CRISIL: India’s poultry sector to grow 4–6% despite margin dip
| Photo Credit:
G N Rao / The Hindu
The poultry sector in India will see revenue increase by 4-6% this fiscal, driven by steady consumption growth, fuelled by rising rural demand, higher per capita meat consumption, and a growing preference for a protein-rich diet, according to CRISIL Ratings.
Operating margin, however, will slip 80-100 basis points (bps) because of lower broiler prices in the first half of the fiscal, partly mitigated by a subsequent recovery in broiler prices and favourable feed costs throughout the year.
Margins take a knock
Despite lower profitability, the credit profiles of poultry companies are seen as stable, backed by modest capital expenditure, limited debt addition, and steady accruals, CRISIL said in a release. An analysis of 34 such companies rated by us, with cumulative revenue of around Rs 10,815 crore last fiscal, indicates as much, it added.
The layer/egg segment accounts for 55 per cent of the poultry industry by value, and the broiler segment for the remaining 45 per cent. In the broiler segment, revenue growth is likely to slow to 1-3% this fiscal due to lower realisations.
Jayashree Nandakumar, Director, Crisil Ratings, said, “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% on-year in the current fiscal.”
Egg segment outperforms
Sales volume in the broiler segment is expected to grow 6-8 per cent to around 5.86 lakh tonne this fiscal. In the layer/egg segment, sales volume is up 4-6 per cent to around 15,750 crore eggs, even as prices are rising steadily 2-4 per cent amid stable demand.
India’s per capita egg consumption, 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 by 7-9% this fiscal, according to CRISIL.
The blended revenue growth of the poultry industry is expected to be 4-6% in the current fiscal year. Profitability, however, is under pressure. The first half of this fiscal saw broiler prices crash, leading to substantial inventory losses for industry players and, thereby, a 200 bps decline in operating margins. In the second half, however, players will be able to minimise losses due to subsequent recovery in broiler prices and favourable feed costs.
Feed costs offer relief
Rishi Hari, Associate Director, Crisil Ratings, “Feed prices account for 60-65% of the total material cost, split 1:2 between soy de-oiled cake and maise. This fiscal, soy de-oiled cake prices are expected at Rs 35-37 per kg, a tad lower than last fiscal, because of oversupply. Meanwhile, owing to increased acreage, maise prices are likely to remain stable at Rs 24-25 per kg despite sustained demand from the poultry and ethanol sectors.”
Hence, for the full year, players’ profitability is expected to decline by 80-100 bps.
Favourable feed costs also help manage working capital requirements without any major increase in inventory.
Credit outlook steady
Despite a dip in profitability, credit profiles will remain stable due to low incremental debt and strong balance sheets. The interest coverage ratio and leverage are likely to remain steady at 3.0-3.2 times and 1.3 times, respectively, this fiscal. Volatility in feed costs and broiler and egg prices, as well as bird flu outbreaks and slower-than-expected consumption growth, will warrant close monitoring, CRISIL said.
Published on November 11, 2025
