and farmers) is likely to be impacted in the fourth quarter of 2020-21 and the first half of 2021-22, added Joshi.
This is seen having a negative impact for Venky’s (India), which generates a bulk of its overall revenue from this segment.
Godrej Agrovet could also witness pressure on its animal feed and poultry business. However, the impact could be relatively less due to its diversified model, which also includes businesses such as crop protection, dairy and vegetable oils, among others.
Notably, bird flu
viruses have been circulating worldwide for centuries, with four known major outbreaks recorded in the last century. This time around, Europe, South Korea, and Japan have also reported cases of bird flu. France, for instance, is culling over half a million poultry birds, news reports suggest.
Typically, such events have been followed by a period of 9 to 12 months of reduced consumption and lower prices of poultry products before recovering gradually.
However, while near-term financials of poultry-linked companies
may get impacted, there is a positive spin, too, from a long-term perspective. Joshi says, this may turn out to be a positive in the medium- to long-term as consumers migrate towards premium, packaged products aiding the organised players to gain market share.