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Avanti Feeds Q1 FY27: Volumes rise, margins compress

Avanti Feeds reported a strong top line in Q1 FY27, but profitability came under pressure. Consolidated revenue from operations increased to INR 1,899.9 crore, up 18.3 percent year on year, led by higher shrimp feed volumes. The quarter, however, was defined by a sharp margin reset. Consolidated EBITDA declined to INR 171.6 crore from INR 265.3 crore in Q1 FY26, and PAT fell to INR 116.3 crore from INR 185.7 crore.

The company’s own summary of the quarter puts the reason plainly: elevated raw material prices. With shrimp feed being the largest segment, higher input costs moved faster than pricing, dragging blended profitability despite higher sales.

Feed volumes carried revenue, input costs hit returns

The shrimp feed segment was the growth driver in Q1 FY27. Segment revenue rose 26.8 percent YoY to INR 1,566.2 crore. Operationally, shrimp feed sales increased to 1,93,852 MT in Q1 FY27 versus 1,65,564 MT in Q1 FY26, and also rose sharply versus 1,23,725 MT in Q4 FY26.

But profit did not follow revenue. In the investor presentation, management noted that shrimp feed PBT for Q1 FY27 was INR 111.2 crore versus INR 223.5 crore in Q1 FY26, with margins at 5.3 percent due to increasing raw material prices. In the concall, management added more detail on why the quarter was difficult, identifying fish meal and soybean meal as the key drivers.

They cited average consumption prices moving meaningfully higher. Fish meal increased to INR 153 per kg in Q1 FY27 from INR 123 per kg in Q4 FY26 and INR 93 per kg in Q1 FY26. Soybean meal increased to INR 58 per kg in Q1 FY27 from INR 49 per kg in Q4 FY26 and INR 40 per kg in Q1 FY26. Wheat flour was the one input that helped, with average consumption price declining to INR 28 per kg in Q1 FY27.

The message from management was that the industry is dealing with a combination of higher input costs, supply-side constraints, and fears of further price escalation. While input inflation can sometimes be managed through price increases, management repeatedly emphasized the need to balance farmer affordability and the sustainability of feed manufacturers.

Processing revenue declined, but margins improved

Shrimp processing and export had a weaker revenue quarter but a better margin profile. Segment revenue declined 10.1 percent YoY to INR 333.7 crore, which management attributed primarily to a 17 percent decline in sales volume.

Even with lower volumes, profitability improved. The presentation shows shrimp processing EBITDA margin rising to 16.0 percent in Q1 FY27. In management commentary, this improvement was attributed to favourable foreign exchange movements, improved average selling price realisation, and higher contribution from other income.

The concall provided additional operating context. The CFO of Avanti Frozen Foods said Q1 FY27 gross income for the processing division was INR 350 crore, down from INR 446 crore in Q4 FY26, mainly due to lower volumes. He also pointed to the withdrawal of reciprocal tariffs effective 24 February 2026 as an influence on average selling price realisation compared with Q4.

Importantly, management also discussed the status of reciprocal tariff refunds in the US. The company stated that entries are under ADD and CVD review suspension, and unless the suspension is lifted, US CBP will not process reciprocal tariff refunds. The company has declared the entry, but the processing remains pending.

Financial summary table

Pricing, policy involvement, and FY27 operating expectations

A key takeaway from the concall was that feed pricing decisions are not only a commercial decision. Management referred to government involvement and statutes in Andhra Pradesh. They also said the government has constituted a committee with a Big Four consultant to work on pricing and how to handle the steep rise in key inputs.

On the company’s own actions, management confirmed a shrimp feed price hike of around 10 percent taken around 19 June 2026. When asked whether further hikes are envisaged, management did not commit to a number or timeline, reiterating the need for a balanced approach that keeps farmers viable while ensuring sustainability for feed manufacturers.

For FY27, management offered a few explicit estimates. Feed sales for FY27 are estimated to be around 5,85,000 MT. For shrimp processing exports, management estimated FY27 exports at around 19,000 MT.

They also provided a broader industry view. Management stated that FY26/27 is expected to be a challenging season for the aquaculture industry due to the steep increase in feed raw material prices, alongside export and global demand dynamics. At the same time, they pointed to favourable monsoon conditions and expected easing of El Nino effects, which they believe could help raw material prices stabilise in coming months when fresh crops arrive.

Pet food: early traction and a defined capex plan

Avanti’s pet food initiative is still small relative to the shrimp businesses, but it is becoming more visible in disclosures. The company is operating under its pet care brand Avant Furst. Management stated that Q1 FY27 sales were INR 180 lakh, up from INR 151 lakh in Q4 FY26.

The company is expanding distribution across Tier 1 cities and gradually moving into Tier 2 and Tier 3 markets, with products also available on Amazon and Supertail. Management also spoke about targeted digital marketing on Instagram and Facebook and plans to introduce new flavours and variants.

On the manufacturing side, management said land near Hyderabad has been purchased and converted from agricultural to non-agricultural use for a pet food plant. Consent for Establishment has been applied for and construction will start after approval. In response to a question on investment, management estimated capex for the pet food facility at around INR 175 crore, with about INR 25 crore spent on land.

Closing takeaways

Q1 FY27 reinforced Avanti Feeds’ operating leverage in both directions. When feed volumes rise, the top line responds quickly. But when key raw material costs rise sharply, blended margins can compress even in a growth quarter.

The processing business offered a partial offset, with improved margins despite lower volumes, supported by FX and realizations. Management’s commentary suggests FY27 will require careful balancing of pricing, farmer economics, and input cost volatility. Investors should track how quickly raw material inflation stabilises and how effectively price increases flow through, especially into Q2 and the rest of the year.