Venky's (India) Limited

Venky's (India) reported that its Q4 FY25 financial performance was primarily impacted by a significant fall in profit margins within the Poultry and Poultry Products segment. Despite this, the overall financial performance for the full year FY25 was deemed satisfactory and better than FY24. The Animal Health Products segment delivered a satisfactory performance, while the Oil Seed segment began showing signs of improvement. Cash and cash equivalents stood at INR 16.75 crores as of March 31, 2025, a decrease from INR 18.83 crores last year, while the company's debt position slightly improved to INR 165.14 crores from INR 167.51 crores.

The Poultry segment experienced a notable decline in profitability during Q4 FY25, with EBITDA falling sharply from INR 38 crores to INR 4 crores. This was largely attributed to the Kumbh Mela in the northern region, which lasted 30-45 days and affected consumption and logistics. Broiler bird realization in Q4 FY25 was INR 78 per kg, down from INR 87 per kg in Q4 FY24, while chick realization increased to INR 39 from INR 35. For the full year FY25, poultry segment revenue grew by 9.8% to INR 1,927 crores from INR 1,755 crores in FY24, driven by increased productivity and placement.

The Oil Seed segment, despite historical challenges, has started showing improvement, with management anticipating good profitability ahead. The cost of maize for Q4 FY25 was INR 24.50 per kg, up from INR 23.50 per kg in Q4 FY24. Soya DOC prices in Q4 FY25 were INR 31.20 per kg, a decrease from INR 44.30 per kg in Q4 FY24. Management clarified that the government's increase in edible oil duty rates was to support local farmers, not an anti-dumping measure, and that soya oil prices had fallen below palm oil prices due to increased soya imports.

The Animal Health Products (AHP) segment demonstrated consistent and satisfactory performance, with turnover increasing to INR 339 crores in FY25 from INR 310 crores in FY24, marking a 9.35% growth. The new facility for AHP is operating at 55-60% capacity utilization, and new product lines are being explored. Management is optimistic about the segment's future, projecting a 15% top line growth for FY26, driven by new product innovations and export opportunities.

Venky's is undertaking a strategic capital expenditure of INR 70 crores for SPF (Specific Pathogen Free) expansion, which is expected to take approximately one year to complete and two years to come into full production. This expansion involves building six houses for an annual placement of 40,000 birds. Additionally, the company plans to launch ready-to-eat spices production in the next quarter, targeting both local and export markets, with a focus on authentic Indian tastes and minimal cooking intervention required from consumers.

Concerns regarding high receivables from the parent company were addressed, with management stating that group outstanding has significantly reduced from INR 665 crores in March 2024 to INR 165-171 crores this year. This indicates an improvement in working capital management with the group. In the processed food division, the company is focusing on e-commerce channels, expecting sales growth of over 25-30% in the next year, as e-commerce has gained significant traction post-COVID and is seen as a key growth driver.