Avanti Feeds expects $15-20M US tariff refund, reverses earlier stance
The import-of-record move could boost cash flows; guidance for FY27 projects 10-15% growth despite 43% fishmeal inflation.
What's new
- Avanti now expects to keep $15-20M in US tariff refunds, reversing earlier guidance that it would pass them to customers.
- FY27 guidance: 10-15% consolidated growth, 580,000 MT feed sales, 19,000 MT shrimp exports.
- Fishmeal costs surged 43% YoY; feed prices to rise within 10 days; pet food capacity ramping to 800 MT by year-end.
Why this matters
The tariff refund reversal is a genuine surprise: a direct cash-flow benefit of up to $20M for a company with zero debt. But raw material inflation is eating into feed margins, and FY27 growth is modest. The pet food expansion offers optionality, but near-term headwinds remain.
What we're watching
- When the refund actually arrives and whether it hits guidance.
- Feed volume: 580,000 MT is ambitious if inflation persists.
- Pet food ramp: can it reach 800 MT by year-end?
The full read
Avanti Feeds just shifted its stance on US tariff refunds. The company now expects to keep $15-20M in duty credits dating to April 2025, having opened a US bank account as importer of record. That's a clean cash-flow win for a debt-free company with a market cap of ₹14,443 cr. But FY27 isn't coasting. Management guided for 10-15% consolidated growth, targeting 580,000 MT in feed sales and 19,000 MT in shrimp exports. The catch: fishmeal costs are up 43% year-on-year, and feed prices are going up again within 10 days. The pet food business is scaling (near-term capacity of 150 MT, year-end target of 800 MT) but that's a small contributor today. The refund is the real story. The rest is execution against inflation.
Questions answered
- Why is the tariff refund a departure from prior guidance?
- Avanti previously indicated any US tariff refunds would be passed to customers. Now, as importer of record, it has opened a US bank account to receive the credits itself, implying it will retain them.
- How does the FY27 revenue target compare with recent growth?
- Trailing revenue growth was 6.2%, so the 10-15% target implies acceleration. But PAT fell 11.7% in the trailing period, and fishmeal costs are up 43% YoY.
- What is the scale of the pet food capacity expansion?
- Current near-term target is 150 MT; by year-end, management targets 800 MT. The company hasn't disclosed current pet food revenues.
- How does fishmeal inflation affect Avanti's feed business?
- Fishmeal is a key raw material. With costs up 43%, the feed division plans further price increases within 10 days, but timing and demand elasticity are risks.