ICRA Anticipates 8-10% Revenue Growth for Indian Poultry Industry in FY2024

ICRA has maintained its expectations for robust revenue growth at approximately 8-10% in the domestic poultry industry for FY2024. The key drivers include substantial volume expansion and a notable uptick in the market share of organized players, signaling positive trends for the sector.

Following a surge in demand in the current fiscal year, there has been a noteworthy enhancement in average realizations, reaching approximately Rs 107/kg in H1 FY2024 compared to Rs 101/kg in FY2023 (Rs 96.5/kg in H2 FY2023). The upcoming festive season and cold weather are anticipated to bolster demand and further improve realizations in the remaining part of FY2024.

Sheetal Sharad, Vice President, and Sector Head, ICRA

Sheetal Sharad, Vice President, and Sector Head, ICRA Ltd, released a statement saying, “While realizations improved in H1 FY2024 following controlled supply and healthy demand, players’ earnings were further supported by softened feed costs. Maize (which comprises 60-65% of the feed cost) prices declined by 9% over H1 FY2023 and those for soybean (comprising 30-35% of feed cost) reduced by 21% over H1 FY2023. While the raw material pricing has been favourable so far, substantial contraction in soybean harvest during the kharif season and delayed sowing of maize raise concerns about the potential spike in feed costs, which is likely to exert pressure on the margins of poultry companies.”

The ICRA note read that limited occurrences of avian influenza or bird flu have been recorded across the country in the current fiscal year. Localized incidents in Kerala and Jharkhand during Q4 FY2023 and Q1 FY2024, which were contained, had minimal impact on demand and realizations in those regions. The upcoming months are crucial as winter increases the risk of disease outbreaks.

However, in October 2023, the World Organisation for Animal Health (WOAH) endorsed India's self-declaration of freedom from Highly Pathogenic Avian Influenza (HPAI), specifically approving farms in Maharashtra, Tamil Nadu, Uttar Pradesh, and Chhattisgarh. This approval is anticipated to open new avenues for Indian poultry companies in the global market in the medium to long term.

In September 2023, India and the US collaboratively addressed the longstanding poultry dispute, potentially paving the way for the entry of US poultry products into the Indian market. This development has the potential to heighten competitive pressures, impacting realizations in the poultry sector. The degree of the adverse impact is subject to ongoing monitoring.