Detailed Narrative
Q1 FY27 Consolidated Performance Overview
Avanti Feeds Limited reported a consolidated gross income of INR 1,966 crores for Q1 FY27, representing a 30% increase QoQ from INR 1,516 crores in Q4 FY26 and a 19% increase YoY from INR 1,657 crores in Q1 FY26. However, consolidated PBT declined by 15% QoQ to INR 157 crores from INR 184 crores, and by 37% YoY from INR 249 crores, primarily due to the net impact of various factors including increased expenditure.
Feed Division Performance and Margin Compression
The Feed division's gross income for Q1 FY27 was INR 1,615 crores, a significant 51% QoQ increase from INR 1,069 crores, driven by a 70,126 MT increase in feed sold. YoY, gross income grew 27% from INR 1,279 crores. Despite strong revenue, the PBT for the feed division decreased by 18% QoQ to INR 114 crores and 45% YoY, with the PBT margin compressing to 7.06% from 17% in Q1 FY26, mainly due to rising raw material prices.
Raw Material Price Inflation and Pricing Strategy
Key raw materials like fish meal and soya bean meal experienced steep price increases. Fish meal rose from INR 93 per kg in Q1 FY26 to INR 153 per kg in Q1 FY27, and soya bean meal from INR 40 per kg to INR 58 per kg. To counter this, the company implemented a 10% price hike for feed on June 19, 2026. Management is actively collaborating with the government and industry stakeholders to devise a balanced pricing strategy that ensures farmer affordability and industry sustainability amidst these cost pressures.
Shrimp Processing and Export Division Dynamics
The Shrimp Processing and Export division recorded a gross income of INR 350 crores in Q1 FY27, a 22% QoQ decrease from INR 446 crores and a 7% YoY decrease from INR 378 crores, primarily due to a 15-16% reduction in sales volume. Despite the volume decline, PBT for the division increased significantly by 80% YoY to INR 45 crores (from INR 25 crores in Q1 FY26), driven by improved average selling price realization, favorable foreign exchange rates, and higher other income.
Pet Food Project Update and Expansion
The Avant Furst pet food brand continues its growth trajectory, with Q1 FY26/27 sales reaching INR 180 lakh, up 19.2% from INR 151 lakhs in Q4 FY25/26. The company is expanding its market presence in Tier 1, 2, and 3 cities and strengthening its digital marketing efforts. Plans are underway for a new state-of-the-art pet food manufacturing facility near Hyderabad, with an estimated investment of INR 175 crores, of which INR 25 crores has been spent on land acquisition, and regulatory approvals are currently in process.
Industry Outlook and Government Support
The aquaculture industry is facing a challenging FY26/27 due to steep increases in feed raw material prices and global demand uncertainties. Management expressed optimism that favorable monsoons and easing El Nino effects could stabilize raw material prices in the coming months⏳. The company is actively engaging with state and central governments, along with other stakeholders, to explore policy interventions and long-term solutions for the sustainable growth of the shrimp industry.
US Reciprocal Tax Refund Status
A potential reciprocal tax refund from the U.S., estimated at USD 15-20 million, remains in a pending status. The U.S. Customs and Border Protection (CBP) has indicated that it will not process these tariffs until the suspension of Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) reviews for the Indian seafood industry is lifted. The company has declared the entry as advised by legal counsel, but the processing is on hold.