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1. Opening Hook
Avanti Feeds just reported a quarter where consolidated PBT fell 17% quarter-on-quarter—a rare stumble for a company that has spent three years claiming margin recovery. The culprit? Fish meal jumped from ₹117/kg to ₹130/kg in a single quarter, then doubled from ₹100 to ₹240 over May and June. The processing division salvaged the narrative, and management is now betting the next price hike lands smoothly. But they’re also quietly building a pet food factory, filing for tariff refunds in the U.S., and stuck waiting for the government to solve a supply chain crisis neither the government nor the company can predict.
2. At a Glance
- Consolidated gross income (Q4): ₹1,515 cr, up 5.86% year-on-year but only 4.77% quarter-on-quarter. One month of pricing traction buried in a quarter of raw material shock.
- Consolidated PBT (Q4): ₹184 cr, down 17% QoQ, down 13% YoY. Feed margins collapsed; processing salvaged the quarter.
- Full-year story: FY26 PBT hit ₹882 cr, up 20% YoY—a clean headline that buried a Q4 deceleration.
- Feed volumes: 562,060 MT in FY26 (up 1.4% YoY) at nearly flat revenue (₹4,538 cr vs ₹4,549 cr prior year). More tonnage, same sales. Price cuts in April 2025 and no pricing power until February 2026.
- Feed PBT margin: Full year 15.5%, up from 14.34%—but Q4 was 13%, a cliff disguised by annual averaging.
- Processing division: FY26 gross income ₹1,741 cr, up 43%, PBT ₹178 cr, up 107%. The hero that kept consolidated PBT from sinking.
- Raw material shock (unprecedented): Fish meal ₹130/kg (Q4 average), up from ₹91 a year ago. Soybean meal ₹55/kg, up from ₹41. Current pricing even higher: fish meal ₹230/kg, soybean ₹72/kg. Management called May–June “unprecedented”; they’re budgeting in the dark.
- Pet care: ₹151 lakh in Q4, growing from ₹136 lakh in Q3, but from imports. Own plant under development; will materially improve unit economics post-commissioning.
- U.S. tariff refund: Estimated ₹15–20 million (USD 15–20 million, refund timing 12–18 months pending CBP liquidation).
3. Management’s Key Commentary
On raw material inflation:
“Fish meal doubled from INR 100 to INR 240 in a span of two months, May and June.”
(The company watched it happen in real time and still can’t forecast it. “Unprecedented” is a word that does a lot of work when you’re three months into the year and can’t close the budget.)
On the pricing response:
“In one week or 10 days, we should be able to come to a specific number [on the next price increase], balancing recovery vs farmer affordability/market acceptance.”
(Balance is the art of raising prices without the farmer noticing. Two weeks to calculate what you’ll charge—reassuring, or not.)
On FY27 headwinds:
“FY2627 is expected to be a challenging season… due to steep increase in feed raw material prices, as well as exports from India and global demand.”
(The company lists exports as a headwind. India exports shrimp feed it can’t afford to make. Circularly absurd.)
On the export subsidy problem:
“Export of about 75% of the fish meal manufactured in India…[driven by]
