Poultry Industry New Delhi/UNI: The revenue of the Indian poultry industry is expected to grow at 5-6 per cent in financial year 2022, compared to 2-3 per cent growth witnessed by ICRA's sample set of 10 large poultry integrators in FY 2021, the rating agency said on Tuesday.
Continued demand supported by opening up of hotels and restaurants and uptick in broiler realisations will support this growth, it said.
The industry demand-supply has been less impacted by two waves of the Covid-19 pandemic.
However, industry margins are expected to contract sharply in FY 2022 amid high average input prices led by heating up of soybean prices.
The players' earnings are also expected to be supported by favourable long-term demand outlook, the agency said. Sheetal Sharad, Vice President and Sector Head, ICRA, said: “The industry is sensitive to variations in input prices, mainly feed which accounts for 70 per cent of the variable costs. We expect industry margins to take a hit led by spike in soybean and maize prices on an average in FY 2022.''
"While many players faced net losses for H1 FY 2022, subsequent softening of soybean prices following the government's actions and new crop supply provided some respite. However, recent geopolitical tensions have heated up soybean prices yet again. In this backdrop, adequate inventory levels of favorably priced feedstock may help players arrest margin contraction to some extent,'' she said.
''For FY 2022, ICRA expects the industry operating margins to contract sharply by 350 to 450 bps Y-o-Y. While higher than normal feed prices will severely impact earnings in FY 2022, in the absence of any large debt-funded capital expenditure, moderation in debt protection metrics shall be restricted primarily to the earnings impact for FY2022,” Sheetal said in a report published by ICRA on Poultry Industry.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
