Date: May 26, 2026

Operational Expansion Details

Poultry Farm Expansion:

  • Company is establishing additional layer bird capacity of 20 lakh birds
  • Total owned poultry farm capacity increases to 24 lakh layer birds
  • Construction using Environmental Control Shed (EC shed) technology
  • Construction period: 2.5 to 3 years
  • Current egg production in open sheds: 13.50 crore eggs
  • Post-expansion production: Approximately 62 crore eggs (5x increase)
  • Replaces existing open sheds that are over 16 years old

Feed Mill Expansion:

  • New Feed Mill to cater to nutritional requirements of additional 20 lakh layer birds
  • Expected cost efficiencies: 15% to 20% reduction in feed cost through in-house production
  • Reduces dependency on external procurement of poultry feed

Bio-Gas Division Expansion:

  • Adding 2 more Digestors to existing 2 Digestors
  • Leads to savings in coal cost in egg powder division
  • Generates sales revenue from Compressed Bio-Gas (CBG)

Financial Details

Project Cost Structure:

  • Total project expenditure: Approximately ₹400 crores
  • Internal accruals/bank deposits funding: ₹100 crores
  • Bank borrowings: ₹300 crores
  • Interest rate after subvention: 4.5% to 4.7% net effective rate
  • Company eligible for 3% interest subvention from Ministry of Animal Husbandry (subject to change)
  • Current investment returns on deposits: 7.5% to 8%

Cost Savings Analysis:

  • Construction cost savings: ₹60 crores (from locking contracts at current rates)
  • Avoided land acquisition cost: ₹70-80 crores (using existing premises)
  • Cumulative savings expected: Nearly ₹150 crores in project cost and operational costs
  • Construction cost escalation avoided: 40-45% potential future increase
  • Current construction cost inflation: 40-50% over past 2.5 years (steel prices and infrastructure)

Financial Projections:

  • All operational financial ratios projected to be good compared to last actuals
  • More than comfortable DSCR for repayment of Term Loan with Interest
  • Project expected to strengthen profitability through substantial cost reductions

Strategic Rationale

Construction Strategy:

  • Company locked construction contracts at prevailing rates to avoid future 40-45% cost escalation
  • Strategic negotiation to insulate from anticipated inflationary pressure over next 2.5 years

Location Strategy:

  • All expansion within existing poultry farm premises
  • No new land acquisitions undertaken

Funding Strategy:

  • Prudent use of low-cost bank financing instead of utilizing high-yielding capital (7.5-8% returns)
  • Designed for capital optimization and financial prudence

Overall Impact

  • Project implementation with exceptional financial discipline and operational efficiency
  • Expected to deliver substantial long-term benefits through economies of scale
  • Significant reduction in overall egg production cost anticipated
  • Strengthening of Company's profitability, operational resilience, and financial position

Additional Context

  • Company released audited financial statements for Q4 cum FY25-26 on May 22, 2026
  • Held teleconference with shareholders and analysts on same day to discuss financial performance and strategic outlook
  • This disclosure responds to shareholder interest in the expansion project