Avanti Feeds FY26: 657 Crore in Net Profit, Feed Margins About to Fall

General information and entertainment, not investment advice. The author is not a SEBI-registered adviser or research analyst. No recommendation, no promised returns. Markets carry risk including loss of capital. Figures may not be current. Consult a registered adviser before acting.

1. At a Glance

Avanti Feeds’ FY26 profits hit ₹657 crore — a 18% jump from ₹557 crore in FY25. Revenue climbed to ₹6,066 crore from ₹5,612 crore. The number that matters: Q4 revealed raw material costs already climbing. Fish meal hit ₹145/kg by end-quarter, soybean ₹56/kg. Management’s Q4 guidance warned that FY27 PBT margins on shrimp feed will compress to 14.5–15%, down from the 16% run-rate management guided in 9M. Translation: the growth is real, but margin tailwinds are ending.

The processing arm (frozen shrimp exports) is on a roll — 9M FY26 revenue up 52% YoY to ₹1,296 crore. U.S. tariff relief (IEEPA tariffs removed in Feb 2026) knocked out the worst headwind, though a temporary 10%–15% import surcharge replaced it. The company is debt-light (₹13 crore net borrowing), holds ₹438 crore cash, and is building a pet food division that is still in the red ink / trading phase.

2. Introduction

Avanti operates in aquaculture — shrimp feed, shrimp processing & exports, hatchery operations, and a fledgling pet care venture. Headquarters: Andhra Pradesh, which produces ~70% of India’s farmed shrimp. The company dominates: 50% market share in domestic shrimp feed. Thai Union (Thailand’s global seafood giant) owns ~24% and operates the processing subsidiary alongside management.

In May 2026, the company reported audited FY26 results and approved a ₹10-per-share dividend. Management reappointed the CMD (Dr. A. Indra Kumar) for 5 years; the JMD/CS continues. The CFO role changed on June 1, 2026 — C. Ramachandra Rao (who held it) stepped aside; B. Santhi Latha (a 15-year company veteran and chartered accountant) took over.

Most importantly: the concall in March 2026 flagged a cost problem. Raw material inflation — fish meal and soybean meal in particular — is set to hit Q4 and bleed into FY27 at a time when the shrimp culture season is accelerating (mid-Feb onwards). Farmers are returning post-COVID, and stocking is progressing “impressively,” per management. Volume growth could reach “minimum 10% … if not more.” But if the raw material headwind sticks, margin leverage will be limited.

3. Business Model: WTF Do They Even Do?

Shrimp Feed — The bread and butter. FY24 this was 79.6% of revenue. The company makes nutrient-packed pellets under brands like Profeed, Titan, Prostar. Customers: shrimp farmers across India, primarily Andhra Pradesh. The five manufacturing plants have a total installed capacity of 775,000 MT per year. FY26 volume isn’t stated in the annual filings, but Q4 FY26 (concall data) shows ~118,000 MT sold that quarter. At the current 50% market share, Avanti is bigger than the next five competitors combined, and the market knows it.

Shrimp Processing & Exports — Frozen shrimp to North America, Europe, Japan. Three facilities: Yerravaram (15,000 MT), Gopalapuram (3,000 MT), Krishnapatnam (7,000 MT). Subsidiary Avanti Frozen Foods runs it; Thai Union owns 40% of that subsidiary. Mix: raw, value-added, cooked. FY26 processing gross income was ₹1,689 crore (9M FY26 processing revenue ₹1,296 cr, implying Q4 ≈ ₹393 cr). This arm has surged — 9M FY26 processing PBT ₹130 crore vs 9M FY25’s ₹68 crore. The kicker: U.S. tariff chaos (IEEPA tariffs were 25% + another 25%; now replaced by a Section 122 surcharge at 10%–15% for 150 days). Management felt the pain — they booked the tariff cost in opex, which made Q3 FY26 opex spike visibly.

Hatchery — 600 million post-larvae per year. Negligible on revenue (0.4% in FY24), but strategic — secures disease-free seed for culture.

Pet Food — Latest gambit. Subsidiary Avanti Pet Care Private Limited, 60% owned, launched “Avant Furst” cat and dog food in March 2025. Currently trading (importing) products under the brand; own manufacturing is 14–15 months away. Q3 FY26 sales were ₹1.36 crore; Q2 was ₹95 lakhs. Distribution is building on Supertails and Amazon (though Amazon visibility is hampered by an existing “Avant” shoe brand). Management is explicit: margins are immaterial until production starts. Capex estimate is “coming in the next couple of months.” This is a paint-drying story for now.

The Model’s Flaw — Shrimp feed is a commodity play with a 50% monopoly moat that does not prevent raw material pass-through. When fish meal and soybean explode, Avanti can pass the cost, but farmers resist, margins compress, and volumes soften. The company is not immune to aquaculture cycles, and the cycle is now entering a volume-up, margin-down phase.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Quarterly Deep-Dive (Q4 FY26, the latest quarter ended March 31, 2026):

Gross income (revenue + other income): ₹1,503 crore. Operating profit: ₹165 crore (10.9% OPM). After depreciation, interest, and tax, net profit landed at ₹125 crore. On a full-year basis, PBT was ₹881 crore; PAT ₹657 crore (tax rate: 25.5%). No exceptional items in FY26 results (the March annual report showed a ₹1,297 lakh provision for impairment of the Patikari Power associate — a hydel plant that flooded in July 2025 — but this is a rare, non-recurring charge).

Concall Commentary (Mar 2026): Management flagged 9M FY26 consolidated PBT at ₹698 crore, +32.7% YoY. But the split reveals the margin pressure: 9M FY26 shrimp feed PBT was ₹576 crore (+23.87% YoY), but that benefited from weighted-average inventory accounting. Earlier low raw material prices were still flowing through COGS in Q3; Q4 and FY27 will see the higher costs. The guidance was explicit: FY26 full-year feed PBT margin ~14.5%–15%, down from the 16% run-rate in 9M. Management attributed this to “steep increase” in fish meal and soybean meal “during the past three months.” Current stated prices: fish meal ₹145/kg, soybean ₹56/kg. Processing (frozen shrimp) showed stronger momentum — 9M gross income ₹1,296 crore vs ₹855 crore in 9M FY25 (+52%), driven by improved pricing, favorable FX, lower freight, and a tailwind from tariff removal.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 22.2x earnings here, sitting almost at its own 5-year average of 21.3x and well aligned with the