Avanti Feeds Limited — Q2 FY26 earnings call

Call held 15 Nov 2025

Management summary

Avanti Feeds reported a mixed Q2 FY26, with strong YoY growth in consolidated revenue and PBT, driven by robust performance in the Shrimp Processing and Export division and significant growth in the nascent Pet Food segment. However, QoQ consolidated PBT saw a decline, mainly due to pressure on the Feed Division's profitability from increasing raw material costs and a decrease in feed sales volume. The company is navigating challenges from rising input costs and US tariffs while focusing on market diversification and new product ventures.

Highlights

  • Consolidated Gross Income for Q2 FY26 grew 18.75% YoY to INR 1,659 crores, and 0.12% QoQ.

  • Consolidated PBT for Q2 FY26 increased 40.12% YoY to INR 227 crores.

  • Shrimp Processing & Export division showed strong growth, with Gross Income up 62.68% YoY to INR 462 crores and PBT up 130.43% YoY to INR 53 crores.

  • Pet Food sales significantly increased by 149.19% QoQ to INR 95.08 lakh in Q2 FY26, with e-commerce operations commencing.

  • Management maintains a strong market share of 51-53% in the feed division and expects FY26 feed sales of 575,000 metric tons.

Concerns

  • Consolidated PBT for Q2 FY26 decreased 8.83% QoQ to INR 227 crores.

  • Feed Division PBT for Q2 FY26 declined 19.64% QoQ to INR 180 crores, primarily due to decreasing sales quantity and increasing raw material costs.

  • Raw material prices (fish meal, soya bean meal, wheat flour) are increasing significantly, leading to an expected reduction in feed margins to 9-10% for the current year.

  • The threat of reciprocal tariffs by the US and the challenging aquaculture season pose risks to future profitability.

Key financials

  1. Consolidated Gross Income ₹1,659 Cr +18.8%YoY
  2. Consolidated PBT ₹227 Cr +40.1%YoY
  3. Feed Division Gross Income ₹1,200 Cr +7.8%YoY
  4. Feed Division PBT ₹180 Cr +24.1%YoY
  5. Shrimp Processing Gross Income ₹462 Cr +62.7%YoY
  6. Shrimp Processing PBT ₹53 Cr +130.4%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 IncomePBTSales Volume
Feed Division₹1,200 Cr₹180 Cr1,54,644 MT
Shrimp Processing & Export Division₹462 Cr₹53 Cr4,862 MT
Pet Food Project———

Guidance & targets

Volume

  • Feed Sales Volume · FY26 · High confidence 575,000 metric tons
    It is estimated that the feed sales during FY26 would be around 575,000 metric tons.

    — Santhi Latha

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

    — Santhi Latha

Market Share

  • Feed Market Share Market Share · future · High confidence 52-53%
    As far as the market share is concerned, definitely we are above 50%, it is ranging from 51% to 53%, that is the range which we are now operating. And I think we will continue to hold that position at 52%, 53% in future also.

    — C. Ramachandra Rao

Profitability

  • Feed PBT Margins Profitability · current year overall · Medium confidence 9-10%
    So, the margins are naturally likely to come down to maybe around it to be 9% and 10%. So, 10% is a good achievable profitability for this current year overall.

    — C. Ramachandra Rao

Capacity

  • Pet Food Manufacturing Unit Commissioning Capacity · FY27 · High confidence by end of FY27
    And also by the time we start our manufacturing unit by end of FY27, so we should be able to fully have a substantial market to our company.

    — C. Ramachandra Rao

What to watch in Q3 FY26

Feed Division PBT Margins

Next quarter (Q3 FY26)
Current Expected to be 9-10% for current year overall
Target Stability or improvement from 9-10% range

Why it matters

Raw material price increases are a key concern impacting profitability, and monitoring actual margins against guidance is crucial.

So, the margins are naturally likely to come down to maybe around it to be 9% and 10%. So, 10% is a good achievable profitability for this current year overall.

Risks & concerns

  • Raw material price inflation

    high

    Prices of fish meal, soya bean meal, and wheat flour are increasing significantly due to supply-side issues and government policies, impacting feed margins.

    Management acknowledged

  • Threat of reciprocal tariffs by the US

    medium

    The forecast for the next three months is challenging due to the threat of reciprocal tariffs by the US, though stabilization is expected over time.

    Management acknowledged

  • Challenging aquaculture industry season

    medium

    FY25-26 is expected to be a mix of favourable and challenging seasons for shrimp production and exports.

    Management acknowledged

  • Competition in pet food market

    medium

    The pet food market has very strong, long-term players, requiring significant effort and time to build market share.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Impact of 50% reciprocal US tariff on FY26 processing volume and EBITDA Partial
It's difficult. It's very speculative, and, like, it's everyone's own opinion. Right? So, what we've given is 17,000 is the current forecast. So, that's what we'll stick with.

Management acknowledged the difficulty in quantifying the tariff impact but maintained the export volume forecast, indicating confidence or a wait-and-see approach.

Asked by Akhilesh Rawat

Breakdown and sustainability of 'other income' Direct
One is in respect of feeds. We have deposits, on that we are getting income from mutual funds, FDs and various portfolios that we are investing the reserves, which is giving the income that is treated as the other income. And as far as Frozen is concerned, it is the foreign exchange gain that by booking the forward contracts, we have been able to make significant income out of the fluctuation in foreign exchange.

Clarified the sources of 'other income' for both Feed and Frozen divisions, indicating a mix of recurring (investments) and potentially volatile (forex gains) components.

Asked by Akhilesh Rawat

Farmers' response to the tariff situation for the upcoming cultivation season Direct
the farmers are very confident because they have been able to get their farm-grade prices comfortably and they are making money and more so, the tariff has not really, over a period of time, slowly the situation is getting adjusted to the market corrections what we can say, see if not the U.S. market, why not other markets.

Provided insight into the ground reality, suggesting farmers are not significantly deterred by tariffs due to good prices and market diversification efforts.

Asked by Ronak Shah

Diversification strategy for shrimp exports given high North America share Partial
North America as a country, as we just diversify that way, but the US in general, our total share volume is coming down.

Addressed the strategy to reduce reliance on the US market, despite the analyst's observation of a high North America share, indicating a focus on broader market diversification.

Asked by Ronak Shah

Potential for refund if US Supreme Court declares tariffs invalid Evasive
This is quite speculative, to be very frank. So, nobody really knows where this is going. In terms of refund, see, as Avanti, we've been able to pass on the tariff. So, whether getting this refund, I'm not sure. I don't think we'll actually get the refund. We have to give it back to the customer, I guess.

Management indicated that a refund is unlikely as the tariffs were passed on to customers, making it a remote possibility and highly speculative.

Asked by Kamal Sharma

Update on CVD/antidumping duty rates and how costs are realigned Direct
No update right now. There's only a preliminary assessment done, so the final review hasn't come out yet. ... So, whatever orders we had on our books, and, so we worked with our customers to add on the tariff rate.

Confirmed no new update on duty review and clarified that the tariff costs are being passed on to customers through pricing.

Asked by Ronak Shah

Market size and positioning for fish and pet feeder ventures Direct
the first point is our fish feed because the fish feed is a bit challenging area because the fish feed prices keep fluctuating and there are different species and the feed also differs for each species. ... Coming to the pet food, see the pet food is very challenging market and we have started, I would say that with a very good beginning because first we launched our cat food with the pace which has been accepted by the market right from day one.

Provided a strategic overview of the new ventures, highlighting the challenges in fish feed and the positive initial reception but competitive landscape in pet food.

Asked by Ronak Shah

Raw material price trends and expected FY26 feed EBIT margins Direct
So, the margins are naturally likely to come down to maybe around it to be 9% and 10%. So, 10% is a good achievable profitability for this current year overall.

Management explicitly guided for a moderation in feed margins to 9-10% for the full year due to significant increases in raw material costs, despite efforts to manage pricing.

Asked by Akhilesh Rawat

3 min read 6 chapters

Detailed narrative

Q2 FY26 Consolidated Performance Overview

Avanti Feeds reported a consolidated gross income of INR 1,659 crores in Q2 FY26, marking an 18.75% increase compared to INR 1,397 crores in Q2 FY25, and a slight 0.12% increase from INR 1,657 crores in Q1 FY26. The consolidated PBT for Q2 FY26 stood at INR 227 crores, a significant 40.12% rise from INR 162 crores in Q2 FY25. However, PBT saw an 8.83% QoQ decrease from INR 249 crores in Q1 FY26, indicating some sequential pressure on profitability.

Feed Division Performance & Raw Material Trends

The Feed Division's gross income for Q2 FY26 was INR 1,200 crores, an increase of 7.82% YoY from INR 1,113 crores in Q2 FY25, but a 6.18% QoQ decrease from INR 1,279 crores in Q1 FY26. PBT for the Feed Division was INR 180 crores, up 24.14% YoY from INR 145 crores, but down 19.64% QoQ from INR 224 crores. This decline is attributed to a decrease in feed sales volume to 154,644 MT in Q2 FY26 from 165,564 MT in Q1 FY26, coupled with rising raw material costs. Fish meal prices increased to INR 97/kg in Q2 FY26 from INR 93/kg in Q1 FY26, and soya bean meal to INR 42/kg from INR 38/kg, impacting margins.

Shrimp Processing & Export Division Highlights

The Shrimp Processing and Export division demonstrated robust growth, with gross income reaching INR 462 crores in Q2 FY26, a substantial 62.68% YoY increase from INR 284 crores in Q2 FY25, and a 22.22% QoQ increase from INR 378 crores in Q1 FY26. PBT for this division surged to INR 53 crores in Q2 FY26, up 130.43% YoY from INR 23 crores and 112% QoQ from INR 25 crores. This strong performance was driven by higher sales volumes of 4,862 MT in Q2 FY26 (up from 3,423 MT in Q2 FY25), improved average selling price realization, and favorable foreign exchange rates, alongside a decrease in ocean freight rates.

Pet Food Project Update and Expansion

The Pet Food project, operating under the 'Avant Furst' brand, showed significant progress. Sales in Q2 FY26 reached INR 95.08 lakh, marking a 149.19% QoQ increase from INR 38.17 lakh in Q1 FY26. The company expanded its product portfolio with cat food (ocean fish and tuna flavors) and launched dog food in August 2025. E-commerce operations have commenced, with Amazon go-live expected by the end of November 2025. Land has been purchased for a state-of-the-art manufacturing facility near Hyderabad, with commissioning targeted by the end of FY27, pending detailed project report and government approvals.

Aquaculture Industry Outlook & Government Support

Management noted that despite recent challenges, including US tariffs, the aquaculture industry continues to demonstrate strong and sustainable growth, supported by market diversification, consistent global demand for shrimps, and a focus on value-added products. The Union Cabinet recently announced an export promotion scheme of INR 25,000 crores over five years to aid exporters. Additionally, the government is promoting domestic shrimp consumption, and the reciprocal tariff situation with the US is expected to stabilize as trade negotiations progress.

Raw Material Price Volatility and Margin Outlook

The company highlighted significant volatility and upward pressure on key raw material prices. Fish meal, currently at INR 125/kg, is expected to stabilize around INR 125-130/kg. Soya bean meal, currently at INR 47/kg, has seen prices rise due to reduced production and increased MSP, with further increases expected in the coming months. Wheat flour prices are also impacted by export permissions. These factors are expected to increase raw material costs, making it difficult to raise feed prices. Consequently, feed margins are projected to moderate to 9-10% for the current financial year.

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