Dear Shareholders,

I am delighted to share with you the events and developments of your Company during course of financial year 2016-17. The overall performance of your Company has witnessed a healthy growth in profits with consolidated Net Profit increasing by 59%. We continued to do well in most of our core businesses. The year gone is representative of the value Godrej Industries continues to create for all its stakeholders.

As a conglomerate with diverse business interest, growth at consolidated level is pursued through competitively growing your Company’s core businesses, building an environment to achieve transformation while also nurturing and investing in emergent businesses of the future.

This approach of your Company’s business strategy is captured in the approach called CREATE which stands for:

C - Consumer and Chemicals Consumer (GCPL)

Godrej Consumer Products Ltd is a leading emerging markets company. In FY2017 GCPL delivered another year of competitive and profitable growth. Despite some category and geography specific challenges, GCPL has delivered good sales growth, which is a reflection of its clear strategic portfolio choices, backed by strong execution. Moreover, GCPL also delivered robust operating profits across businesses, while investing in its brands and in innovations. On a consolidated basis, GCPL reported 58% growth in its Net Profit at Rs, 1,304 crore as compared to Rs, 828 crore of the previous year.

One of GCPL''''s most important imperatives is to extend leadership in our core categories - home care, personal wash and hair care. We remain focused on delivering superior ahead of the market growth, driving consumption and penetration in our core categories, as well as extending into attractive adjacencies. The strategic pillars of GCPL is to sustain leadership position in its core categories, strengthen presence in emerging categories, drive growth in international business, accelerate the pace of innovation, strengthen brand portfolio, create a future ready sales organization, build a global best-in-class supply chain and continue to execute different initiatives to foster an agile and high performance culture. I am pleased to share that GCPL was ranked the number 1 FMCG company to work for in ‘Great Place to Work - Best Workplaces in India 2016'''' list; its thirteenth consecutive year on the list. It was also ranked number 12 on the ‘Great Place to Work - Best Workplaces in Asia 2017'''' list and ranked among the top 19 ‘Aon Hewitt Best Employers in India - 2017’ survey.

GCPL remains focused on its 3x3 strategy of building a presence in 3 emerging markets (Asia, Africa and Latin America) across 3 categories (home care, personal wash and hair care). This, we believe, will provide us immense opportunities across all our geographies and categories. GCPL will continue to invest competitively in its brands and enhance go-to-market infrastructure. We remain excited about the enormous growth potential in India and other emerging market, given low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results in the future.


Our Chemicals business recorded a growth of 17% in revenue in FY2016-17. The chemicals business continued its strong focus on cost control and energy efficiencies. This coupled with a strategic approach to front-end sales contributed to the good performance across product categories.

I am happy to share that our Chemicals business has received the prestigious ‘Award of Excellency'''' from Chemexcil (an industry council setup by the Ministry of Commerce and Industry) for its outstanding export performance. I am also happy to share that our Valia plant was awarded the ‘Energy Efficient Unit'''' for a second time in a row at CII National Awards for Excellence in Energy Management 2016. Additionally, the plant also won the ‘Innovative Project'''' award for their consistent effort in introducing new energy efficiency technologies. Further to share with you, your company''''s managing director Mr. Nadir Godrej was honored with CHEMTECH leadership & excellence award 2017- Hall of Fame.

R E - Real Estate (GPL)

FY2016-17 has been a strong year for business development, GPL added 7 new projects with a saleable area of 18 million sq.ft. GPL entered the Noida market and sold more than 1 million sq.ft. despite weak market conditions. GPL’s new launches received an encouraging response despite weak market conditions. Total booking volume registered for FY2016-17 stood at 3.1 million sq. ft. and booking value of '''' 2,020 Cr. GPL’s Total Income stood at Rs, 1,733 crore. EBITDA increased by 42% to Rs, 401 crore and Net Profit increased by 30% to Rs, 207 crore. Strong profit growth was contributed by our flagship project ‘The Trees'''' which attainted revenue recognition much ahead of schedule.

In FY2016-17 GPL delivered 4.6 million sq.ft, which includes 3.3 million sq.ft of residential and 1.3 million square feet of commercial space across four cities.

I am happy to share with you that GPL was ranked 2nd in Asia & 5th globally by GRESB (Global Real Estate Sustainability Benchmark) - An industry-driven organization which assesses Environmental, Social and Governance (ESG) performance of real estate assets globally

As you know, the sector is going through a significant transition at the moment. The process of consolidation that was already underway will now gather pace with both demonetization and more importantly, the Real Estate Regulatory Act. While these reforms may create some short-term uncertainty and delay, they will eventually help improve governance standards in the sector thereby improving consumer confidence and real estate demand. The government has put in place many policy reforms to encourage real estate development, especially in the affordable housing space, and we believe these reforms will lead to sustained improvements in the sector. We expect 2017 to be a transition year but the years ahead are likely to be very exciting ones for the sector. We believe our brand, national presence, demonstrated track record, and capabilities put us in a strong position to disproportionately benefit from any improvement in the environment and will allow us to remain on a high growth trajectory in the years ahead.

A - Agri Business (GAVL)

A normal monsoon after two back to back poor monsoons provided much needed boost to the agrl sector. GAVL was also positively impacted by these conditions as evident in our financial performance. In FY2016-17 GAVL recorded consolidated revenue of Rs, 4,985 crore as against Rs, 3,819 crore, a growth of 31% over the previous year. Profit Before Tax for the year grew by 12% to Rs, 375 crore as compared to Rs, 335 crore in FY2015-16.

The company successfully integrated Astec Life Sciences Ltd. (Astec) and Creamline Dairy Products Limited (Creamline), with FY2016-17 financials reflecting the full year performance of these two companies. We continue our focus on operational efficiencies, R&D initiatives and building a strong relationship with our customers especially the farmers. The Animal feeds vertical had a steady performance in FY2016-17 despite headwinds in few categories, its revenue for FY2016-17 grew by 3% as compared to FY2015-16.

GAVL’s joint venture in Bangladesh (ACI Godrej) recorded a sales growth of 13% in FY2016-17. The business continues to consolidate and grow its market share in the categories of Feed. The Oil Palm vertical business recoded a sales of Rs, 507 crore a growth of 25% over the previous financial year. Remunerative prices of Fresh Fruit Bunches (FFB) for the farmers helped in bringing sizeable area under Oil Palm this year. Good south west monsoons during the year helped the crop protection business to clock a growth of 54% in sales as compared to the previous year. The business continues to focus on building synergies with Astec Life Sciences Ltd.

Astec Life Sciences Ltd a subsidiary of GAVL recorded a Total Income of Rs, 316 crore in FY2016-17 a growth of 24% over FY2015-16. The sales growth was driven by growth in both domestic and export sales.

Creamline Dairy Products Ltd. (CDPL), another subsidiary of GAVL had a robust year, with revenues growing by 9% as compared to the previous year. CDPL is focusing on value added products that has started yielding results, the sales of the products portfolio increased by 24% in FY2016-17 as compared to FY16.

In the poultry segment sales in FY2016-17 remained flat as compared to FY2015-16. Our strategy will continue to remain focus on building a brand based business under the ‘Real Good Chicken’ and ‘Yummiez’ brands.

Overall, the future prospect of GAVL remains robust and I am confident that we will continue to deliver industry outperforming results in the coming years.

T - Transformation

As a Group, your Company believes in inclusive growth that aims at enhancing the competitiveness of the businesses while simultaneously advancing the economic and social conditions of the communities in which it operates. This focus is implemented Group wide through the ‘Godrej Good and Green’ initiative.

As part of Good & Green, the Group, by 2020, aspires to create a more employable Indian workforce, a greener India and innovate for products that are greener or cater to the bottom of the income pyramid. The Group has made good progress on each of these objectives during the last fiscal year. Through employability programs in beautician training, channel sales, rural entrepreneurship and animal husbandry, the Group has been able to train and empower thousands of unemployed or underemployed youth in the last year.

E - Emergent Businesses

Over the last few years, your Company has incubated new businesses and grown them successfully. The emergent business in your Company’s portfolio viz. Nature''''s Basket is scaling up well.

Natures Basket (NBL), the gourmet food retailing business, is one such business where your Company sees immense growth potential given low penetration levels and growing addressable market. NBL is now spread across 3 key metros in India through 26 outlets. During the year, the Company has set up a Supply Chain Function to improve overall availability and inventory management, and use of technology for improving in store processes. NBL recorded a 15% increase in sales in FY2016-17. I am pleased to share that NBL was recognized at multiple retail forums like Food & Grocery forum, Franchise India Retail Award for Omni Chanel performance, TRRAIN awards for Customer service etc.

To conclude, we have had a reasonably good year.

We remain encouraged and confident of achieving our long term objectives of inclusive, sustainable and profitable growth. As we look ahead, I feel confident of strong growth in the medium to long term. Post the demonetization of currency, the demand has improved in India. We are now getting back to the recovery seen during the pre-demonetization period.

We look forward to the GST implementation, which I believe will be transformative for the Indian economy and will significantly boost consumption and GDP growth. It will also create a level playing field for the organized players by bringing the tax evaders under compliance.

I am confident that our disciplined strategy, prudent approach, focus on agile execution and our committed team will enable us to improve performance further and create greater shareholder value.

I would like to take this opportunity to thank all our employees for their contribution in the continued success of Godrej Industries. I would also like to extend my gratitude towards our business partners, associates, vendors and also the Central, State governments and government agencies for their sustained support. I would also like to express my sincere appreciation to all of our shareholders for your continued faith, trust, encouragement and support.

Yours sincerely,

Adi Godrej

Chairman, Godrej Industries Ltd.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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