Avanti feed share is it poised to grow or new venture in pet food would unfold something else? Let’s dive in this research
In a market flooded with noise, sometimes it takes one quiet but consistent performer to surprise you. Avanti Feeds Ltd. stock, India’s dominant player in the shrimp feed and export business, just wrapped up FY25 with a powerful mix of steady growth, strategic bets, and prudent management.
But is this the right time to consider investing? Or is it just another fish in the sea?
Let’s break it down.
What Does Avanti Feeds Do, Anyway?
Avanti operates across three synergistic verticals:
- Shrimp Feed – Supplying ~45% of India’s feed market, the company clocked 5.55 lakh MT in FY25.
- Shrimp Processing & Exports – Serving global markets (esp. the U.S.), they exported 14,149 MT in FY25, with a target of 17,000 MT in FY26.
- Pet Food (New Venture) – Under the brand “Avant Furst”, Avanti has started importing & selling premium cat food and is launching dog food by August 2025, eyeing a ₹10 Cr topline this fiscal.
FY25 at a Glance – Strong Numbers in a Volatile Sea for Avanti feed share
| Metric | FY25 |
|---|---|
| Revenue | ₹5,778 Cr (up 5%) |
| Profit Before Tax | ₹737 Cr (up 37% YoY) |
| Feed Business | ₹4,563 Cr Revenue, ₹659 Cr PBT |
| Frozen Foods | ₹1,219 Cr Revenue, ₹86 Cr PBT |
| Pet Food | ₹25.79 lakh in pilot sales, full-scale ramp in FY26–27 |
The growth of Q4 FY25 was driven by:
- Softer raw material prices (soybean meal and fishmeal)
- Higher capacity utilization
- Forex tailwinds on exports
- Volume uptick in shrimp exports despite industry-wide pressure
What Makes This Business Interesting?
1. Operating Moat
- Market leader in shrimp feed
- Integrated supply chain with processing and exports
- Pet food venture gives optionality for long-term rerating
2. Clean Balance Sheet
- Zero debt
- Strong internal accruals funding working capital
- No speculative capex; only strategic capacity addition
3. Timely Strategic Bets
- Pet food is a ₹5,000+ Cr domestic opportunity, growing 15–20% CAGR
- Shrimp exports being diversified beyond the U.S. (Japan, Korea, EU)
Risks: The Hidden Currents
Despite a strong FY25, there are risks investors must weigh carefully:
- U.S. Exposure: Over 70% of shrimp exports go to the U.S. – and that’s where volatility looms large. Countervailing Duties (CVD), Anti-Dumping Duties (ADD), and Reciprocal Tariffs (up to 33%) could crimp margins.
- Pet Care Scaling: While brand response has been positive, pet care is still in the early phase and won’t turn profitable before FY27.
- Raw Material Prices: Soybean, wheat, and fishmeal prices are seasonal and influenced by MSPs and climate—creating margin variability.
Analyst Calls: What’s Management Saying?
- They expect flat-to-marginal growth in FY26, focusing more on sustainable margins than hyper-scaling.
- Pet care factory construction starts in Sep/Oct 2025, with dog food launch in August 2025.
- They acknowledged export challenges but are proactively diversifying markets and front-loading U.S. ordersbefore duty impacts.
One thing is clear: they’re realistic, transparent, and not chasing growth blindly.
Timing the Stock – When to Reel It In?
Avanti Feeds has already rallied ~30% in recent months, breaking out from a 6-month consolidation. Here’s what to watch:
| Condition | Investor Action |
|---|---|
| Stock cools to ₹850–875 range | Add on dips for long-term |
| CVD & ADD duty review favors India | Trigger for re-rating |
| Pet care revenue crosses ₹25–30 Cr run rate | Structural growth kicker |
| Export market diversification sustains | Earnings stability catalyst |
Avanti Feeds is a rare mix of old-school financial discipline + new-age optionality. It might not double overnight, but for long-term investors seeking low-debt, cash-generating businesses with optional growth triggers, this is a name worth stalking.
Here is the points captured from the concall transcript
Avanti Feeds Ltd. – Strategic & Financial Evaluation (Q4 FY25)
| Parameter | Insights |
|---|---|
| 1. Business Overview | Major player in shrimp feed, shrimp processing & export, and new entrant in pet food (via JV with Thailand’s Bluefalo). FY25 revenue: ₹5778 Cr. Key segments: Shrimp Feed (~80%), Frozen Foods, Pet Care. |
| 2. Revenue Visibility / Order Book | No formal long-term order book (B2B and retail-based), but stable feed consumption (~5.5 L MT), projected exports of ~17,000 MT in FY26. Working closely with U.S. buyers to manage tariff volatility. |
| 3. Capacity Expansion / Capex | Pet care facility construction to start Sep/Oct 2025; dog food launch in Aug 2025. Existing shrimp processing capex (Krishnapuram plant) completed; older plant to be retired for renovation. |
| 4. Operating Leverage | High operating leverage evident – FY25 PBT up by 37% YoY (₹537 Cr → ₹737 Cr), driven by softening raw material prices and better absorption. Feed division margins surged. |
| 5. Market Share Gains | Maintained ~45–50% market share in shrimp feed; exports increased YoY (14,149 MT vs. 13,444 MT). Diversifying away from U.S. to mitigate trade risk – growing Japan, Korea, EU presence. |
| 6. Breakout Product / Segment | Pet food brand “Avant Furst” launched (cat food in Jan 2025, dog food planned for Aug 2025). Early success in retail channels in top cities. ₹10 Cr sales targeted in FY26. |
| 7. Tone / Language Shift | Optimistic but cautious. Strong emphasis on stable profitability, market diversification, and prudent cash usage. Transparency in response to duty-related risks and competitive threats. |
| 8. External Tailwinds / One-Time Gains | Benefit from softening fishmeal & soybean prices. Forex gains from USD conversion also helped margins. Export shipment rush before U.S. tariff deadline supported Q4 sales. |
| 9. Unit Economics Improvement | Fishmeal: ₹91/kg in Q4 FY25 (vs. ₹119 in Q4 FY24), Soyameal: ₹43/kg (vs. ₹52). Gross margins up significantly in feed segment. EBITDA improvement from overhead absorption. |
| 10. Debt / Working Capital | Zero debt company. Uses internal accruals for working capital, saving ~15-20% interest costs. Significant inventory purchases during seasonal windows (e.g., soybean in Oct). |
| 11. Strategic Changes (M&A, JV, Exit) | JV with Bluefalo (Thailand) for pet food – tech transfer, brand rollout in India. No other M&A or divestment in FY25. |
| 12. Profit Doubling Potential (2Y) | Possible but conditional. FY25 PBT: ₹737 Cr. Needs strong export growth + pet food scale-up + stable margins. U.S. tariffs and duty reviews will be key. Pet food profitability expected only post FY27. |
| 13. Risks / Where Mgmt Could Go Wrong | ▪ Heavy dependence on U.S. market (~70% of shrimp exports) ▪ Tariff/CVD/ADD volatility in U.S. ▪ Raw material price spikes ▪ Pet care ramp-up risks (brand acceptance, costs) |
| 14. Analyst Questions Management Couldn’t Answer Clearly | ▪ No clear guidance on working capital quantum usage (~₹1,900 Cr queried) ▪ No numeric forecast for feed margin trend post price cut ▪ Limited transparency on pet food profitability timeline |
| 15. Mind Map of MD (Strategic Focus) | 1. Maintain profitability (15–20% RoCE) despite volatility 2. Prudent cash management over risky capex 3. Pet care scale-up with branding focus 4. Expand beyond U.S. in exports 5. Leverage low-cost sourcing + strong brand loyalty in feed |
