Avanti Feeds vs Sutlej Textiles and Q3 FY26

AV

Avanti Feeds

Q3 FY26 · Other

Avanti Feeds reported Q3 FY26 consolidated gross income of ₹1,447 crore, up 3% YoY but down 13% sequentially, reflecting seasonal feed volume decline. PBT grew 21% YoY to ₹222 crore, aided by lower raw material costs in feed and improved realizations in processing. Feed division PBT margin was 16% for 9M FY26, but management expects full-year PBT margin to moderate to 14.5-15% due to rising fish meal and soybean meal prices. Processing division saw 39% YoY revenue growth, driven by higher volumes and better realizations. The US tariff situation has improved with the removal of IEEPA-based duties, though a 10% import surcharge remains. Pet care sales reached ₹1.36 crore in Q3, with a manufacturing facility under development. Guidance for FY27 is preliminary, with expectations of 10%+ feed volume growth. Key risk: sustained raw material inflation could compress margins in Q4.

Guidance read

FY26 feed sales target of ~5,55,000 MT: Management expects full-year feed sales volume to reach around 5,55,000 MT, implying strong Q4 volumes. FY26 PBT margin guidance of 14.5-15%: Full-year PBT margin expected to be 14.5-15% for the feed division, down from 16% in 9M due to raw material cost pressures. FY26 processing export target of ~16,500 MT: Shrimp processing exports are estimated at 16,500 MT for FY26, up from 14,149 MT in FY25. Feed volume growth of at least 10% in FY27: Management expects minimum 10% growth in feed sales volume in FY27, driven by positive farmer sentiment and expanded culture area.

Risk read

Key risks include Rising raw material prices — Fish meal and soybean meal prices have increased sharply, with fish meal at ₹145/kg currently, which could compress feed margins in Q4.; US tariff uncertainty — Although IEEPA tariffs were removed, a new 10% import surcharge under Section 122 has been imposed, with potential increase to 15%, creating ongoing uncertainty for exports.; Pet care project execution delay — The pet food manufacturing facility is still in design and approval stage; management could not provide a clear timeline for commissioning, indicating potential delays.; Competition from e-commerce private labels — Amazon has launched its own pet food brand, which could pose a threat to Avanti's online sales channel, though management downplayed the risk..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Sutlej Textiles reported Q3 FY26 standalone revenue of INR 640 cr, down 2% YoY, but EBITDA surged over 200% YoY to INR 25 cr with margin expansion of 350 bps to 4%. PAT remained negative at INR -11 cr. The improvement was driven by cost optimization initiatives (30-40% of targeted savings achieved), product mix shift towards value-added yarns, and market diversification into Far East and Africa, reducing Bangladesh concentration. Home textiles order book provides visibility through Q1 FY27. Management expects Q4 to show continued sequential improvement, with full benefits of cost savings and renewable energy tie-ups (from Q1 FY27) flowing in over 2-3 quarters. Key risk: raw material price volatility, especially cotton, which rose 7-8% during the quarter and could pressure margins if not passed through.

Guidance read

Q4 FY26 sequential improvement in profitability: Management expects Q4 to be better than Q3, with continued momentum in operating margins. Cost savings target 40% achieved, full benefit in 2-3 quarters: Employee rationalization and process improvements have delivered ~40% of targeted annual savings; remaining benefits expected over next 2-3 quarters. Renewable energy benefits from Q1 FY27: Tied up for renewable energy; benefits expected to accrue from Q1 FY27, reducing energy cost (40% of yarn conversion cost). Home textiles order book visibility through Q1 FY27: Order book for home textiles provides visibility of ~120 days, i.e., through Q1 of next fiscal.

Risk read

Key risks include Raw material price volatility — Cotton prices increased 7-8% during the quarter; volatility in cotton and polyester prices can pressure margins if not passed through.; Bangladesh trade disruption — Bangladesh logistical issues have impacted yarn exports; management reduced exposure but uncertainty remains until elected government takes charge.; Global demand uncertainty and tariff risks — US-India trade situation and potential tariffs could affect export volumes; management notes real benefits may take two quarters to materialize.; Margin pressure in yarn business — Yarn segment EBITDA was only INR 1 cr despite contributing majority revenue; raw material inflation and competition keep margins under pressure..

Promise ledger

Scorecard data is being built as historical quarters are processed.