Avanti Feeds Limited
Q1 FY26
Call date · August 29, 2025
1 · Management Commentary
Key Positives
- Consolidated gross income for Q1 FY26 increased 15.7% QoQ to INR 1,657 crore and 7.7% YoY.
- PBT rose 18% QoQ to INR 249 crore and 38% YoY.
- Feed division saw improved profitability due to higher sales and lower raw material costs.
- Shrimp processing division gross income up 56% YoY; sales volume up 1,440 MT YoY.
- Pet food business (Avanti Furst) expanded product range and geographic reach, with positive initial response.
Key Negatives
- U.S. imposed a 50% reciprocal tariff on Indian shrimp exports effective August 27, 2025, creating significant headwinds.
- Raw material prices (fish meal, soybean meal, wheat flour) have started rising after a period of stability.
- Unseasonal heavy rains and disease outbreaks temporarily slowed aquaculture activity.
- Uncertainty in global demand and export volumes due to trade policy volatility.
Forward Guidance
- Capex: Pet food manufacturing facility (30 acres near Hyderabad) construction to commence by end-2025; fish feed manufacturing contingent on successful trials.
- New products: Expanded cat food (Tuna flavor) and launched dog food (chicken & vegetable); e-commerce and quick commerce launches planned.
- Client wins/losses: Actively diversifying export markets beyond U.S. (Japan, Europe, Canada, Middle East); focus on domestic shrimp market.
- Revenue/margin outlook: FY26 feed sales estimated at ~5,60,000 MT; shrimp exports at ~17,000 MT; margins expected to normalize if raw material prices stabilize.
- Strategic initiatives: Pause on shrimp processing expansion; focus on R&D and maintenance; government engagement for industry support.
2 · Q&A Highlights
Q 1 (Composite): What is the expected impact of the 50% U.S. tariff on shrimp exports and company performance?
A (Management):
• Immediate impact is less than anticipated as supply chains adjust; long-term impact could be significant if tariffs persist.
• Actively diversifying to other export markets and focusing on domestic sales.
• Feed business largely domestic (99%); processing business more exposed to U.S. market.
Q 2 (Composite): Are tariffs being passed on to customers, and what is the effect on margins and sales?
A (Management):
• 50% tariff cannot be absorbed—passed on to customers where possible; customers averaging purchases across origins.
• Margins expected to remain stable in near term; longer-term impact depends on duration of tariffs and market adjustments.
Q 3 (Composite): What is the outlook for feed and shrimp production volumes given weather and market volatility?
A (Management):
• FY26 feed sales guidance maintained at ~5.6 lakh MT; shrimp exports at 17,000 MT.
• Production recovering after weather-related setbacks; confident in achieving targets barring prolonged trade disruptions.
Q 4 (Composite): What are the plans and targets for the pet food and fish feed businesses?
A (Management):
• Pet food sales target of INR 10 crore for FY26; plant construction to start end-2025, operational in ~1.5 years.
• Fish feed manufacturing contingent on successful trials; Capex to be finalized next quarter.
Q 5 (Composite): Is there any expansion planned in shrimp processing or other segments?
A (Management):
• Shrimp processing expansion on hold due to tariff uncertainty; will revisit once trade environment stabilizes.
• Focus on maintenance and R&D during this period.
Q 6 (Composite): How is the company managing raw material price volatility and its impact on margins?
A (Management):
• Raw material prices are volatile and driven by agri/fish catch cycles; margins will depend on stabilization of these inputs.
• Recent INR 4/kg feed price cut in April; no further cuts planned unless warranted by market conditions.
Q 7 (Composite): What is the status of export incentives and roster/PLI benefits?
A (Management):
• No long-term listing or significant incentives currently; specific numbers to be provided on request via email.
3 · Other Key Numbers
- Consolidated gross income Q1 FY26: INR 1,657 crore
- Consolidated PBT Q1 FY26: INR 249 crore
- Feed division gross income Q1 FY26: INR 1,279 crore
- Feed sales Q1 FY26: 1,65,564 MT (Q4 FY25: 1,29,711 MT; Q1 FY25: 1,58,591 MT)
- Feed sales FY25: 5,55,247 MT (FY24: 5,31,967 MT)
- Feed sales FY26 (guidance): ~5,60,000 MT
- Shrimp processing gross income Q1 FY26: INR 378 crore (Q1 FY25: INR 243 crore)
- Shrimp processing sales volume Q1 FY26: 4,223 MT (Q1 FY25: 2,783 MT)
- Shrimp exports FY25: 14,149 MT (FY24: 13,444 MT); FY26 guidance: ~17,000 MT
- India's shrimp exports FY25: 7,45,520 MT, revenue $5.17 billion
- Pet food sales Q1 FY26: INR 38.17 lakh (Q4 FY25: INR 25.79 lakh)
- Pet food sales target FY26: INR 10 crore
- Raw material prices Q1 FY26:
- Fish meal: INR 93/kg (Q4 FY25: INR 91/kg; Q1 FY25: INR 117/kg)
- Soybean meal: INR 39/kg (Q4 FY25: INR 40/kg; Q1 FY25: INR 49/kg)
- Wheat flour: INR 31/kg (Q4 FY25: INR 36/kg; Q1 FY25: INR 28/kg)
- Current (as of call) raw material prices:
- Fish meal: INR 105/kg
- Soybean meal: INR 47/kg
- Wheat flour: INR 35/kg
- U.S. reciprocal tariff rates: 10% before Sep 17, 2025; 35% Sep 17–Oct 5; 50% after Oct 5
- Additional CVD on exports: 5.77%
- Pet food plant: 30 acres land acquired near Hyderabad; construction to start end-2025
- No rerouting of shipments; company policy prohibits illegal practices
All figures as stated in the call. If not disclosed, marked as such.