Poultry sector to see 4-6 pc revenue growth in FY26: Crisil

Mumbai, Nov 11 (PTI) The poultry sector is expected to witness 4-6 per cent growth in revenue during 2025-26, on a steady increase in consumption fuelled by increasing rural demand, higher per capita consumption of meat and growing preference for protein-rich diet, a report said on Tuesday.

Operating margin, however, is likely to slip 80-100 basis points (bps) due to lower broiler prices in the first half of the fiscal, Crisil Ratings said in a report.

Despite the lower profitability, it said, credit profiles of poultry companies are seen as stable, backed by modest capital expenditure, limited debt addition and steady accrual.

The layer or egg segment accounts for 55 per cent of the poultry industry by value, and the broiler segment for the remaining 45 per cent, the report said, adding that in the broiler segment, revenue growth is likely to slow to 1-3 per cent this fiscal due to lower realisations.

"Wholesale broiler prices fell 20 per cent on-year to Rs 110-115 per kg in the first quarter of this fiscal, as a short summer and an early monsoon led to relatively higher bird weights and, hence, a surplus in supply.

"Subsequently, with the onset of the festive season, broiler prices have begun to recover. Yet, average broiler prices will be lower by 4-6 per cent on-year in the current fiscal," Crisil Ratings Director Jayashree Nandakumar said.

Crisil Ratings projected the sales volume in the broiler segment to grow by 6-8 per cent to 5.86 lakh tonne this fiscal.

In the layer or egg segment, the sales volume is seen 4-6 per cent higher to 15,750 crore eggs, even as prices are seen rising by 2-4 per cent amid stable demand, the Crisil Ratings said.

India's per capita consumption of eggs, at 102 per annum, is significantly below the global average of 218, indicating substantial growth potential.

Hence, the egg segment's revenue is poised to grow 7-9 per cent this fiscal.

The blended revenue growth of the poultry industry is expected to be 4-6 per cent in the current fiscal, the report said.

Profitability, however, is seen under pressure as the first half of this fiscal saw broiler prices crash, leading to substantial inventory losses for industry players, who witnessed a 200 bps decline in the operating margin.

In the second half, however, players will be able to minimise losses on account of subsequent recovery in broiler prices and favourable feed costs, the report added.

"Feed prices account for 60-65 per cent of the total material cost, split 1:2 between soy de-oiled cake and maize. This fiscal, soy doc prices are expected at Rs 35-37 per kg, a tad lower than last fiscal, because of oversupply. Meanwhile, owing to increased acreage, maize prices are likely to remain stable at Rs 24-25 per kg despite sustained demand from the poultry and ethanol sectors," Crisil Ratings Associate Director Rishi Hari said. PTI SM SHW