HMA Agro Industries Limited — Q4 FY25 earnings call

Call held 4 Jun 2025

Management summary

HMA Agro Industries reported a 7.25% consolidated revenue growth to INR 52,143 million for FY25, driven by strategic market expansions and operational enhancements. Despite achieving significant milestones like the 5-star Export House Recognition and new market approvals, the company faced margin compression due to rising raw material costs and global economic pressures. Management expressed confidence in future margin recovery and achieving its $1 billion revenue target by 2027 through continued market penetration and operational agility.

Highlights

  • Consolidated revenue reached INR 52,143 million, marking a 7.25% growth from last year.

  • Company received the 5-star Export House Recognition, a significant achievement for an export house.

  • A strategic agreement and joint venture with PKPS from Malaysia is expected to boost business and reputation.

  • Production capacity is set to increase through agreements with ALM Food and ALM Industries, Albania.

  • Approval to supply products to the Philippines was secured, adding a new country to the global market.

Concerns

  • EBITDA and PAT margins have shrunk due to increased live cattle prices globally.

  • Inability to immediately pass on increased raw material costs to customers due to global economic instability and competition.

  • The Red Sea crisis, while partially mitigated, is not completely over and still impacts transit times and shipping routes.

Key financials

  1. Consolidated Revenue 52,143 Mn +7.2%YoY
  2. Standalone Revenue 49,411 Mn +5%YoY

What they filed

Q1 FY27: revenue up 90.4%, net profit up 357.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,367 1,365 1,437 1,088 2,149 +57%1,993 +46%1,538 +7%2,072 +90%
EBITDA28 28 -19 7 37 +32%42 +50%2 +111%-16 −329%
Net profit25 34 -1 7 48 +92%52 +53%19 +2000%32 +357%
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.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Installation of vacuum packing machinery from Prevac
    We have installed well renowned and best machinery from Prevac. This machine will give us vacuum pack that packing, which will also help us to make our product to sell for the premium market like Five Star, Foreca industry, and also to the safe houses. In this upcoming 12 months, we don't hope there will be a very big, CapEx requirement to okay. But if there is a need for any upgradation in any kind of technology, any kind of certification, the company is ready to take the action. But we are fully geared with all our production facility, so no major thing is there until and unless we have any upgradation or urgency to have any updated technology as per the rules and regulation of importing countries or India.
  • M&A PKPS (Malaysia) Joint venture · Signed

    Strategic planning for Malaysian demand and requirement for protein, leading to good business and reputation.

    Expected to give a good business and reputation, impacting existing and future clients positively.

    HMA has made one strategic agreement and joint venture with a company called PKPS from Malaysia. And in the presence of the Chief Minister of Selangor State of Malaysia, this MOU has been signed by both the company, where HMA will be able to make a strategic planning for the Malaysian demand and requirement for the protein. And this will not only give us a good business, also a good reputation to all existing clients and the future clients.

Guidance & targets

Revenue

  • Total Revenue Revenue · by 2027 · High confidence $1 billion USD
    As we have our target for 1 billion to be charged in 2027, and we hope we will be able to touch it very soon.

    — Gulzeb Ahmed, Chief Financial Officer

Market Share

  • Revenue contribution from Philippines, Indonesia, Malaysia Market Share · FY26 · Medium confidence 20-25%
    Philippines is there, then we are also working on another Southeast Asian company. Like this year, we are more aggressive with Indonesia. We are more aggressive with Malaysia. So we hope we will be able to achieve almost 20%, 25% from our share what we are supplying to this market.

    — Gulzeb Ahmed, Chief Financial Officer

What to watch in Q1 FY26

Margin recovery

coming quarters
Current Shrunk EBITDA and PAT margins
Target Improvement in margins

Why it matters

Margin recovery is crucial for profitability, especially given the current compression due to raw material costs.

So once our offer price has been increasing, definitely, the margins will increase.

Risks & concerns

  • Raw material cost inflation

    high

    Increased live cattle prices globally due to factors like global warming, leading to shrinking EBITDA and PAT margins.

    Management acknowledged

  • Limited pricing power in current market conditions

    medium

    Global economic instability and competition prevent immediate pass-through of increased costs to consumers, impacting margins.

    Management acknowledged

  • Lingering impact of Red Sea crisis on logistics

    medium

    While transit times have improved, the crisis is not fully resolved, potentially affecting shipping routes and costs.

    Management acknowledged

Q&A highlights

5 direct
Shrinking EBITDA and PAT margins Direct
As we all know, right, our company is making export for the natural product. And if you do a little bit research, you will be able to see that price for live cattle has been increased overall globally, and this impact has been gained due to the global warming. The further price has been increased. The milk price, what is, which is the byproduct for the live cattle, has been increases. So farmers are resisting to increase the price for their, cattle because whatever cattle we have received, we are getting it once it was dry for the milk. So once they are going for buying new cattle for mating, they have to pay extra. So those money burden has come to our industry. But the good thing is that we are able to get the raw material, and we are able to supply the same to the market. And once you are able to supply the same quantity, slowly, slowly, we have a chance to increase the prices so the buyer, the end consumer will be able to adjust their purchase power.

Explains the primary reason for margin compression (increased raw material costs) and the strategy to gradually pass on costs.

Asked by Sanket Sadh

Receivables reduction and Red Sea crisis impact Partial
It's not slowdown. Previously, due to the transit time of Red Sea destruction, it is taking almost 60 to 65 days. But now we are able to make shipment in 40 days, 42 days. So that day -- that the time syncing is from the transit time. It's not over. It's not over. There are almost 12 or 14 shipping line, which was not allowed to be crossed the Red Sea before. But now, luckily, there are four or five shipping lines which can cross some of the part of Red Sea, so we will be able to save some transit time.

Clarifies that reduced receivables are due to faster transit times post-Red Sea crisis, but the crisis is not fully resolved, indicating ongoing logistical challenges.

Asked by Sanket Sadh

Ability to increase prices and competition Direct
Because this is actually, this is a basic necessity. Food comes in basic necessity. If you want to increase the prices, you have to first retain the customer. Once it is become habit to use your product, then we can charge the price. No. We have our own strategy to sell our product. But once if you put your prices expensive in the market, people have choice because they need nutrition from protein from red meat. So if we charge them extra, they will not buy from us. So we have to see the competition also.

Highlights the company's pricing strategy, prioritizing customer retention and market share over immediate cost pass-through due to the nature of the product and competitive landscape.

Asked by Sanket Sadh

Tailwinds for achieving $1 billion revenue target Direct
As I have as I have informed you in my speech that we have recently got approval from Philippines, which was a new market for us, that we were not supplying from last three, four years because the approval for our client was pending. With Godrej, we have already achieved this approval, so we will be going to supply from now onwards. Also, we are working on new customer from the existing market, which are our like Southeast Asia and also from GCP work. So we are increasing our existing client base also.

Details specific growth drivers, including new market entry (Philippines) and expanding client base, supporting the ambitious revenue target.

Asked by Sanket Sadh

CapEx plans for the next 12 months Direct
In this upcoming 12 months, we don't hope there will be a very big, CapEx requirement to okay. But if there is a need for any upgradation in any kind of technology, any kind of certification, the company is ready to take the action. But we are fully geared with all our production facility, so no major thing is there until and unless we have any upgradation or urgency to have any updated technology as per the rules and regulation of importing countries or India.

Indicates a period of low capital expenditure, suggesting current capacity is sufficient unless regulatory or technological upgrades are mandated.

Asked by Sanket Sadh

Market share in India Direct
I think it is somewhere around 10% to 11%. I don't have the current share because the data is still not ready, but we are performing on the better than what we have written in our red book. So I think it is more than that, more than 10 or somewhere around.

Provides an estimate of current market share, indicating stability or slight improvement from previous disclosures.

Asked by Sanket Sadh

Total cost of cold storage and logistics Partial
The total cost for full storage and logistic is depend where we are sending the product. For logistics, the cost depends on the destination. And cold storage facility, we have our own in-house facilities. Once we produce the material, we keep it in our plant only. But there is a small cost. I'm not having the correct data here. My team will be able to check it for you, and we will get back to you. Okay.

Analyst sought specific cost data, which management deferred, indicating a potential area for follow-up and cost efficiency analysis.

Asked by Sanket Sadh

2 min read 5 chapters

Detailed narrative

Financial Performance and Margin Pressures

HMA Agro Industries reported a consolidated revenue of INR 52,143 million for FY25, representing a 7.25% year-on-year growth. Standalone revenue stood at INR 49,411 million, with an overall growth of approximately 5%. Despite revenue growth, both EBITDA and PAT margins experienced a contraction. Management attributed this to a global increase in live cattle prices, exacerbated by global warming and rising milk prices, which are byproducts. The company noted difficulty in immediately passing these increased costs to consumers due to the global economic climate and competitive pressures.

Strategic Market Expansion and Global Reach

The company achieved significant milestones in market expansion, including securing approval to supply products to the Philippines, a new market that was previously inaccessible for three to four years. This adds to HMA's global reach, aiming for exports to nearly 50 countries. Additionally, HMA signed a strategic agreement and joint venture with PKPS from Malaysia, a major government company, which is expected to enhance its reputation and business in the Malaysian market, one of the largest buyers of its products. The company aims to achieve 20-25% of its market share from the Philippines, Indonesia, and Malaysia combined in FY26.

Operational Enhancements and Production Capacity

HMA Agro Industries has focused on strengthening its operational capabilities. The company entered into production agreements with ALM Food and ALM Industries in Albania, which are expected to increase production capacity and help meet active demand. Furthermore, HMA invested in technological advancement by installing new vacuum packing machinery from Prevac. This technology is intended to enable the company to target premium markets and enhance product preservation.

Capital Allocation and Future Outlook

For the upcoming 12 months, HMA Agro Industries anticipates minimal capital expenditure, as its production facilities are currently well-equipped. Any significant CapEx would primarily be driven by the need for technological upgrades or certifications mandated by importing countries. The company reiterated its ambitious target of achieving $1 billion USD in revenue by 2027, expressing strong confidence in reaching this goal through continued strategic initiatives and market penetration. Management expects margins to improve as competitors in global markets, such as Brazil, Australia, and New Zealand, begin to increase their prices.

Logistics and Supply Chain Resilience

The Red Sea crisis, while not fully resolved, has seen some improvements, with 4-5 shipping lines now able to cross parts of the Red Sea, reducing transit times from 60-65 days to 40-42 days. This has positively impacted receivables. The company utilizes its own in-house cold storage facilities, and while logistics costs are primarily third-party and destination-dependent, they are acknowledged as impacting the entire industry. Management indicated that specific data on cold storage and logistics costs would be provided later.

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