The Indian poultry industry, which faced challenges in the past couple of years due to volatile market conditions is set for recovery in the current fiscal with prices of inputs such as maize and soyabean stabilising aided by demand growth, according to a report.
The CareEdge Ratings anticipates an 8-10 per cent revenue growth for the poultry industry in the current financial year with recovery of 180-220 basis points in operating profit margins, driven by the growing population with changing dietary preferences towards protein-rich foods and softening of input prices.
However, poultry industry remains susceptible to feed prices and disease outbreaks wherein industry players continue to focus on developing breed with lower feed conversion ratio and higher disease resistance and innovations in poultry vaccines, CareEdge said.
Fluctuting fortunes
India is a leading producer of eggs and broiler chicken, with significant growth driven by urbanisation and rising incomes. As of 2024, India ranks among the top producers of eggs and broiler chicken globally, with an annual production of over 140 billion eggs and approximately 4.5 million tonnes of broiler meat, the report said.
The poultry industry’s revenue trend has shown significant fluctuations over the years, reflecting changes in market dynamics and input costs. Post the Covid disruption in FY20, which impacted scale and profitability, the industry saw a strong demand recovery with better realisations. However, this moderated in 2023 and 2024 due to oversupply and increased input costs.
Revenue of key players peaked in 2022 but declined in 2023 and 2024 due to market conditions and rising input costs. “Maize and soybean are the key feed inputs whose prices surged due to supply issues. However, the input prices have stabilised in 2024 with improved harvests and government interventions,” the report said.
Gradual price recovery
Broiler meat prices peaked in early FY2024 but fell later due to oversupply. Prices are expected to stabilise with seasonal demand boosts, it said.
CareEdge Ratings anticipates a gradual recovery in prices as the demand-supply balance improves, with seasonal demand during festive periods and colder months supporting stabilisation.
“The industry players’ credit profile faces earnings volatility, but benefits from investments in value-added products, backward integration, and efficiency improvements. Additionally, maintaining liquid investments and unutilised credit limits, typically ranging from 15-20 per cent of working capital limits, helps players manage short-term fluctuations,” said Akhil Goyal, Director, CareEdge Ratings.
