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Avanti Feeds shares shed over 6% after management flags demand concerns

Avanti Feeds shares shed over 6% after management flags demand concerns

Avanti Feeds shares shed over 6% after management flags demand concerns
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By CNBCTV18.com Nov 22, 2022 11:07:05 AM IST (Updated)

A weak second quarter for Avanti Feeds was a result of delayed commissioning of the new feed plant and inflation in key input costs.

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In a post-earnings conference call with investors on Friday, Avanti Feeds said that it saw demand concerns emerging in the US, Europe, and China. Farmers are considering a crop holiday in the first half of the calendar year 2023, which can hurt feed demand, according to the management
A weak second quarter for Avanti Feeds was a result of delayed commissioning of the new feed plant and inflation in key input costs.
The company admitted to losing market share during the quarter, adding that it failed to capitalise on the strong demand for shrimp feed. State government pricing was also a major pullback.
A similar sentiment was echoed by Godrej Agrovet, who mentioned that price caps imposed by the government of Andhra Pradesh and Bangladesh were one of the reasons behind the underperformance of its Animal Feed business.
“Unfortunately, poultry feeds used to be the most profitable product. But in the first half, it has become a loss-making product. That hurt us a lot in Bangladesh,” MD Balram Singh Yadav said during the earnings call.
For the September quarter, Avanti Feeds reported a 7.8 percent revenue growth and a 71 percent jump in net profit owing to a low base.
Shares of Avanti Feeds ended 6.1 percent lower at Rs 398.
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