Avanti Feeds: Revenue grows, but profit takes a sharp hit

Avanti Feeds Limited reported a challenging Q2 FY27, with net profit declining 55% year on year to ₹69 crore, despite revenue increasing 8.9% to ₹1,753 crore. The bigger concern is the sharp fall in operating profitability. EBITDA dropped nearly 60% to ₹78 crore, compared with ₹194 crore in the corresponding quarter last year. EBITDA margin also contracted to 4.45% from 12.04%. This is a significant deterioration. Revenue growth suggests that business activity has continued, but the decline in EBITDA indicates that the company is facing pressure at the operating level. The company also reported a one-time loss of ₹17 crore during the quarter. While this contributed to the weak performance, the sharp reduction in EBITDA means investors should look beyond the exceptional item. Avanti Feeds operates in the shrimp feed and seafood processing business, where profitability can be influenced by raw material prices, export demand, shrimp prices and global market conditions. My view: The quarter raises questions about near-term earnings visibility. I would wait for signs of margin recovery before becoming constructive on the numbers. Revenue growth alone is not enough when operating profit is falling at this pace. **What I would track next:** 1. Recovery in EBITDA margins. 2. Raw material cost movement. 3. Export demand and seafood processing volumes. 4. Management commentary on the next quarter. The next few quarters will be important in determining whether this is a temporary margin setback or a more prolonged earnings challenge. Disclaimer: This post reflects my independent analysis based on publicly available information and is shared for educational and informational purposes. AVANTIFEED