Avanti Feeds Q1FY27 net profit falls 37% to ₹1,163 crore on input costs
- Consolidated revenue rose 18.3% YoY to ₹18,999 crore, but net profit fell 37.4% to ₹1,163 crore
- Shrimp feed volumes grew 17% to 193,852 MT, yet PBT margin narrowed to 5.3% from 18.1%
- Fish meal prices surged to ₹153/kg avg consumption cost; soya bean meal hit ₹58/kg
- Processing division PBT stabilized at ₹45 crore despite 15% volume drop due to better ASPs
- Pet food sales grew to ₹180 lakh; new plant investment estimated at ₹175 crore
*this image is generated using AI for illustrative purposes only.
Avanti Feeds reported a significant divergence between top-line growth and profitability in its Q1FY27 results. Consolidated revenues rose 18.3% year-on-year to ₹18,999 crore, driven by strong volume expansion in the shrimp feed segment. However, net profit after tax (PAT) declined 37.4% to ₹1,163 crore, reflecting pressure from elevated raw material costs that compressed operating margins.
Financial Performance
The company’s consolidated EBITDA contracted 35.2% to ₹1,716 crore, with margins slipping 750 basis points to 9.0%. This margin compression occurred despite an 18.3% increase in revenue, indicating that cost inflation outpaced pricing power or volume gains in the aggregate.
| Metric | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Revenue | ₹18,999 crore | ₹16,064 crore | +18.3% |
| EBITDA | ₹1,716 crore | ₹2,653 crore | -35.2% |
| EBITDA Margin | 9.0% | 16.5% | -750 bps |
| Net Profit | ₹1,163 crore | ₹1,857 crore | -37.4% |
Segment Dynamics
Shrimp feed revenues grew 26.8% to ₹15,662 crore, supported by sales volumes reaching 193,852 metric tonnes, up from 165,564 metric tonnes in Q1FY26. Despite this volume surge, the segment’s PBT margin narrowed to 5.3% from 18.1% in the prior year quarter, directly attributed to rising input prices.
Conversely, the shrimp processing segment saw revenues decline 10.1% to ₹3,337 crore, driven by a 17% drop in sales volumes to 3,520 metric tonnes. However, the processing unit demonstrated resilience in profitability, with EBITDA margins improving to 16.0% from 9.1% in Q1FY26. This improvement was aided by favorable foreign exchange movements and better average selling price realizations.
Management Commentary & Raw Material Costs
During the earnings call held on August 27, 2026, management highlighted that the average consumption price of fish meal increased to ₹153 per kg in Q1FY27 from ₹123 per kg in Q4FY26 and ₹93 per kg in Q1FY26. Similarly, soya bean meal prices rose to ₹58 per kg from ₹49 per kg in Q4FY26 and ₹40 per kg in Q1FY26. In contrast, wheat flour prices decreased to ₹28 per kg.
Current purchase prices stand at ₹225 per kg for fish meal, ₹71 per kg for soya bean meal, and ₹33 per kg for wheat flour. Management noted that while a ~10% price hike was implemented in June 2026, further increases are being carefully evaluated in consultation with farmers and the Andhra Pradesh government to ensure affordability. A government committee involving big-four consultants is currently working on mechanisms to monitor abnormal price increases in essential feed raw materials.
Export & PetCare Updates
The shrimp processing division’s gross income fell 22% quarter-on-quarter to ₹350 crore due to a 15% drop in sales volume. However, profit before tax (PBT) before exceptional items remained stable at ₹45 crore compared to ₹48 crore in Q4FY26, thanks to improved operational efficiency and better average selling price realizations. Exports to the US declined 17.9% YoY, while exports to China, EU, and Japan grew by 24%, 36%, and 5% respectively.
In the pet food segment under the Avant Furst brand, sales increased to ₹180 lakh in Q1FY27 from ₹151 lakh in Q4FY26. The company has purchased land worth ₹25 crore near Hyderabad for a new manufacturing facility, with an estimated total investment of ₹175 crore. Construction will commence upon receipt of regulatory approvals.
What the Numbers Show
A critical observation is the decoupling of operational scale from profitability in the core feed business. While shrimp feed sales volumes increased by approximately 17% (from 165,564 MT to 193,852 MT), the segment’s contribution to overall profit efficiency eroded sharply. The 750 basis point contraction in blended EBITDA margins suggests that raw material cost pass-through mechanisms may be lagging behind input price hikes, creating a temporary squeeze on operating leverage despite strong demand execution.
Balance Sheet Position
As of June 30, 2026, Avanti Feeds maintained a robust balance sheet with total assets at ₹42,604 crore. The company’s net debt-to-equity ratio remained negligible at 0.01x, providing financial flexibility. Return on capital employed (RoCE) stood at 22.30% for FY26, while return on equity (RoE) was recorded at 19.09%, indicating efficient capital utilization despite the quarterly margin pressures.
Historical Stock Returns for Avanti Feeds
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.47% | -5.01% | -11.55% | -37.76% | +5.64% | +39.72% |
How might the government committee's intervention in monitoring feed raw material prices impact Avanti Feeds' ability to pass on future cost increases to farmers?
Given the 750 bps margin compression, what specific pricing strategies or product mix adjustments is management considering for Q2FY27 to restore EBITDA margins?
Will the diversification into the PetCare segment and the new Hyderabad facility significantly offset the volatility in the core shrimp feed business within the next 2-3 years?
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