what number you are talking will be exceeded. But having — having said that, I must also tell you that we are — we are extremely dependent on commodity and commodity is also a dependent on regulatory. So I’ll give you two examples to make you understand better. Now at one-time, our big competitor for corn was the starch industry. And they were also equally cost-conscious as we were. Today, our big competitor for corn is ethanol. So suddenly the entire game for corn has changed. The base price of INR18,000 two years ago. Today, the base price is INR24, INR25 and last year it went up to INR30. This is — this is one example.
The second example is, which is DORB. One of the biggest consumer of our DORB was Bangladesh. Now since we banned the exports to Bangladesh, the price which used to rain at INR18,, INR19,000 a ton is now at INR11,000 to INR20,000 a ton. So a lot of these things make lot of difference to how the profitability of this business works. And I would say that not expecting any big regulatory changes in time to come. But you should always keep in mind that neither we produce soyamine nor we produce corn ourselves. So we buy from the market and that will definitely be reflected. Unfortunately, what happens in this industry is that sometimes the time lags are very long the prices go up the person you are speaking with —
Aejas Lakhani
Hello just hello yeah, I think you went on-hold by mistake.
Balram Singh Yadav
I didn’t do anything.
Aejas Lakhani
Yeah, Balam, sir, we heard you last till the — till the point where you were speaking about that, the prices have become very dynamic and you were talking about starts.
Balram Singh Yadav
And so I’m saying that — and the third thing you must always remember in this industry is that we don’t have national competition. We have regional competition, dozens of players in every state. So our pricing is also even though we have been trying to get premiums, but we are never able to charge more than 1.5% premium over the local players just because there is so much transparency because they know the price — everybody knows the prices of raw-material also. I’m saying this business will always be at the levels which you spoke about we have been steadily increasing the EBIT per ton and hopefully that we are able to continue this, that is what my expectation is.
Aejas Lakhani
Got it. And sir, FFP arrival number, if you could just call-out.
Balram Singh Yadav
Arrival number they say Q3 we got lakh and lakh and 46,000 tonnes. Nine months we got 4,79,000 tonnes.
Aejas Lakhani
Got it, sir. Thank you. I have questions. I’ll fall-back. Yeah.
Operator
Thank you. A reminder to all participants, you may press R&1 to ask questions. The next question is from the line of Sumit Kumar from Motilal Oswal. Please go-ahead.
Sumit Kumar
Can you talk about the plantation of palm oil, how it is increasing for us. I would — because last many years we have seen not significant increase in FFP for us.
Balram Singh Yadav
So can you please be a little bit louder.
Sumit Kumar
So I’m talking about — can you talk about the falm oil plantation for us how it is growing? And what my observation is the way we are doing plantation, what data we got, the arrival is still flattish, still not growing what — whatever plantation we are doing.
Balram Singh Yadav
So let me just tell you, I think the — we are following the pattern which — but palm is following all over the world. And I said that in one of the answers earlier that even Indonesia, Malaysia are seeing decline in volumes per tree. So I think that may be a natural phenomenon. My sense is that it will improve again. But having said that, I must tell you that there this business, our areas are also adjoining Telangana. Sometimes there is a price difference and some leakages of fruit happens. However, we are trying very hard to keep the fruit, keep our farmers to ourselves, but you know-how Indian agriculture works, sometimes there is on leakages. And I won’t deny that.
The third thing is that how much we have done now that we got allocation in northeastern states, Orissa, now this year, there is a significant in Telangana, there is a significant increase in the area expansion this year. We might end-up anything between 13,000 to 14,000 hectare expansion this year. As compared to last year, it is almost 2.5 times. Last year, we were around 5,000 hectare from 5,000 last year, 6,000, so we are at about 14 — we will end-up between 13 and 14 this year and we have a lot of now. Last year, we were a little short, but we are not anymore. And I think we can repeat this again and again for next four, five years.
Sumit Kumar
So talking about the crop protection, I have seen a leading player in agrochemical market who is doing good, but we have a fluctuation or fluctuation in our numbers, a significant fluctuation. Sometimes we saw a higher double days, sometimes we saw a higher double-digit growth. But — and even this quarter, I have seen couple of companies are showing a good numbers and even in nine months also they are showing good numbers. So is there any issue with our portfolio inclined towards —
Balram Singh Yadav
So look, I’ll tell you that all big companies will have to be compared on product portfolios. Our portfolio is such that it was very focused on Chili, which did not happen. So I’m saying that we got into a little bit of trouble. But if you see with so much of focus on cotton, we are the leading players in cotton herbicide. So probably you’ll see very good numbers for us when you don’t see good number for some other company which is having products in another — for another crop. So I think this will continue. And I think this is — you give me a feeling of deja vu because about one or two quarters ago, I was asked whether we can continue with these high margins. And my answer was the same that it is agriculture. We cannot cover all the crops. Nobody has the capability to develop molecules for all the crops. So we just have to be a little bit lucky that the crop we are operating in is also performing. So I’m saying that this will always happen, but my suggestion is that don’t look at looking at us Q-on-Q. We will still give a stunning performance as far as the whole year is concerned and that I can assure you.
Sumit Kumar
Okay. Thank you. Thank you.
Operator
The next question is from the line of Abhijit from Kotak Securities. Please go-ahead.
Abhijit Akella
Yeah. Thank you for the follow-up. Just to dwell a little bit further on Aztec. So the — at the beginning of the call, if I heard you correctly, I think mentioned 30% to 40% growth for fiscal ’25 from the CDMO business. But later on, I think it was mentioned that we might only be flattish. So if you could please just clarify exactly what the expectation is or how much orders we actually have from the in-hand for this year.
Balram Singh Yadav
So that would — let me just clarify because I think since there is some sound issue, so actually the CAGR from FY ’22 to ’25 in CDMO on a small base was 42%. Okay.
Abhijit Akella
’22 to 25%.
Balram Singh Yadav
But this year CDMO, there will be no-growth, it will be flat. And next year, we are expecting, if you ask me today, any 30% plus or minus 2%, 3% can will definitely happen. But if you ask me two months later, I can tell you that there is a more accurate number because now we are talking not about expectations, but the orders we will get, we will talk about that already.
Abhijit Akella
Okay. Okay. So just to confirm, for fiscal ’25, we expect it to remain around INR270 crores, which is what it was last year.
Balram Singh Yadav
Yeah. Okay.
Abhijit Akella
Okay. And on the enterprise business, any improvement in prices, etc., that we are seeing in any of your key molecules or in-demand environment?
Balram Singh Yadav
Okay. So from 3rd-quarter onwards, there is an increase in prices. They’re not very significant, but at least if you say the prices have increased to a level of positive contribution for most of the enterprise businesses. But the best part is slowly the volumes are coming back. So what we see that 4th-quarter — 4th-quarter onwards that we should see a very significant or a significant recovery in terms of volume. That is what we are first primarily looking into. Price will be very difficult to say right now because there will be too much of competition, what is the seasonality. But for us, it is important that the volumes are coming back. And I think most of the inventory, the problem of inventory is over from Europe and US and if the domestic season of China and India picks up, I think the pricing — pricing will also see an improvement.
Abhijit Akella
Okay. So for the enterprise business, any sort of outlook you’d like to provide in terms of volume — volume growth?
Balram Singh Yadav
I think we are a bit cautious on the enterprise business. So we are expecting anything between 14% to 16% growth next year. We’ll be very happy with that, but we want an accretive growth as far as margins are concerned. Last year because we were or say FY ’25, we were stuck with high-cost inventory. So significant part of the year we had to sell at negative contribution. I think we don’t want to repeat that. So we will be extremely cautious in our inventory management, watch the prices and do the business on positive contribution only.
Abhijit Akella
Okay, understood. Thank you so much, sir. Wish you all the best.
Balram Singh Yadav
Thank you.
Operator
Thank you. The next question is from the line of Jignesh Kamani from Nippon Mutual Fund. Please go-ahead.
Jignesh Kamani
Yeah. Hi, just on the Animal Food segment. Volume growth a little louder, sir. Yeah. So if you think about the volume, you can see on the animal field, it still grew by just 1.8 percentage, though it is much better compared to what we have done in first-half. So how is the current trend in the volume across the three segment? Do you think that cattle feed, you can see earlier where the farmer was not investing in the cater because of lower milk price and everything. And there was also challenging in the — you can say there, how is the current scenario?
Balram Singh Yadav
I think that the volume growth Y-o-Y basis will looks healthy for the 4th-quarter and FY ’26. So 4th-quarter will be even better than the 3rd-quarter, both in terms of profitability and in terms of volume growth. My sense is that milk prices are likely to remain high in the coming quarters and layer was one area where the placements were less and that is why because if there is no bird, where will we sell the feed, that was one of the issues. But layer feed, fish feed, both these feeds are likely to see a big jump-in volumes next year because there is a lot of placement, which has happened in last quarter and this quarter the placement is still happening. So I’m confident that we will improve in Q4 and further improve in FY ’26.
Jignesh Kamani
Understood it. Second, on the dairy business, how is the — I can say trend in our milk price for both us and the industry? Because first you can say because you can say healthy us, price was under pressure.
Balram Singh Yadav
Yeah. So in the first week of December, the rate went up by about if we take about INR120, INR130 pesa per kg. And unfortunately, the price increase in-part of South India only came on 21st of January. So we had to suffer that cost increase for almost a month. And today, it is holding steady at pre say January 21st prices of the milk costs for us. And we are also watching along with other industry players in case the cost goes up further, we will be taking the price up further. But as far as I am concerned, I don’t think that we are going to see a very big spike in cost in next two, three weeks because normally it is in March when prices keep on-going up.
Jignesh Kamani
And so whatever the price increase happened and the mill procurement has been passed on to the industry, which leg.
Balram Singh Yadav
At the consumer level, it has happened at the — at the farmer level, price increased about a month and a half ago, but our prices went up only on January 21st.
Jignesh Kamani
Sure. Understood. Okay. Thanks a lot.
Operator
Thank you. The next question is from the line of Aman Vohra from Premium [Phonetic] Capital. Please go-ahead.
Aman Vohra
Hi, thanks for the opportunity. My first question is on. Just like three months, two, three months back-in the second-quarter call, we’ve given a guidance of about INR400 crores of CDMO revenue for FY ’25. While just in the matter of last two, three months, what has happened that we are cutting our For ’24 revenue guidance by 30% and.
Nadir Godrej
Really there is two — in fact, three particular CBMOs, which goes to almost US, Europe and Japan. And because of the larger inventory, it has a combination of both fungicide and herbicide because of the larger market inventory, we are cutting down on their projections. So that is the main reason for this 4th-quarter because initially it got delayed because this production usually starts from second-quarter, but it delayed to 3rd-quarter, then again there is a delay. This is mostly because the old inventories are there in the market.
Aman Vohra
Right. And on the enterprise side, like you mentioned that we are seeing positive contribution margins. So is it across the portfolio or there are still some molecules where we are seeing negative contribution margins?
Nadir Godrej
So for our major two molecules, it is positive. The remaining one we will see because the season has not come. The other two major molecules which goes for domestic and export, we are seeing almost positive growth in both domestic as well as export market. So both least about 10% quarter.
Aman Vohra
Got it. And just on the balance sheet side, post last almost 10 quarters of losses, we are sitting on huge debt and our net-worth has taken quite. So what is the larger view of the Agrowate Group and management on funding the STEC business.
Balram Singh Yadav
So we have been watching the situation very closely. The early signs for next year is that there won’t be any cash losses. So when — and we will — we discuss this almost every month and we’ll see how to fund this company if required, but we are still holding back any decision on that just to see the performance of the business for another quarter or so.
Aman Vohra
Right. Got it. And just the Agrowate business, sir, I’ve discussed with you multiple times in the last couple of years. If I see Agrowate as a consolidated entity, individually, all businesses have a lot of growth opportunities within them for, say, a decade. But the issue is that every quarter, one or the other business acts as a negative hedge. One would do exceptionally well, while there would be something else, which is it doesn’t do well, which as a consolidated entity, we do not see encouraging top-line growth over, say, a two-year, three-year CAGR period. So my question to you is, when you position this entity, maybe in structure or maybe a different structure where we — it can be more value-accretive for us investors because as minority investors, we’ve seen limited creation of wealth in since it’s listing about seven, eight years back.
Balram Singh Yadav
Spot-on, I think we also understand that because is not getting quoted at the current full potential also just because of this reason and difficulty to understand and one business is not doing well in one year and the other not doing well in the other year. I think we are — we are cognizant of that fact. We are thinking about how to simplify the structure so that you will get more visibility. So I think — I think this is also something which we are working on. Probably in time to come, you will hear more about this.
Aman Vohra
Right. Thank you so much, sir, for that. This is one request that I’ve made time and again and would request the management to kindly consider. And just one last one from me is the exchange filing on the INR1,000 crore raise that we were doing at Aggregate in the form of debt. Any update on that or anything that you want to enlighten us with?
Balram Singh Yadav
So we are looking at if we can — at internal accruals, et-cetera, because we want to drive down our working capital significantly in this quarter. I think we have plans to do that. So we just postponed that because we may not need INR1,000 crores, we may need INR600 crore, INR500 crore. Anyway, it was just an enabling resolution.
Aman Vohra
Okay. Got it, sir. Thank you so much and best wishes. Thank you.
Balram Singh Yadav
Thank you.
Operator
Thank you. The next question is from the line of Pinkesh Shah from Boring AMC. Please go-ahead.
Pinkesh Shah
Hi, my question is pertaining to the CDMO. What’s the kind of pipeline that has exists right now and what kind of molecule is? Yeah. And what kind of molecules do we expect to add-in the next few quarters?
Nadir Godrej
Because now pipeline, we have around 12 projects we are doing in R&D in different stages of R&D. So it is mostly into innovators who are working with. And I will say that commercialization date is very difficult to say because there is a requirement in terms of R&D followed by, say, other compliance issues of registration, data generation. But I think next three to four quarters, we will see one-by-one some projects are coming online because commercialization is not a problem because we have sufficient assets with us. We are where the commercialization will happen. Now it is a matter of R&D, then slowly the registration is coming online. But all the projects have a definite timeline in terms of commercialization.
Pinkesh Shah
So the reason I ask this is because I mean having been to your R&D setup, I can — I can definitely say it is one of the state-of-the-art facilities and in no means, you know, it’s definitely something your customers have appreciated as well. So I’m just trying to gauge why in the down-cycle as well, we’re trying to — perhaps we are struggling to pull more business, A, then our competitors are also pulling business, maybe not at the same page, but they definitely are.
Balram Singh Yadav
Yeah. So as far as we are concerned, I can talk about ourselves. I must say that considering the global situation, I think the response from lot of these innovators are also subdued. And you must-have heard that some of the big companies had also banned travel there, that et-cetera. So I’m saying lot of other things also resulted in these delays. But having said that, I must say that now we have upped the efforts to probably connect with more customers, particularly in Europe. We are working with some consultants who have been in this business for a long-time for opening doors for us and get us new business. I am yet to see any results because it has been fairly recent. But I’m very sure if the markets improve, we will definitely be with our kind of assets, manpower assets as well as physical assets. We will be a — we will be in consideration, I’m sure for CDMO project for these big companies.
Pinkesh Shah
Right., but in terms of the talent pool, perhaps that has exited and maybe we have not replenished that. Don’t you think that could be an impediment to opening whole has been replenished.
Balram Singh Yadav
So there is no problem. I think there’s lot of things in pipeline also. So I think we are preparing for a higher workload for projects next year and I’m very sure that will not be a limitation for us.
Pinkesh Shah
Because it’s — and sir, in terms of the enterprise business now that it is the updates that our two important contributors are largely the pricing is in a range. So in terms of being able to reject them via earlier plant modification, sir what is — has there anything progressed on that.
Balram Singh Yadav
For enterprise, have you made any plant modifications, etc? No, they are not needed, man. Not needed.
Pinkesh Shah
All right, sir. That’s all from my side.
Operator
Thank you. The last question is from the line of Aejas Lakhani from Unifi. Please go-ahead.
Aejas Lakhani
Yeah, hello. Hello. Yes, sir. Go-ahead. Yeah, yeah. Sir, thanks again for the opportunity. Just two more follow-ups. One is, sir, do you have any visibility of when the GCPL, you know pet food products business is likely to commence and what progress have we made on — if you’ve made anything in that front.
Pinkesh Shah
So I can tell you about the second question, okay. So I think the pilot plant, etc and whatever our responsibility was of the pilot plant, I think it will be ready in a few weeks’ time where most of the experiments can be done and lot of production for marketing trials can be taken. The — the full-fledged 35,000 to 40,000 tonnes per annum plant will only come towards the end of FY ’26. Okay. Okay. So basically, sir, we had been asked by them to make a pilot plant and so that they can curtail — they can start their R&D experiments and we have done our bit and handed over to them. So then the next one year will go into a testing phase. No, no, no, I don’t know about that.
Balram Singh Yadav
I think whatever their schedule I cannot talk about, I think GCPL is the best and is in the best position to talk about it. But point is that my short answer is that we are ready with the initial infrastructure and we will be ready with the final infrastructure in a year’s time.
Pinkesh Shah
Okay. Okay. You’ll be ready with the final infrastructure one year from now. Okay, okay. And sir, just wanted to understand that what is our capex expectation for entire FY ’26 and what is the capex outlay that we have done for nine months and what is the pending amount in the last quarter?
Balram Singh Yadav
INR161 crores of capex has been done by consolidated in the first-nine months, we’ll end-up at about INR220 crores or so and we have similar capex plan for next year.
Pinkesh Shah
Okay, okay. And just one last bit, sir. I’ll — I’ll come back to you, sir. Let me just articulate my question. Oh, done, sir. Thank you. Thank you for your time.
Balram Singh Yadav
Yeah. Thank you.
Operator
Thank you. As that was the last question for the day. I now hand the conference over to Mr Godrich for closing comments. Over to you, sir.
Nadir Godrej
Thank you. I hope we have been able to answer all your questions. If you have any further questions or would like to know more about the company, we will be happy to be of assistant. Stay safe and stay healthy. Thank you once again for taking the time to join us on this call.
Pinkesh Shah
[Operator Closing Remarks]