India's poultry industry is likely to witness a revenue growth of over 30 per cent to reach Rs 2,50,000 crore this fiscal following steady growth in demand and higher realisation, a report said on Thursday. However, elevated feed costs will shrink operating margin, Crisil Ratings said in a report.
The poultry industry revenue growth, set to be over 30 per cent to reach Rs 2,50,000 crore this fiscal, would be largely attributable to higher prices, as capacities remain constrained, the report said. In the past two fiscals, poultry farms had restricted capacity addition amid the Covid pandemic, it said.
Consequently, consumption growth in meat and eggs was just 5 per cent and 4 per cent at 4.3 lakh tonne and 120 billion, respectively, during the last fiscal over FY21, it noted. With demand continuing to be robust because of rising population, higher per-capita consumption of meat and increasing preference for protein-rich diet, poultries have been operating at near-full capacity utilisation, the Crisil Ratings report said.
Also, it said, with the hotels, restaurants, and cafes (HORECA) segment now going at full tilt, demand is outstripping supply, leading to higher wholesale price for broiler chicken. The price of broiler meat is expected to average Rs 135-140 per kg this financial year, a 30 per cent year-on-year increase from the average price of Rs 104 per kg last fiscal.
On the other hand, prices of maize and soymeal, key poultry feeds, have shot up almost 35 per cent due to supply crunch, and are unlikely to ease during the year, it said, adding that this will lead to lower margins for a second consecutive fiscal year. "Realisation will continue to be robust given strong demand for broiler meat. The onset of the festive season in the third quarter will also support demand. Although higher input costs will dent Ebitda margin by 50-60 bps to 5.7 per cent this fiscal, it would still be on a par with the pre-pandemic levels," Crisil Ratings Director Himank Sharma said.
Meanwhile, poultries are expected to increase capacity by 12 per cent this fiscal because of strong demand and near-full capacity utilisation, it said. These capacities are expected to come on stream early next fiscal given that it requires just 3-6 months to set up such facilities and turn them fully operational, the report added.
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