Avanti Feeds Limited — Q1 FY26 earnings call

Call held 29 Aug 2025

Management summary

Avanti Feeds reported strong Q1 FY26 results with significant growth in consolidated gross income and PBT, driven by increased feed sales volume and shrimp processing revenue. The company is actively expanding its Pet Care segment and diversifying export markets to mitigate the impact of the newly imposed 50% US reciprocal tariffs on shrimp. Raw material price volatility and temporary slowdowns in aquaculture due to weather remain key watch areas.

Highlights

  • Consolidated Gross Income for Q1 FY26 increased by 15.7% QoQ to INR 1,657 crore.

  • Consolidated PBT for Q1 FY26 increased by 38% YoY to INR 249 crore.

  • Feed sales volume for Q1 FY26 increased to 1,65,564 metric tons from 1,29,711 metric tons in Q4 FY25.

  • Shrimp Processing division's gross income grew by 56% YoY to INR 378 crore in Q1 FY26.

  • Pet Care project recorded sales of INR 38.17 lakh in Q1 FY26, showing steady growth from INR 25.79 lakh in Q4 FY25.

Concerns

  • The US reciprocal tariff of 50% on shrimp exports, effective August 27, is a significant challenge, potentially impacting the company's processing division which derives over 60% of its revenue from the US market.

  • Raw material prices for fish meal, soybean meal, and wheat flour have shown recent increases and volatility, which could impact profitability.

  • Aquaculture activity temporarily slowed due to heavy rains, premature harvest, and diseases in the current quarter.

Key financials

  1. Consolidated Gross Income ₹1,657 Cr +7.7%YoY
  2. Consolidated PBT ₹249 Cr +38.3%YoY

What they filed

Q1 FY27: revenue up 26.7%, net profit down 49.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,079 1,042 1,032 1,235 1,156 +7%945 −9%1,039 +1%1,565 +27%
EBITDA113 142 166 188 145 +28%134 −6%129 −22%71 −62%
Net profit106 127 144 167 135 +27%129 +2%107 −26%84 −50%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentGross IncomePBT
Feed Division (Standalone)₹1,279 Cr₹224 Cr
Shrimp Processing Division₹378 Cr₹25 Cr
Pet Care Project——

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Pet Care manufacturing facility near Hyderabad
    • Fish feed manufacturing facility (if trials successful)
    As you know, company has purchased and converted from agriculture to non-agriculture approximately 30 acres of land near Hyderabad through proposed state-of-art manufacturing facility. And present survey and land development for construction is in progress. The company is planning to commence the construction by end of this year after obtaining necessary government approvals. This is about the update of Pet Care. The fish feed, as we told you, the trials are going on. And if we find a suitable feed appropriate for Indian fish culture then we'll be able to set up the manufacturing facility that they will have a CapEx. It will not be very much. It will be a medium-level industry.

Guidance & targets

Volume

  • Shrimp Feed Sales Volume Volume · FY26 · High confidence 560,000 metric tons
    It is estimated that the feed sales during FY26 would be around 5,60,000 metric tons.

    — C. Ramachandra Rao

  • Shrimp Exports Volume Volume · FY26 · High confidence 17,000 metric tons
    It is estimated that the exports during FY26 would be around 17,000 metric tons.

    — D. V. S. Satyanarayana

Revenue

  • Pet Care Revenue Revenue · this year · High confidence INR 10 crore
    Yes, sir. We have a target of INR 10 crore for this year.

    — A. Venkata Sanjeev

Capacity

  • Pet Care Plant Construction Start Capacity · 2025 · High confidence by end of this year
    The company is planning to commence the construction by end of this year after obtaining necessary government approvals.

    — K. Srinivasa Reddy

  • Pet Care Plant Construction Duration Capacity · from start of construction · High confidence a year and a half or so
    It will take a year and a half or so. We're going to start construction of plant by end of this year.

    — A. Venkata Sanjeev

What to watch in Q2 FY26

Stabilization of key raw material prices (soybean, wheat flour, fish meal)

Next quarter (with new crop arrivals in Oct/Feb-Mar)
Current Volatile and increasing (Fish meal ~INR 105, Soybean meal ~INR 47, Wheat flour ~INR 35)
Target Stabilization or decrease

Why it matters

Raw material prices are crucial for Feed Division's profitability and margins.

So, we expect that the prices of soybean meal would stabilize by then because as of now, the crop is growing well, and we are expecting a good crop this year also just as in the last year. Similarly, in the wheat flour, wheat flour was about INR 31 in the Q1 FY26, but now it is around INR 35. So, this price has also gone up. And the fresh crop comes around end of February and March. So, we expect that some stabilization would take place in respect of wheat flour.

Risks & concerns

  • US Reciprocal Tariffs (50%) on Shrimp Exports

    high

    The U.S. levied reciprocal tariffs of 50% on shrimp exports, effective August 27, significantly impacting the processing division.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Prices of key raw materials like fish meal, soybean meal, and wheat flour are volatile and have recently increased, impacting profitability.

    Management acknowledged

  • Climatic Changes and Diseases in Aquaculture

    medium

    Heavy rains, premature harvest, and diseases temporarily slowed aquaculture activity, affecting production.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Impact of US tariffs on shrimp prices and dumping allegations Direct
So, to answer that, I think that's a very broad question, and there would be a lot of speculation, and everybody's opinion would differ. In my opinion, yes, there's definitely going to be an inflation in the price of shrimp in the U.S. because all the producers have duty. So, the minimum is 15% for Ecuador and going up to all almost 50% for India, which is the major supplier to the U.S. So, there is definitely a price increase.

Confirms price inflation in the US market due to tariffs and clarifies the company's understanding of dumping regulations.

Asked by Nitin Awasthi

Rerouting of shrimp shipments to avoid US tariffs Direct
I'm sorry about that. So, that's completely illegal so that we don't definitely do anything like that. We don't reroute any of our shipments.

Addresses a critical ethical and legal concern, clarifying the company's strict adherence to regulations and avoiding illegal practices.

Asked by Yash Chandorkar

Passing on US tariffs to customers and impact on margins Direct
So, the first question on tariffs passing on, see the tariff of 50% is something that we cannot absorb. So, we're definitely passing it on to the customer. And the customer, in turn, is averaging out their total purchases from different countries at different tariff rates because, as you know, the U.S. policy has been extremely volatile in the past 8 months. So right now, even the customer is taking the wait and view approach.

Explains the strategy for managing the 50% tariff, indicating that it's being passed to customers who are adjusting their purchasing strategies.

Asked by Ronak Shah

Confidence in FY26 feed sales and export targets despite market volatility and tariffs Partial
But on the long term, if this tariff continues to stand, there'll be a shortfall in the volumes what we did last year. And this is not consistent only to Avanti. It would be consistent to the whole industry and it would be consistent to the whole country as well in other industries also.

Reveals management's long-term concern about volume shortfalls if tariffs persist, despite short-term confidence in meeting targets through diversification.

Asked by Ronak Shah

Impact of US tariffs on upcoming Q3/Q4 FY26 results Direct
I think as of now, if the tariff continues at this rate, I would feel that the impact would be seen not in Q3, but probably in Q4 because according to our accounting, whatever we're shipping today, only when it delivers into the warehouse of the customer, we recognize it as revenue. So, it would take a lead time of 50 days. So, I don't think there'll be significant impact in Q3, but you would see more impact in Q4 if the tariff continues to hold this way.

Provides clarity on the delayed financial impact of tariffs due to revenue recognition policies and lead times, shifting investor focus to Q4 FY26.

Asked by Kumar Divyanshu

Expansion plans for the shrimp processing segment given the current tariff environment Direct
So that currently, we are doing a wait-and-see approach. Right now, we put on hold any further, expansion because of the current tariff situation. But in the long-term view, personally, in my personal opinion, I feel that things will normalize.

Indicates a temporary pause in expansion plans for the processing segment due to tariff uncertainty, highlighting a cautious capital allocation strategy.

Asked by Ayush Mittal

Quality consciousness of different export markets, specifically Japan Direct
Yes. Japan, for sure, is up there on the quality-conscious customers. I would say, generally, in Japan, Korea, are highly quality-conscious. But, again, you have these packs of customers everywhere. In the U.S., there are certain customers that are highly quality-conscious.

Provides insight into market diversification strategy and the specific quality requirements of target markets like Japan and Korea, which aligns with the company's focus on value-added products.

Asked by Rahul Rathi

Request for export incentive data and raw material price details Evasive
Can you please drop an email so that we will check and confirm?

Management declined to provide specific figures for export incentives and detailed raw material prices during the call, suggesting these might be sensitive or complex to explain in a live setting.

Asked by Vincent Andrew

3 min read 7 chapters

Detailed narrative

Q1 FY26 Consolidated Performance Overview

Avanti Feeds reported a robust consolidated performance for Q1 FY26. Gross income increased by 15.7% quarter-on-quarter to INR 1,657 crore, and by 7.7% year-on-year compared to Q1 FY25. Profit Before Tax (PBT) saw an 18% QoQ increase to INR 249 crore and a significant 38% YoY increase from INR 180 crore in Q1 FY25, indicating strong profitability improvements.

Feed Division Performance Highlights

The Feed division's gross income for Q1 FY26 was INR 1,279 crore, a 19.8% increase from Q4 FY25, primarily due to higher sales volume during the main season. PBT for the division rose by 15.5% QoQ to INR 224 crore and a substantial 46% YoY, driven by decreased raw material costs and better overhead absorption. Feed sales volume reached 1,65,564 metric tons in Q1 FY26, up 27.6% QoQ and 4.4% YoY.

Shrimp Processing & Export Division Performance

The Shrimp Processing division recorded a gross income of INR 378 crore in Q1 FY26, an increase of 4% QoQ and a significant 56% YoY. Sales volume increased to 4,223 metric tons, up 51.7% YoY. PBT for the division stood at INR 25 crore, showing a 38.9% QoQ increase, driven by higher sales volume, improved average sale price realization, and favorable foreign exchange rates, despite a slight YoY decrease in PBT.

Pet Care Project Update and Expansion

The Pet Care project, operating under the 'Avant Furst' brand, commenced cat food trading in January 2025 and achieved sales of INR 38.17 lakh in Q1 FY26, a 47.9% QoQ growth. The company expanded its cat food portfolio in July 2025 and launched dog food in August 2025. Market expansion is underway in Tier-1 and Tier-2 cities, with e-commerce operations planned from September 2025 and Quick Commerce from December 2025. A state-of-the-art manufacturing facility is planned near Hyderabad, with construction expected to begin by the end of this year.

Raw Material Price Trends and Volatility

Raw material prices, a crucial factor for the Feed Division, have shown recent volatility and increases. Fish meal prices rose to around INR 105 per kg (from INR 93-94), soybean meal to INR 47 per kg (from INR 38-39), and wheat flour to INR 35 per kg (from INR 31 in Q1 FY26). These increases are attributed to factors like the government's minimum support price announcement and fluctuations in agricultural and fish catches. Management hopes for stabilization with the arrival of new crops later in the year.

Impact of US Tariffs on Shrimp Exports and Mitigation

The US has imposed a 50% reciprocal tariff on Indian shrimp exports, effective August 27, posing a significant challenge. This tariff is being passed on to customers, who are adjusting their purchasing strategies. The company is actively diversifying its export markets to countries like Japan, Europe, Canada, and the Middle-East to reduce dependence on the US. The Indian government is also working on measures to support the marine products export sector and promote domestic consumption to mitigate the adverse impact.

Future Growth Avenues (Fish Feed & Pet Care)

Avanti Feeds is exploring new growth avenues. Trials for imported fish feed from Thai Union Feedmill Company Limited are underway, with plans for domestic production in India upon approval. For the Pet Care segment, a manufacturing facility is planned, with construction starting by year-end and taking approximately 1.5 years. The company aims for INR 10 crore revenue from Pet Care this year and is looking into contract manufacturing opportunities for larger players once the plant is ready.

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