INDIA – Venky’s India, a poultry industry heavyweight, reported a substantial increase in its first-quarter profit, nearly quadrupling its earnings compared to the same period last year.
The Pune-based poultry giant attributed this surge to a significant reduction in input costs and steady performance in its core poultry business.
The company’s shares soared by 16% following the announcement, reflecting investor confidence.
For the quarter ending June 30, Venky’s India posted a profit of 751.8 million rupees (approximately US$9 million), a dramatic rise from the 194.1 million rupees (US$2.3M) recorded in the same quarter of the previous year.
The company’s strong performance in the poultry segment, particularly from the sales of day-old chicks and broiler birds, played a crucial role in this profit jump.
These birds, reared specifically for consumption, saw improved realizations, bolstering the company’s financial results.
A significant factor in Venky’s profit surge was the sharp decline in input costs.
The company saw a 33% drop in the costs associated with key poultry feed ingredients like soy and maize.
This reduction in feed costs contributed to an overall 25% decrease in expenses, further enhancing the company’s profitability.
Revenue from Venky’s poultry and poultry products business, which accounts for about 64% of the company’s total sales, increased by nearly 18% year-on-year.
However, despite the strong performance in poultry, the company’s overall revenue declined by 17%.
This decrease was largely driven by a 51% drop in its oilseed segment, which contributes to 29% of Venky’s total revenue.
The oilseed segment, which includes the sale of edible oil derived from processed soy, faced challenges due to lower sales volumes and weaker realizations from finished products such as de-oiled cake and oil.
Venky’s acknowledged that these factors had negatively impacted the margins in this segment.
Founded in 1976 as Western Hatcheries Ltd, Venky’s India initially focused on producing day-old layer and broiler chicks for the northern Indian poultry market.
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