Avanti Feeds Result and Concall: Pet Food Expansion & Market Outlook

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Avanti Feeds Result and Concall – February 2025

Avanti Feeds Result and Concall – February 2025

Financial Performance Overview

Avanti Feeds reported strong financial growth in Q3 FY ’25. The company’s total income reached ₹1,405 crores, showing an increase from ₹1,397 crores in Q2 FY ’25 and ₹1,287 crores in Q3 FY ’24. This reflects a 9.17% growth compared to the previous year.

The Profit Before Tax (PBT) rose to ₹184 crores, marking a 14% rise from Q2 FY ’25 and a 59% jump from Q3 FY ’24. Over the nine-month period ending December 2024, total income stood at ₹4,343 crores, with PBT increasing to ₹526 crores from ₹386 crores in the previous year.

Feed Division Performance

The standalone income of the feed division in Q3 FY ’25 was ₹1,077 crores. While this was a slight dip from ₹1,118 crores in Q2 FY ’25, it was an improvement from ₹958 crores in Q3 FY ’24. This increase was driven by a 15% rise in sales volume.

PBT for the feed division:
- ₹166 crores in Q3 FY ’25
- ₹145 crores in Q2 FY ’25
- ₹76 crores in Q3 FY ’24
Feed sales volume:
- 132,049 MT in Q3 FY ’25
- 134,897 MT in Q2 FY ’25
- 116,318 MT in Q3 FY ’24

Raw Material Prices

The company benefited from a drop in fish meal and soybean meal prices, reducing production costs:

Fish meal: ₹93 per kg (down from ₹105 per kg in Q2 FY ’25)
Soybean meal: ₹46 per kg (down from ₹49 per kg in Q2 FY ’25)

However, wheat flour prices increased to ₹35 per kg from ₹32 per kg, which could impact future expenses.

Shrimp Processing and Export Division

The shrimp processing division reported a gross income of ₹328 crores in Q3 FY ’25. While this was higher than ₹284 crores in Q2 FY ’25, it slightly dropped from ₹330 crores in Q3 FY ’24.

PBT for the shrimp division:

₹18 crores in Q3 FY ’25
₹23 crores in Q2 FY ’25
₹40 crores in Q3 FY ’24

The decline was mainly due to rising raw material costs and ocean freight rates.

Expansion in Pet Food Market

Avanti Feeds is expanding into the pet food industry through a joint venture with Bluefalo Company Limited, Thailand. The company launched its cat food brand, ‘Avant Furst,’ in January 2025 and plans to introduce dog food by July 2025.

A manufacturing facility in Hyderabad is in the pipeline, with operations expected to begin by December 2026.

Market Outlook and Growth Plans

Shrimp production in 2025 is expected to remain stable with a 5% increase over last year.
The company is focusing on new global markets like Japan, Korea, and the EU to offset the 5.77% countervailing duty (CVD) on shrimp exports to the U.S.
Increased emphasis on value-added products to improve profit margins.

Challenges and Risks

Avanti Feeds faces some headwinds:

CVD on shrimp exports to the U.S. could reduce profit margins.
Fluctuating raw material prices, especially wheat flour, pose a risk to earnings.
The company is working on cost optimization and higher-value products to manage these challenges.

Future Growth Drivers

Avanti Feeds is looking at pet food and fish feed as major areas of expansion.

The goal is to increase shrimp feed exports from 1-2% to nearly 10% over the next few years.
The company will leverage its expertise in the feed industry to strengthen its position in new markets.

Avanti Feeds delivered strong financial results in Q3 FY ’25. The company continues to grow despite challenges like rising raw material costs and export restrictions. With new pet food ventures and global market expansion, Avanti Feeds is well-positioned for future growth. Investors and industry watchers can expect continued focus on innovation and efficiency in the coming quarters.