This article first appeared on GuruFocus .
Release Date: November 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Avanti Feeds Ltd ( BOM:512573 ) reported a gross income increase of 18.75% in Q2 FY26 compared to Q2 FY25, indicating strong revenue growth.
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The shrimp processing division saw a significant year-over-year growth of 62% in gross income for Q2 FY26.
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The company has successfully diversified its market presence, reducing dependence on a single market and expanding into new geographies.
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Avanti Feeds Ltd ( BOM:512573 ) has launched new pet food products, receiving positive market acceptance and expanding its product portfolio.
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The company is benefiting from favorable foreign exchange rates, contributing to improved profit margins in the shrimp processing division.
Negative Points
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The profit before tax (PBT) for Q2 FY26 decreased by 8.83% compared to Q1 FY26, indicating a decline in profitability.
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Rising raw material costs, particularly for fishmeal and soybean meal, pose a challenge to maintaining profit margins.
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The company faces potential impacts from US reciprocal tariffs, which could affect shrimp processing volumes and margins.
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There is uncertainty regarding the future impact of raw material price fluctuations on feed margins, with expectations of reduced profitability.
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The pet food market is highly competitive, with strong players like Mars, posing challenges for Avanti Feeds Ltd ( BOM:512573 ) in gaining market share.
Q & A Highlights
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Q: What is the expected impact on financial performance if the 50% reciprocal US tariff continues through Q4 FY26? A: Unidentified_7: If the tariffs continue, we might need to reassess our outlook for the year. Currently, we are diversifying into other markets and maintaining a stable forecast of 17,000 metric tons for shrimp processing, but this could change if the situation doesn't normalize.
Q: Can you break down the key components of the other income that supported EBITDA improvement, and how much of it is sustainable? A: Unidentified_2: The major components of other income include income from mutual funds and foreign exchange gains from forward contracts. These are treated as other income in the financials.
Q: Are you expecting a decline in feed sales for CY26 considering your market share? A: Unidentified_2: No, the decline is due to seasonality. We expect to maintain a market share of 51-53% and estimate feed sales to be around 575,000 metric tons, which is better than last year.
Q: How are farmers reacting to the tariff situation, and what is the outlook for the upcoming cultivation season? A: Unidentified_2: Farmers are confident as they are getting good farm gate prices. The tariff situation is adjusting with market corrections, and we are diversifying into other markets and focusing on value-added products.
Q: How are you managing the cost realignment due to the anti-dumping duty, and have you passed on these costs to consumers? A: Unidentified_7: The 50% duty is high, but we have managed to pass on the costs to consumers. We are monitoring how this affects consumption and have adjusted our pricing to include tariffs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
