Poultry sector's revenue is expected to grow by 10% in FY24, a report says

According to the report, the revenue of the Indian poultry sector will grow 10 percent this fiscal on the back of sustained demand growth amid moderating realisations, even as new capacities come on stream and drive-up volume.

"Consumption of broiler meat and eggs is seen rising to 5.2 lakh tonnes (up 11-13 percent year-on-year) and 150 billion (up 6-8 percent), respectively.

"This is led by improvement in rural demand, higher per-capita consumption of meat, and increasing preference for protein-rich diets. Increased volumes will support sectoral revenue growth despite dampening realisations," Crisil Ratings Director Himank Sharma said.

Further, the report said that broiler meat realisation is likely to drop 6-8 percent year-on-year to Rs 114-116 per kg this fiscal largely on account of increased supplies with new capacities coming onstream.

However, poultry feed costs, driven largely by maize and soy, may moderate from their highs seen last year, which should prop up operating margins to over 5.5 percent - 70 bps higher on a year-on-year basis, it said.

While poultries have undertaken 8-10 percent capacity addition (partly debt-funded), with demand remaining firm, the capacity added in the last two quarters of the previous fiscal will also see a quick ramp-up this fiscal.

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"Hence, deleveraging is expected to continue in the poultry sector, supported by improving volumes and healthy profitability. The addition in debt will not have a bearing on financial risk profiles," Crisil Ratings Director Jayashree Nandakumar said.