(Reuters) -Venky’s India swung to a loss in the second quarter as lower pricing in its poultry business led to shrinking margins, sending shares down 7.4% after the results.
The Pune-based poultry firm reported a net loss of 265.3 million rupees in the quarter ended September 30, compared to a profit of 77.6 million rupees a year ago.
The stock is set for its worst one-day drop in a year, if losses hold.
Venky’s poultry and poultry products business has been impacted for months by lower market pricing of broiler birds, which are sold to either farmers for rearing or processed for consumption.
Firms such as Venky’s are also impacted seasonally, usually during the second and third quarters, when multiple Hindu festivals limit meat and egg consumption, leading to a months-long overhang, the company has said in prior earnings calls.
The second quarter saw the nine-day Hindu festival of Navratri, during which those who celebrate can refrain from eating meat.
In the poultry segment, revenue dropped 18.62% year-on-year. Poultry and related products make up 44% of the company’s overall revenue.
The sales drop in the poultry segment, partly offset the 36.8% growth in Venky’s oilseed segment.
Venky’s processes soya to make edible oil, which it sells in bulk to traders, and de-oiled cake, which it sells as poultry feed to manufacturers.
Overall revenue grew 3.4%, outstripped by 9.4% rise in expenses.
The company is foraying into ready-mix spice powders.
(Reporting by Ananta Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee)
