India's poultry industry is set to regain its long-term growth trajectory in the current fiscal (FY27), with revenue expected to rise around 10%, driven by higher prices and steady demand for both eggs and broilers, according to a Crisil Ratings report released on Wednesday. The improved earnings are also expected to support profitability and keep the sector's credit profile stable despite rising feed costs.
The report, based on an analysis of 34 Crisil-rated poultry companies with a combined revenue of about Rs 12,410 crore in FY26, said the industry had experienced a subdued performance last fiscal but is now poised for recovery through a combination of better realisations and steady consumption demand.
According to Crisil, operating margins are expected to improve by 50-70 basis points (bps) this fiscal after declining by 50 bps last year. The recovery will be supported by stronger product prices despite a projected increase in feed costs. The report also noted that modest capital expenditure, limited incremental borrowing and healthy internal accruals would help maintain stable credit metrics.
Eggs to Lead Growth
The egg segment, which contributes 58-60% of the poultry industry's value, is expected to remain the primary growth driver. Crisil said eggs continue to be an affordable source of protein with broad-based consumer demand. It also highlighted India's significant untapped growth potential, noting that annual per capita egg consumption in the country stands at 106 eggs, well below the global average.
The report projects 4-6% growth in egg consumption this fiscal, accompanied by a similar increase in prices to Rs 5.6-5.8 per egg. As a result, revenue from the egg segment is expected to increase by 9-11%, compared with 9% growth in the previous fiscal.
Broiler Segment to Recover
Revenue growth in the broiler segment is expected to recover to 8-10% in FY27 from 5% last fiscal. Broiler volumes are likely to grow by 2-4%, supported by improving rural demand, rising per capita meat consumption and increasing preference for protein-rich diets. Short supplies are expected to push up bird prices during the year.
Explaining the price outlook, Jayashree Nandakumar, Director, Crisil Ratings, said a short summer and early monsoon had resulted in excess supply last fiscal, leading to nearly 20% year-on-year decline in broiler prices.
"A short summer and early monsoon resulted in a surplus and, consequently, a ~20% on-year decline in broiler prices last fiscal. This led to lower placement of birds towards the end of the fiscal, which, in turn, drove up prices in the first quarter. Moreover, given forecasts of El Niño conditions, bird weights are likely to be lower this year, leading to short supply and average prices of Rs 120-125 per kg this fiscal, compared with Rs 115-120 per kg last fiscal," she said.
Crisil expects these higher prices along with steady volume growth to lift overall industry revenue by about 10% in FY27.
Feed Costs to Rise
Feed remains the largest cost component for poultry producers, accounting for 60-65% of total input costs. Soybean de-oiled cake (DOC) and maize are the principal ingredients in feed, mixed roughly in a 1:2 ratio.
Rishi Hari, Associate Director, Crisil Ratings, said maize prices are likely to rise moderately because of expected El Niño conditions, while soybean DOC prices should remain stable due to adequate supplies.
"The remaining 10% of feed components, primarily vitamins and husk, are imported and will become costlier due to higher logistics expenses caused by the West Asia conflict. Consequently, average feed costs are projected to rise 3-5% to around Rs 77 per kg this fiscal," he said.
According to the report, feed prices are estimated at Rs 77 per kg in FY27 compared with Rs 74 per kg in FY26, while average broiler prices are projected to rise to Rs 123 per kg from Rs 117 per kg during the same period.
Credit Profile to Remain Stable
The report said stronger profitability and revenue growth would generate higher cash accruals, enabling poultry companies to meet increased working capital requirements arising from higher feed costs. It noted that post-pandemic capacity expansion has created sufficient production capacity, reducing the need for significant debt-funded investments over the medium term.
As a result, Crisil expects the industry's interest coverage ratio to remain comfortable at 3-4 times, while leverage is likely to stay around 2 times next fiscal. However, the rating agency cautioned that volatility in feed costs, fluctuations in egg and broiler prices, and potential bird flu outbreaks remain key risks for the sector.