Venky's Q3 net slumps 81% on fall in poultry realizations

Moneycontrol Bureau

Venky's India's third quarter net profit plunged 81% year-on-year to Rs 2.93 crore as over-production in industry hurt realizations in its poultry and poultry products business. Rise in input costs also further added to pressures.

The Pune-based processed chicken maker reported net sales of Rs 250.28 crore, up 19% from a year ago.

"Our profits have been affected mainly by the poultry business. Realizations in poultry business were lower during the quarter. Also our interest costs have increased and raw material costs have also gone up," AG Bauskar, CFO, told moneycontrol.com.

Venky's tumbled 10% post the disappointing results. At 13:30 hrs, the stock was down 8.6% at Rs 432.70 on NSE.

Bauskar said over-production in the market had led to 10-15% lower realizations for poultry and poultry products.

In the poultry & poultry products business, profit before interest and tax (PBIT)halved to Rs 8.76 crore. The segment revenue was up 24% from a year ago to Rs 182.9 crore.

The company is seeing some pickup in realizations in the current (Jan-March) quarter, he said.

Realizations apart, Venky's cost of raw materials went up near 25% from a year ago to Rs 158.84 crore in the third quarter.

Its interest costs more than tripled to Rs 3.37 crore in the quarter. Interest costs have increased as interest rates have as such gone up over the last one year and its quantum of borrowing also rose, Bauskar said.

Venky's other businesses too saw profits decline. Its PBIT in animal health products was down 15% year-on-year to Rs 3.92 crore, while revenue rose 3% to Rs 23.66 crore.

PBIT in Venky's oilseed business dropped 11% to Rs 3.7 crore. Oilseed revenue was up 9% to Rs 62.02 crore.

Nachiket Kelkar
nachiket.kelkar@network18online.com