Avanti Feeds reported a 37% decline in consolidated profit to Rs 157 crore for Q1 FY27, despite a 19% rise in revenue to Rs 1,966 crore. Margins were hit by surging costs of raw materials like fish meal and soya bean meal, prompting the company to implement a 10% price hike in its feed segment.
Avanti Feeds Q1 Profit Dips 37% Amid Raw Material Headwinds
Consolidated Profit Before Tax: Rs 157 crore | Consolidated Gross Income: Rs 1,966 crore
Reader Takeaway: Strong feed sales volume growth is currently offset by significant margin pressure from rising raw material costs.
What just happened
Avanti Feeds reported a consolidated gross income of Rs 1,966 crore for Q1 FY27, marking a 19% increase compared to the same period last year. However, profitability took a hit as Profit Before Tax (PBT) fell to Rs 157 crore, down 37% from Rs 249 crore in Q1 FY26. The PBT margin on revenue contracted to 7.06%, compared to 17% in the year-ago quarter.
Why this matters
The company is grappling with a "paradoxical" market environment. While sales volume in the feed division grew significantly to 1,93,852 MT—a 57% jump over the previous quarter—the profitability of these sales was eroded by a sharp spike in the prices of key inputs including fish meal, soya bean meal, and wheat flour. To mitigate this, management implemented a 10% price hike in June.
Shrimp Processing and Pet Food
The Shrimp Processing and Export division saw revenue decline to Rs 350 crore, a 7% drop year-on-year, driven by a 15-16% decrease in sales volume. Despite the revenue dip, this segment improved its PBT to Rs 45 crore through better operational efficiency. Meanwhile, the company is advancing its Pet Food expansion, having utilized Rs 25 crore of the planned Rs 175 crore capital expenditure for a new facility.
Risks to watch
Investors should closely track the ongoing volatility in raw material prices, which management identifies as the single largest concern for the sector. Additionally, the resolution of U.S. Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) review suspensions remains a critical uncertainty for the export segment.
What to track next
Management remains cautious, warning of a challenging season due to feed cost pressures and global demand fluctuations. The progress on the new pet food manufacturing plant and any government interventions regarding feed pricing mechanisms will be key areas for shareholder focus in upcoming quarters.