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Informist, Thursday, Feb. 20, 2025

 

MUMBAI – The domestic poultry industry's operating profitability is likely to slip by 50 basis points in 2025-26 (Apr-Mar) because of an increase in feed costs, CRISIL Ratings said on Thursday. However, the revenue of poultry companies could rise 8-10%, driven by healthy volume and firm realisation, it said.

 

The industry's profitability is expected to narrow next fiscal year due to an anticipated increase in prices of maize and soya. "The price of soya, which accounts for around 30% of the total feed cost, declined last fiscal and this fiscal owing to a bumper crop," said Jayashree Nandakumar, director, CRISIL Ratings. "However, with the soya acreage expected to reduce, the price is likely to increase next fiscal. The price of maize, which constitutes about 60% of the overall feed cost, is also expected to increase due to rising demand for ethanol production," Nandakumar said.

 

The credit profiles of poultry companies are expected to remain stable due to modest capital expenditure, no significant debt addition, and healthy accrual, it said. The rating firm analysed 30 such poultry companies, which generated revenue of around INR 100 billion last fiscal year.

 

Firm growth in the domestic consumption of broiler chicken and eggs will drive volume growth. India's per capita consumption of poultry meat and eggs is significantly below the global average, suggesting substantial growth potential, the report said. Changing dietary preferences, rising disposable incomes, and increasing urbanisation are some of the factors that will support volume growth of 4-6% in the medium term, it said.

 

"Given the strong demand and higher feed cost, we expect overall realisation for the industry to grow 4-5% next fiscal. The average price per kg of broiler chicken would increase 3-5% and the average price per dozen eggs by 2-4% on-year," said Rishi Hari, associate director, CRISIL Ratings.

 

The volatility in feed cost, broiler, and egg prices, as well as bird flu outbreaks need to be monitored, it said.  End

 

Reported by Ashutosh Pati

Edited by Avishek Dutta

 

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