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BW Businessworld

Heavyweight Rank 3: Sustaining Growth

Gokul Agro is today one of India's prime processers and manufacturers of various edible and non-edible oil and allied products

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There is a bit of Gokul Agro Resources (GARL) in every Indian’s kitchen. Incorporated in 2014, Gokul Agro is today one of India's prime processers and manufacturers of various edible and non-edible oil and allied products. Its product range consists of all the major edible oil consumed globally. In the non-edible segment, it is one of the largest producers of castor oil in the country. 

GARL also caters to the feed meal industry of the world by supplying them its high quality meal of soybean. At its castor producing unit it produces high quality castor meal which is an organic fertiliser by itself. With a wide range of customers of diverse and multicultural beliefs, GARL is present in more than 20 states of the country. GARL also caters to a large customer base across the world in more than 35 countries across continents.

During the period under review (FY18-FY22), GARL put in an impressive showing, with its income and profit-after-tax (PAT) recording nearly 20 per cent CAGR and 67 per cent CAGR respectively. These numbers propelled GARL to the third spot in the Heavyweight category of BW Businessworld's Fastest Growing Companies study. 

GARL's net profit rose 175 per cent to Rs 122.91 crore in the year ended March 2022 as against Rs 44.69 crore during the previous fiscal. The company's sales increased 24 per cent to Rs 10,391 crore FY22 as against Rs 8,374.44 crore during the previous fiscal year.

What is working for the company is the consistent rise in the per capita consumption of edible oil due to a host of factors including growing population, changing lifestyles, increasing urbanisation, rising income levels, improvement in standard of living, and swelling ranks of the middle class. "The global demand for our products continues to improve as economies gradually regain their growth momentum. In the backdrop of such a scenario, the diversity of our brands, esteemed national and international clients, best-in-class manufacturing facilities, strong distribution footprint and robust balance sheet will enable us to sustain our growth momentum in the coming years," said Kanubhai J. Thakkar, Chairman and Managing Director of GARL in his address to the shareholders.

Recent Challenges 

Amidst the challenges, international prices for edible oil came under pressure for a major part of the fiscal year under review. A shortfall in global production and increase in export levies by exporting countries were major reasons for volatility in prices. Further, Indonesia’s ban on the export of palm oil in May 2022 was one of the major steps in crop protectionism since Russia’s invasion of Ukraine in February 2022, and it curtailed export of sunflower oil and worsened the already existing global shortage. 

"However, India’s imports of vegetable oil have been on a decline in the last three years. Favourable regulatory policies for multiple industries, including vegetable oil and ancillary products, are pushing the country towards ‘Atmanirbharta’ or self-reliance," said Thakkar. But, as the consumption of vegetable oil continues to outpace production, imports are expected to play a critical role in bridging the demand in the near term, he added. 

"We are increasing our wallet share with leading FMCG companies for our B2B business, and growing the market presence of our branded products in direct consumer space," Thakkar said. GARL’s client list boasts marquee names such as Parle, Britannia, ITC, Amul, Asian Paints, Berger, Godrej and Nirma, among others. 

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Magazine 8 October 2022