Godrej Agrovet shares surged over 12% on Tuesday, September 1, marking the second consecutive session of gains after Kotak Institutional Equities highlighted the company's oil palm business as a potential hidden gem. The stock rose as much as 12% intraday, with shares trading at ₹670 compared to the previous day's closing price of ₹615. The sharp move came after Kotak Institutional Equities analysts Abhijit Akella and Chaitanya Sawhney raised the fair value to ₹1,010, from ₹850, while retaining the 'Buy' rating. This represents a 19% increase in the target price from the previous target issued on July 8, 2026, with the new rating projecting a 64.22% upside potential.
Kotak highlighted that Godrej Agrovet's oil palm business could become a major value driver for the company, with the segment clocked ₹430 crore in EBITDA in FY26 and is expected to conservatively exceed ₹1,000 crore by FY31. The brokerage believes the segment's long growth runway, stable margins and high return on capital employed (RoCE) warrant attractive valuations. The oil palm business alone could potentially be worth more than Godrej Agrovet's current market capitalisation of ₹12,872.32 crore. Kotak emphasised that the palm oil business is enjoying the status of a local monopoly, with the brokerage raising the EBITDA multiple to 18x from 15x. The company expects revenue to hit ₹4,500 crore by FY31 with margins of over 23%, with growth likely to remain solid at least until 2040.
In the first quarter of FY27, Godrej Agrovet delivered mixed financial results with revenue growth offsetting profit decline. Consolidated net profit fell 13.8% year-on-year to ₹128.3 crore for the quarter ended June 30, 2026, down from ₹149 crore in the corresponding quarter last year. However, revenue from operations rose 9.2% year-on-year to ₹2,855.2 crore from ₹2,614.3 crore a year earlier, indicating steady growth in business operations. EBITDA declined 10.9% year-on-year to ₹240.1 crore from ₹269.6 crore in the year-ago period, with EBITDA margin contracting to 8.41% from 10.32% a year earlier. The company's shares have gained 22.42% over the past month and are currently trading 9.08% below the 52-week high of ₹760.00.
India's National Mission on Edible Oils-Oil Palm (NMEO-OP) targets increasing the country's oil palm area to 2.8 million hectares, compared with around 0.6 million hectares currently. India has a sizeable palm oil import bill of around $10 billion annually, while domestic production remains negligible at around 0.5 million tonnes per annum against consumption of 7-8 million tonnes. Industry-wide area additions accelerated to 84,000 hectares in FY26, compared with 21,000 hectares in FY22. This gives Godrej Agrovet confidence that its own oil palm area could nearly double to 150,000 hectares by 2031, from around 80,000 hectares currently, with the company having an existing allotment of more than 230,000 hectares.
Apart from Kotak, 5 other analysts cover the stock and all 5 recommend a 'Buy' rating, indicating strong consensus among brokerages. The stock has risen for the second straight session and has closed in the green on only 4 out of the past 10 sessions. The shares are trading 36.53% above the 52-week low of ₹506.10, with the current stock price at ₹670 per share. Kotak analyst Abhijit Akella noted that Godrej Agrovet is a stock he finds interesting, with valuations having fallen sharply over the past few years even as the underlying business mix has improved. The BSE Sensex was largely flat with a negative bias during the trading session.
