AVANTI FEEDS LTD.-$ · QQ1 FY-2027 · THE CALL

Revenue beat, profit crushed: raw material inflation overwhelms pricing

The verdict, the claims that held up, the sharpest analyst exchanges, and the risks — the earnings call, decoded from the transcript.

Q1 FY27 results AVANTIFEEDAVANTI FEEDS LTD.-$28 Aug 2026 · 6 min read

Verdict

Hold

confidence 5/10

Credibility

Grade C

Q1 FY27: delivered strong 19% revenue growth but missed implied 10-15% profit guidance with -37% PAT YoY.

Short-term outlook

Negative

next 1–2 quarters

Long-term outlook

Optimistic

multi-year

Revenue beat (19% YoY) masked a severe bottom-line miss: PAT collapsed 37% YoY despite volume growth, crushed by raw material inflation (fish meal +65%, soya bean +45%). Q2 flagged as worse before Q3-Q4 recovery. Margin recovery hinges on unguaranteed commodity stabilization.

₹1899.9 Cr

Revenue · +18.3% YoY

₹116.3 Cr

Reported PAT · −37.4% YoY

Compressing

Margins · vs guidance: Mixed

Did the claims hold up?

Management's claims vs. the numbers

Revenue growth beats 10-15% prior guidance

MET

Consolidated revenue ₹1,900 Cr, +19% YoY

Profit growth in line with 10-15% prior guidance

MISS

PAT ₹116 Cr, -37% YoY (vs implied ₹185 Cr for 10-15% growth)

Feed volume growth accelerating

MET

Feed sales 1,93,852 MT vs 1,65,564 MT Q1 FY26 = +17% YoY

Raw material costs drove margin collapse

MET

Fish meal ₹153/kg vs ₹93/kg (+65% YoY), soya bean ₹58/kg vs ₹40/kg (+45% YoY); feed PBT margin 7.06% vs 17% YoY

Price hikes underway to offset costs

OVERSTATED

~10% price hike taken 19 June 2026 (end of Q1); too late for full quarter benefit

Earnings quality

What changed since the last call

Deltas vs. the prior call

Feed profitability deteriorated sharply

Downgrade

Feed division PBT ₹114 Cr (Q1 FY27) vs ₹224 Cr (Q1 FY26), margin 7.06% vs 17%, due to fish meal (+₹60/kg) and soya (+₹18/kg) YoY cost spikes.

Price hikes lag raw material spikes

Downgrade

10% feed price hike (19 June) vs cumulative ~50% raw material spike (fish meal, soya). Farmer affordability & govt intervention limit pass-through.

Volume growth offset by margin compression

Neutral

Feed volume +17% YoY (1.94L MT vs 1.66L MT) but PBT fell 45% due to negative realization spread (input cost inflation > price increases).

FY27 growth expectations reset lower

Downgrade

Feed sales FY27 target ~5.85L MT (~4% growth) vs implied 10-15% growth from prior guidance; reflects cautious tone after Q1 miss.

The Q&A

Analysts pressed hard on feed price hikes and Q2 outlook. Management conceded Q2 will be 'a larger pinpoint' before benefits. No sharp pushback; management defensive but candid on raw material crisis and farmer affordability constraints limiting pricing power.

The exchanges that mattered

Farm-gate prices — Arjun Khanna, Kotak Mutual Fund

Partial

Farm-gate is balancing factor between global prices and farmer affordability. We monitor both and fix prices considering sustainability.

Shrimp price trends — Arjun Khanna, Kotak Mutual Fund

Answered

Supply-demand driven. When shortage occurs, prices rise; when harvest comes in, prices fall. Depends on availability and global demand.

Feed price hikes — Arjun Khanna, Kotak Mutual Fund

Answered

~10% hike taken 19 June. Balancing farmer affordability, govt policy, feed industry sustainability. Complex process with govt committee working on mechanism.

Tariff refund status — Arjun Khanna, Kotak Mutual Fund

Answered

Entries under ADD/CVD review suspension. CBP will not process refunds until suspension lifted. All currently pending status.

Volume growth inconsistency — Ronak Shah, Equirus Securities

Partial

Shrimp culture progressing well, farmers happy with prices & climate. Only concern is cost. Hoping for stabilization in rest of year.

Cost mitigation options — Ronak Shah, Equirus Securities

Partial

Working on quality & formulation to reduce raw material usage. Govt & stakeholders exploring price mechanism for indexed feed pricing.

Q2 margin outlook — Ronak Shah, Equirus Securities

Answered

Yes.

PetCare investment plan — Ronak Shah, Equirus Securities

Answered

Estimating ₹175 Cr total investment in pet food facility. Land acquired ~₹25 Cr to date near Hyderabad.

Guidance

Forward guidance and management's confidence

FY27 feed sales ~5.85 lakh MT (implied ~4% growth)

Medium

vs FY26 base ~5.62L MT; conservative despite 17% Q1 YoY growth due to monsoon/climate uncertainty and raw material volatility

FY27 frozen shrimp exports ~19,000 MT (~12% growth)

Medium

vs FY26 16,976 MT; modest growth due to tariff overhang and export market uncertainty (USA -17.9% YoY)

Feed PBT margin recovery H2 FY27 if raw materials stabilize

Low

No numeric target; Q2 expected to be 'larger pinpoint' before Q3-Q4 recovery; dependent on monsoon crops and price stabilization

PetCare facility ₹175 Cr total; ₹25 Cr land acquired to date

High

Land conversion and govt consent approval underway; construction to begin upon approval

Risks the call surfaced

Ranked by how much they should concern a holder

Raw material inflation

High

Fish meal & soya bean meal prices up 65% & 45% YoY. Monsoon dependency means no certainty of stabilization. Feed margin at 7.06% unsustainable.

Farmer affordability ceiling

High

Shrimp farmers face margin squeeze; feed price hikes limited by affordability & govt intervention. 10% hike taken 19 June; further increases difficult.

Export tariff uncertainty

Medium

US reciprocal tariff refund (USD 15-20M) still pending; all entries under ADD/CVD suspension. CBP won't process until suspension lifted.

Volume growth deceleration

Medium

FY27 feed sales guidance ~5.85L MT implies only ~4% growth vs 17% Q1 beat. Conservative amid cost pressures & farmer margin squeeze.

PetCare execution risk

Medium

₹175 Cr capex planned; facility near Hyderabad; govt consent approval underway. Execution delays or cost overruns possible; market scale-up uncertain.

Management

Score 6/10. Candid on raw material crisis and Q2 pain; defensive on pricing power due to farmer affordability constraints. Transparent on tariff refund pending status. Track record: prior guidance 10-15% revenue & profit growth; Q1 delivered +19% revenue but -37% PAT. Missed profit guidance due to unforecast commodity spike.

What to watch next

1 · Jul-Sep 2026
Feed price hikes flow through; raw material stabilization hoped
2 · H2 FY27
PetCare facility construction begins (Hyderabad); govt consent approval pending
3 · Q4 FY27
Full-year margin recovery if fish meal, soya stabilize and price mix holds

Margin recovery hinges on unguaranteed commodity stabilization.

Informational and educational content only. Not investment advice.