Venky's (India)

Venky's (India) reported a substantially improved overall performance for Q4 FY26 and the full year FY26. The poultry and poultry products segment delivered robust results driven by improved realization from day-old chicks and grown-up broilers. The Animal Health Products segment continued its growth trajectory with increased turnover and profitability, while the Oil Seed segment showed a vast improvement compared to previous quarters. Management noted that the company's profile is balanced, with approximately 49-50% from poultry and the remainder from Oil Seed and Animal Health divisions.

In FY26, commercial broiler bird volume decreased by 5.23% to 8.69 crores, with realization also slightly down by 0.86% to INR89.59/kg. However, layer chicks volume increased by 4.34% to 4.57 crores, and broiler chicks volume grew by 6.41% to 11.46 crores. The poultry segment achieved an operating margin of almost 14% in Q4 FY26. Management expects the poultry division to be less volatile in FY27, with overall yearly performance balancing out despite potential Q1 productivity dips due to seasonality, which typically sees 10-12% lower productivity.

The Animal Health Products segment reported a turnover of INR100 crores for FY26. The segment's EBIT margins significantly improved to almost 29% in Q4 FY26, compared to historical levels of 23-24%. This improvement is attributed to product mix changes, the commissioning of a new therapeutic unit, and expanded distribution channels. Management anticipates sustained double-digit growth for this segment in the coming years, with full-year EBIT margins expected to remain above 22-23%, despite potential near-term pressure from rising raw material costs.

The Oil Seed segment registered a vast improvement, with EBIT margins increasing to 5.3% in Q4 FY26. This turnaround is driven by a gradual increase in capacity utilization, currently at 65-70%, with a target to reach 80% for the current year. The company is also focusing on increasing outside sales, aiming to grow it from 20% to 1/3 of its production, which is expected to contribute 60-65% of the segment's total revenue. This strategy aims to reduce dependence on internal group sales and improve overall margins.

Management expects raw material prices, particularly maize and soya, to remain volatile in the coming months. This volatility is linked to crude oil prices, ethanol production, and international market dynamics. Despite this, the company believes that strong realization factors and consumption demand will help absorb the impact. Broiler prices, which were strong in Q4 FY26 and early April, have seen a decline since May 10th/11th, which could affect current quarter realizations.

The company maintains a strong capital position, with no new capital expenditure planned for the next year, as existing units are being strengthened. Receivables have shown an improvement, decreasing from INR553 crores last year to INR544 crores this year, despite an increase in Oil Seed segment turnover by INR150 crores. Management confirmed sufficient working capital of INR160 crores is available to meet the requirements of all segments and maintain adequate inventory, indicating stable debt levels relative to business growth.