Venky's (India) Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Venky's (India) faced significant headwinds in Q2 FY26, primarily due to unexpected profit margin compression and lower realizations in its core poultry segment, leading to substantial losses. While the Animal Health and Oilseed segments showed improvement and raw material prices declined, the overall impact on the top and bottom line was severe. Management expressed optimism for a recovery in the second half of the fiscal year, driven by improving poultry prices and seasonal demand.

Highlights

  • Animal Health business is consistent and growing, expected to cross ₹370-380 crores this year from ₹335 crores last year.

  • Oilseed segment performance continued to improve, with EBIT margins now close to 3%.

  • Raw material prices for maize and soya have declined significantly, with maize down ₹1,131 per metric ton and soya down ₹7,163 per ton over the last 6 months.

  • Poultry prices have started moving positively since the last week of October, now exceeding production costs.

  • Management anticipates better realization and operating profitability for the poultry segment in the second half of FY26.

Concerns

  • Company's financial performance was mainly affected by an unexpected fall in profit margins in the poultry and poultry products segment.

  • Lower realization in day-old broiler chicks, CBF Birds, and Broiler Hatching Eggs led to a decline of ₹10.74, ₹17.93, and ₹10.79 respectively over the 6-month period.

  • The poultry segment recorded EBIT losses of around ₹58 crores in Q2 FY26.

  • The QSR segment is still struggling to break even due to low demand, similar to the poultry segment's challenges.

  • An analyst highlighted the company's stock as a 'worst performer' and questioned the erosion of shareholder wealth.

What they filed

Q1 FY27: revenue up 29.1%, net profit up 212.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue774 882 843 866 801 +3%960 +9%1,100 +30%1,118 +29%
EBITDA14 29 25 24 -31 −321%70 +141%130 +420%69 +188%
Net profit8 20 13 16 -27 −437%49 +145%101 +677%50 +213%
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

  • Poultry and Poultry Products Segment
    ₹58 Cr EBIT Loss₹814 Cr Asset Side67% Broiler Segment Capacity Utilization75% Layer Segment Capacity Utilization52% Feed Mill Capacity Utilization
  • Animal Health Products (AHP) Segment
    ₹335 Cr Revenue (FY25)₹370 Cr Revenue (FY26 Target)₹380 Cr Revenue (FY26 Target Max)45% Outside Customer Business Share55% Group Companies Business Share
  • Oilseed Segment
    3% EBIT Margin (Current)4.5% EBIT Margin (Previous)50% Capacity Utilization
  • SPF Segment
    50% Capacity Utilization

Guidance & targets

Revenue

  • Animal Health Business Revenue Revenue · FY26 · Medium confidence ₹370-380 crores

    From ₹335 crores today

    Last year, we closed something at INR335 crores. This year, we are hoping to cross INR370 crores, INR380 crores in the year-end further.

    — Deepak Khosla

Profitability

  • Poultry Segment Operating Profitability Profitability · Second half of FY26 · Medium confidence Far better realization and hence, operating profitability
    Okay. So now given that the festive season is over, what you are suggesting is second half should definitely have far better realization and hence, operating profitability in the poultry segment.

    — J.K. Handa

  • Poultry Segment Losses Recovery Profitability · H2 FY26 · Medium confidence Cover up losses and make money
    And hopefully, we'll cover up the not only the losses, we will try to make the money also because we are having the pack production with us.

    — J.K. Handa

Raw Material Prices

  • Soya and Maize Prices Stability Raw Material Prices · Next 6 months · Medium confidence Likely to be the same only
    See soya prices have been fairly stable last 6 months. And coming 6 months also, we don't see much of a difference in that. It is likely to be the same only.

    — N.K. Toshniwal

QSR Segment

  • QSR Segment Performance QSR Segment · Second half · Low confidence Will again pick up
    So it means it will again pick up in the second half as the poultry prices pick up demand -- demand picks up.

    — J.K. Handa

What to watch in Q3 FY26

Poultry Segment Operating Profitability

H2 FY26
Current EBIT losses of ~₹58 crores in Q2 FY26
Target Better realization and operating profitability

Why it matters

Recovery of the core poultry segment is crucial for overall company performance and profitability.

Okay. So now given that the festive season is over, what you are suggesting is second half should definitely have far better realization and hence, operating profitability in the poultry segment.

Risks & concerns

  • Profit margin compression in poultry segment

    high

    Unexpected fall in profit margins in the poultry and poultry products segment affected financial performance.

    Management acknowledged

  • Lower realization in poultry products

    high

    Lower realization in day old broiler chicks, CBF Birds, and Broiler Hatching Eggs led to significant revenue and profit impact (₹140 crores).

    Management acknowledged

  • Demand-supply imbalance due to external factors

    high

    Festivals, abnormal rains, and flooding in the northern region hampered demand-supply, leading to lower prices.

    Management acknowledged

  • Shareholder wealth erosion and stock underperformance

    high

    An analyst highlighted the company's stock as a 'worst performer' and questioned the erosion of shareholder wealth.

    Analyst not addressed

  • Cyclicality and seasonality of poultry business

    medium

    The poultry business experiences regular cycles and seasonal variations, with Q2 typically being weaker due to festivals.

    Management acknowledged

  • QSR segment struggling to break even

    medium

    The QSR segment is still in the breakeven phase, facing stress due to low demand, similar to poultry challenges.

    Management acknowledged

Q&A highlights

5 direct, 2 evasive
Shareholder wealth erosion and potential demerger of Animal Health business Evasive
We have taken note of your comments, and we'll get back to you shortly on this.

An analyst directly challenged management on stock performance and suggested a strategic move (demerger), but received a non-committal response.

Asked by Ankit Kapoor

Duration of the poultry cycle and impact of hygiene standards Direct
No, that is all right. That is all right. But again, in the poultry also, there are different segments like layer segment, which is having a seasonal period differently. In the winter season, the prices are good. In the summer season, the prices are little on the poor side.

Analyst questioned if the current 8-year poultry cycle downturn is unusually long, and management explained the cyclicality and seasonal variations within different poultry segments.

Asked by Kiran

Providing detailed financial information in investor presentations Partial
As far as your suggestion in regard to provide the data in the results, that we will take up the matter with the management and Board.

Analyst suggested improving transparency by including detailed quarterly data in investor presentations, which management acknowledged for future consideration.

Asked by Keshav Garg

Comparison of Venky's poultry performance with Godrej Agrovet Direct
See, as far as the Godrej Agrovet, they are having the different geographical area for the operation, whereas Venky's is having a different geographical area for the operation in terms of broiler bird.

Analyst questioned why Godrej Agrovet was breaking even while Venky's was not, leading to management clarifying differences in geographical operational areas.

Asked by Keshav Garg

Promoter holding increase through share buyback Evasive
Sir, so the things that are not in our hand, we can't do anything about festivals, price of maize and so on but things that are in the control of management, at least do that, at least return the money of the company, which is due from the promoters and why not use that money to do a share buyback and the promoter holding can increase from the current level of 56% to 75%.

Analyst directly suggested a share buyback to increase promoter holding and return money to shareholders, but management did not directly address the suggestion.

Asked by Keshav Garg

Competitive intensity and supply-demand situation in the poultry segment Direct
So sir, just to reconfirm what we are indicating is it has -- it is more to do with the seasonal nature and there is no structural change in the competitive intensity in this segment. Is that understanding correct? Yes. Yes, it is there. Yes.

Analyst sought clarity on whether the poultry segment's issues were structural or seasonal, with management confirming the latter.

Asked by Akhil Parekh

Impact of declining raw material prices on company profitability Direct
Mr. Sagar, as I explained earlier, cost of production remains almost the same in terms of our main line that is broiler chicks and broiler birds and broiler hatching. But as far as the realization, it is making a lot of difference.

Analyst questioned why the company was still not making profit despite falling raw material prices, and management explained that realization, not just cost, was the key factor.

Asked by Sagar

Capacity reduction in the market due to losses Direct
Yes, purely. One individual customer always looks for the market realization, market month season and all thing and then he shut down the things quickly because it's -- particularly it was broiler segment. In their segment, it's difficult. They are continuous. But in broiler segment, it is a circle of 45 to 50 days.

Analyst inquired about market capacity reduction due to industry losses, and management explained the quick entry and exit of farmers in the broiler segment based on market conditions.

Asked by Keshav Garg

2 min read 5 chapters

Detailed narrative

Q2 FY26 Performance Overview and Challenges

Venky's (India) experienced a challenging Q2 FY26, primarily due to an unexpected fall in profit margins within the poultry and poultry products segment. This led to significant lower realizations, with day-old broiler chicks seeing a decline of ₹10.74 per chick and CBF birds a decline of ₹17.93 per kg over the 6-month period. The overall impact on the top and bottom line from these lower realizations was estimated at ₹140 crores. The company noted that while cyclicality is common, this year's prices were unexpectedly poor, exacerbated by festivals and adverse weather conditions in the northern region.

Poultry Segment Outlook and Recovery Expectations

The poultry segment, which recorded EBIT losses of approximately ₹58 crores in Q2 FY26, is anticipated to recover in the second half of the fiscal year. Management highlighted that poultry prices began to move positively from the last week of October, now exceeding production costs. They expect better realization and operating profitability in H2 FY26, aiming to not only cover losses but also generate profit. The company maintains significant capacity, with broiler segment utilization at 67% and layer segment at 75%, ready to capitalize on improved market conditions.

Animal Health and Oilseed Segment Performance

The Animal Health Products (AHP) segment demonstrated consistent growth, with revenue expected to reach ₹370-380 crores by FY26, up from ₹335 crores in FY25. This segment is considered stable and growing, with 45% of its business from outside customers and 55% from group companies. The Oilseed segment also showed continued improvement, with EBIT margins now close to 3%, though still below the previous range of 4.5-5.5%. The company's SPF segment and Oilseed segment currently operate at 50% and 50-55% capacity utilization respectively, indicating room for growth.

Raw Material Price Trends and Impact

Raw material prices for key inputs like maize and soya have seen significant declines over the past six months. Maize prices reduced by ₹1,131 per metric ton, and soya prices by ₹7,163 per ton. Management expects these prices to remain stable for the next six months. While lower raw material costs are generally beneficial, the company emphasized that realization prices, rather than just input costs, are the primary driver of profitability in the poultry segment. The impact of these lower raw material prices on the cost of production is expected to be reflected in Q3 FY26.

QSR Segment and GST Impact

The Quick Service Restaurant (QSR) segment is currently in a breakeven phase, facing stress similar to the poultry business due to low demand. Sales volume in the QSR segment declined in Q2 FY26. Regarding GST reduction, management clarified that while the price structure was revised, it does not directly impact their realization. However, they expect a positive impact on demand for their QSR plant, which should aid in its recovery in the second half of the year as poultry demand picks up.

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