IFB Agro warns of headwinds across alcohol, aqua feed businesses

Kolkata, Jul 7 (PTI) IFB Agro Industries Ltd has warned that the current financial year will be "a year of challenges" for its alcohol business, citing excess production capacity, rising input costs and alleged interference by West Bengal excise authorities, even as the company posted a 24.25 per cent rise in consolidated revenue in FY26. The company, in its latest annual report, also flagged margin pressure in its newly acquired aquaculture feed business and geopolitical uncertainties affecting marine exports. Consolidated gross revenue from operations rose to Rs 1,911.57 crore in FY26 from Rs 1,538.49 crore a year ago. Despite the improved financial performance, the management devoted much of its outlook to headwinds facing its key businesses. In the alcohol business, IFB Agro said rapid expansion of ethanol distilleries in West Bengal, many with dual Extra Neutral Alcohol (ENA) production facilities, had intensified competition and eroded distillery margins. Oversupply also depressed prices of ENA, Ordinary Denatured Spirit (ODS) and by-products such as distillers dried grains with solubles (DDGS) and carbon dioxide. "The current financial year will be a year of challenges for the alcohol business," the company said, attributing the outlook to excess ENA capacity in the state, rising prices of non-edible grain and continued pressure on by-product realisations. The company also alleged that production at its distillery was intermittently disrupted as customers were reluctant to lift material because of "illegal methods adopted by the State Excise authorities". It said repeated representations to the Excise Commissioner and the then chief minister over the alleged actions, including complaints pending since 2020, had not yielded any action. Its Indian Made Liquor (IML) business also remained under pressure after repeated excise duty hikes, including one effective December 1, 2025, pushed up retail prices and shifted demand towards smaller packs. The company further alleged "illegal interference" by excise authorities at the district level, saying retailers were being pressured not to lift IFB-branded products. Chairman Bikramjit Nag echoed those concerns in his message to shareholders, expressing hope that the new state government would act against those allegedly involved and help create a more conducive business environment in West Bengal. In the 2026 assembly elections, the BJP came to power in West Bengal, defeating the Mamata Banerjee-led TMC which had ruled the state for 15 years. In the marine business, IFB Agro said exports rose to Rs 273 crore from Rs 213 crore despite US tariffs on shrimp imports, aided by its relatively limited dependence on the American market. However, it said non-availability of raw shrimp in West Bengal for nearly six to seven months each year remained a structural challenge, while geopolitical uncertainties had increased freight costs and shipping delays. The company also said its recently acquired aquaculture feed business was operating in a challenging environment, with elevated raw material costs and industry-wide margin pressure. It added that the Andhra Pradesh government's refusal to permit higher shrimp feed prices prevented the company from passing on increased input costs and was likely to remain a challenge in FY27. During FY26, IFB Agro acquired the shrimp and freshwater fish feed business of Cargill India Pvt Ltd for Rs 110 crore plus working capital. The company ended FY'26 with Rs 70 crore in debt and Rs 183 crore in cash. Meanwhile, IFB said it is evaluating two to three new growth projects in glycerine and biogas and expects to finalise at least one by the third quarter of the current financial year. The company said its value-added seafood project in Vietnam commenced initial commercial operations during the year, with the first shipment made in April 2026. IFB Agro said it will focus on scaling up the business and achieving break-even in the current financial year. PTI BSM NN