Poultry sector revenue to grow by 10%

Revenue of the Indian poultry sector will grow by 10% this fiscal on account of sustained demand growth amidst moderating realizations. Poultries have also undertaken 8-10% capacity addition.

The poultry sector in India is likely to witness an increase in revenue, in the current fiscal. According to a report by the rating agency CRISIL, due to a sustained increase in demand amid moderating realisations, the revenue of the India’s poultry sector will grow by 10% this fiscal.

The report said, “growth will be on a high base set by the ~25% topline surge last fiscal.”

As per the CRISIL report, besides the growth in revenue, the operating profitability in the poultry sector is also expected to rebound. As the input feed costs are expected to drop on account of softer soy and maize price the operating profitability will get better by 70 basis points (bps) during the fiscal. 

“This will help strengthen credit profiles despite additional debt set to be contracted for capacity increase over the medium term,” CRISIL Ratings said.

Mr. Himank Sharma, Director, CRISIL Ratings informed, “Consumption of broiler meat and eggs is seen rising to ~5.2 lakh tonne (up 11-13% on-year) and 150 billion (up 6-8%), respectively. This is led by improvement in rural demand, higher per-capita consumption of meat, and increasing preference for protein-rich diet. Increased volumes will support sectoral revenue growth despite dampening realisations.”

The report highlighted that the increased revenue and profitability will allow companies to internally fund incremental working capital requirement. Though the poultries have initiated 8-10% capacity addition (which is partly debt-funded), the capacity added in the last two quarters of previous fiscal will also result in a quick growth, this fiscal.

CRISIL Ratings said it analyzed 45 poultries generating approximately Rs. 15,000 crore revenue last fiscal.