Avanti Feeds

Avanti Feeds reported a robust consolidated performance for Q4 FY25, with gross income reaching INR 1435 crores, an 8.7% increase from INR 1320 crores in Q4 FY24. Consolidated PBT for the quarter surged by 40% YoY to INR 211 crores, up from INR 151 crores in the prior year. For the full fiscal year FY25, total consolidated income grew to INR 5778 crores from INR 5505 crores in FY24, while PBT saw a significant 37.2% increase, reaching INR 737 crores compared to INR 537 crores in FY24, primarily driven by higher revenue and reduced raw material costs.

The company experienced favorable raw material price trends, particularly for fishmeal and soyabean meal, which contributed to improved profitability. Fishmeal prices decreased to INR 91 per kg in Q4 FY25 from INR 119 per kg in Q4 FY24, and soyabean meal prices fell to INR 43 per kg from INR 52 per kg over the same period. However, wheat flour prices increased to INR 36 per kg in Q4 FY25 from INR 30 per kg in Q3 FY24. Management noted that raw material prices are subject to fluctuations due to factors like government Minimum Support Prices (MSP) and harvest cycles, making price stability a continuous challenge.

The shrimp processing and export division recorded a gross income of INR 364 crores in Q4 FY25, marking an 11% QoQ increase and a 22% YoY increase from INR 297 crores in Q4 FY24. Sales volume for the quarter grew to 4100 MT from 3846 MT YoY. Despite the volume growth, the division's PBT remained flat QoQ at INR 18 crores and decreased YoY from INR 32 crores, primarily due to the full impact of countervailing duty (CVD) and higher raw material prices. For the full year FY25, the division's PBT declined to INR 86 crores from INR 136 crores in FY24.

Avanti Pet Care Pvt Ltd, a subsidiary, successfully launched its first cat food product, 'Avant Furst' (ocean fish flavor), in January 2025, achieving sales of INR 25.79 lakhs by March 2025. The company plans to introduce a second cat food flavor by the end of June 2025 and will launch dog food, which accounts for 80% of the pet food market, in August 2025. The revenue target for the pet care division in FY26 is INR 10 crores. The company is in the final stages of acquiring land for its manufacturing facility, with construction slated to begin in September or October 2025.

The US has imposed reciprocal tariffs, adding to existing Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) on shrimp imports. India now faces a total tariff of 33.12% (ADD 1.35%, CVD 5.77%, reciprocal tariffs 26%). While this impacts India's competitiveness against Ecuador, it positions India favorably against other Asian countries like Vietnam (46% total tariff) and Thailand (36% total tariff). The company is actively working with the Indian government and industry associations to address these duties and is diversifying its export markets to regions such as Japan, Korea, the EU, and the Middle East to reduce dependence on the US market.

Avanti Feeds maintains a strong financial position with zero borrowings, reflecting a conservative capital allocation strategy. Management stated that surplus funds, estimated by an analyst to be around INR 1,900 crores, are primarily utilized for working capital requirements, which yields a 15-20% saving in interest costs. The company also invests these funds in secured, triple-rated companies to achieve a pre-tax return of 7-8%. The long-term target for Return on Capital Employed (ROCE) is 13-15%, which management considers a reasonable and ideal benchmark.