Avanti Feeds' profit falls 55% despite revenue growth

Avanti Feeds Limited (NSE: AVANTIFEED) reported Q2 FY27 revenue of ₹1,752.5 crore, up 8.9% year on year. Net profit declined approximately 55% to ₹69 crore, while EBITDA fell nearly 60% to ₹78 crore. What happened The aquaculture company recorded a sharp deterioration in profitability despite higher revenue. EBITDA margin contracted to 4.45% from approximately 12% in the year-ago quarter. This indicates that the additional revenue is not translating into operating profit at the same rate. The company operates across shrimp feed, hatcheries and shrimp processing, making margins sensitive to input costs, export demand and realisations across the value chain. Why it matters The key concern is not the modest revenue growth. It is the sharp margin compression. A fall in EBITDA of nearly 60% against revenue growth of almost 9% points to substantial pressure on operating economics. For a business with exposure to global shrimp demand, feed costs, farmer economics and export realisations can all influence profitability. The result also shows why revenue growth alone is an insufficient indicator of business performance in this sector. What to watch next Track quarterly EBITDA margin, shrimp feed volumes and processing business profitability. A recovery towards the previous year's margin of around 12% would be a meaningful improvement, but investors should look for evidence across more than one quarter. Stance: Cautious. Revenue growth is positive, but the sharp deterioration in operating profitability needs to reverse before the earnings outlook becomes constructive.