HMA Agro Inds.

HMA Agro Industries reported a robust Q1 FY26 with standalone revenue increasing 57% year-on-year to INR 10,884 million, up from INR 6,933 million in Q1 FY25. Consolidated revenue also saw significant growth, reaching INR 11,226 million compared to INR 7,126 million in the previous year. This growth was primarily fueled by strong export demand from Southeast Asian, Middle East, and West African markets, alongside the company's established brand reputation and efficient supply chain.

Despite strong top-line growth, consolidated PAT for Q1 FY26 declined to INR 5.9 million from INR 7.2 million in Q1 FY25. This contraction was attributed to higher operating costs, specifically increased freight charges and a rise in raw material prices, particularly live buffalo. Management highlighted that uncertain shipping costs and geopolitical restrictions, such as those affecting the Red Sea, significantly impacted delivery costs and overall profitability.

The company successfully secured approval to supply products to Cuba, marking its first entry into the Latin American market. This initiative is expected to build a new clientele base and contribute to future growth. HMA Agro Industries also continues to diversify its product portfolio beyond buffalo meat, with contributions from seafood, sheep, goat, and rice, which saw increased turnover in the quarter.

HMA Agro Industries currently utilizes 45-65% of its capacity for its main business and 60-65% for rice production, indicating significant headroom for future growth without immediate large-scale capital expenditure. The company undertook minor CapEx of approximately INR 7-8 crores in Q1 FY26, primarily for technology upgradation and a slight increase in capacity. Management stated that no substantial CapEx is planned unless new plant opportunities arise.

Management addressed analyst queries regarding HMA's 57% growth contrasting with the broader Indian buffalo export growth of 15-20%. They explained that HMA's growth is driven by its strong brand, established client trust, faster delivery, and commitment to business continuity, which allows it to capture market share beyond general industry trends. Additionally, the company's sales are booked upon delivery to destination, differing from customs data which records exports upon exit from India.

The company acknowledged ongoing challenges from the global economic environment, including inflation, high freight costs, and geopolitical restrictions. These factors have created an unstable operating landscape, impacting delivery timelines and overall cost structures. Management also noted the potential long-term challenge posed by global warming and weather changes, which could affect agricultural commodities.

HMA Agro Industries clarified that it is not directly impacted by US tariffs, as India does not supply meat for human consumption to the US market. Management suggested that US tariffs on other countries could indirectly benefit HMA by redirecting demand from those markets towards Indian suppliers. The company also monitors the pricing strategies of competitors like Brazil, noting that Brazil's pricing might be constrained if its market access is restricted by US tariffs.