India's Godrej Agrovet posts drop in Q3 profit on lower demand

BENGALURU (Reuters) -India's Godrej Agrovet reported a 21% fall in third-quarter profit on Thursday, hurt by soft demand and inventory destocking.

Consolidated net profit fell to 918.4 million rupees ($11.1 million) for the three months ended Dec. 31 from 1.16 billion rupees a year earlier, the company said in an exchange filing.

The company's overall inventory levels have fallen 15.5% due to the ongoing destocking across the sector, according to analysts. This in turn affected the bottom line of the company.

Total expenses for the quarter rose 0.23%, while total revenue was flat at 23.45 billion rupees.

The company's agrochemical unit - Astec LifeSciences, has been facing extremely challenging external market conditions which have severely impacted its topline and margin performance, B.S. Yadav, Managing Director at Godrej Agrovet said in a statement.

Astec LifeSciences faced challenges in selling its enterprise products due to an excess of inventory in key markets, affecting both pricing and demand for these products, the company added.

The animal feed segment, which constitutes more than half of the total revenue, rose 1.5% year-on-year.

Godrej Agrovet's core profit margins for the quarter contracted to 7.3% from 9.2% a year earlier.

Shares of the company rose 1.9% on Thursday ahead of the results.

($1 = 82.9800 Indian rupees)

(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Sohini Goswami and Mrigank Dhaniwala)