Working capital as a strategic lever in India’s animal feed industry
22 Apr 2026
Working capital as a strategic lever in India’s animal feed industry
Working capital is a critical efficiency lever in the animal feed industry, with a significant portion of capital continuously tied up across raw materials, receivables, and supplier payments. For feed manufacturers, the discipline with which this cycle is managed directly influences liquidity, cost structures, and margin resilience.
As a result, differences in how companies manage procurement timing, credit exposure, and supplier terms increasingly define their ability to sustain margins and navigate volatility.
Drivers of Working capital pressure in animal feed
Working capital requirements in feed manufacturing remain elevated, with capital continuously tied up within operations. This makes capital management inherently complex, with outcomes varying significantly based on how companies navigate procurement, credit, and supplier dynamics.
This is further shaped by three structural factors:
Input price volatility and procurement timing
Feed cost forms ~70% of poultry production cost, with maize and soybean together accounting for 90-95% of input costs, making margins highly sensitive to commodity movements.
Prices have been sharply volatile - Maize declined from INR 2,600 per quintal in Jan’25 to INR 1,900 per quintal in Apr’26, while soybean meal fell from INR 51,000 per MT in Nov’23 to INR 34,000 per MT in Apr’25, making input costs difficult to predict and procurement decisions highly timing-dependent.
Procurement is also highly seasonal, with narrow procurement windows (maize: Oct–Dec; soybean: Nov–Jan). Companies that can deploy capital during these periods lock in lower costs, while others remain exposed to spot price spikes and margin compression.
Credit discipline influenced by customer relationships
Credit terms are influenced by customer relationships across dealers and farmers, leading to delays even against agreed payment terms. This, combined with the fragmented nature of the distribution network, makes collections dependent on downstream liquidity and market conditions rather than direct control, resulting in inconsistent receivables realisation.
Manufacturing lead time and demand planning constraints leading to higher inventory levels
Feed production requires alignment between procurement, manufacturing cycles, and demand visibility; however, in a fragmented, dealer-mediated market with limited downstream visibility, forecasting accuracy remains constrained. As a result, companies often build inventory buffers to avoid stockouts, locking working capital into finished goods.
This challenge is further amplified by the perishable nature of feed. Compound feed has a shelf life of 3–6 months under standard storage conditions; beyond this, nutritional degradation, mold risk, and rancidity render it unsellable. Inventory that crosses this threshold effectively becomes a write-off rather than a recoverable asset, increasing the working capital risk associated with excess or misaligned production.
Variation in working capital performance across animal feed players
Operating within similar industry conditions, animal feed companies exhibit a wide variation in working capital outcomes, pointing to structural differences in how capital is managed (Exhibit 1)
Exhibit 1: Working capital variation across animal feed players (consoldited revenue)
This variation is largely driven by how companies manage different components of the working capital cycle. Receivables show the widest dispersion, ranging from 3 days (Suguna) to 76 days (Skylark), reflecting differences in distribution models and credit practices. Inventory levels, in comparison, remain relatively clustered (30-55 days), indicating broadly similar procurement and stocking requirements across players. Payables vary between 15 and 71 days, pointing to differences in supplier relationships and negotiating leverage.
Prioritising working capital interventions in animal feed
Working capital improvement in animal feed manufacturing is driven by a set of interventions across receivables, inventory, and payables. These interventions differ materially in their ability to unlock cash — both in terms of scale and sustainability making prioritisation critical.
At a fundamental level, interventions can be grouped into three categories: those that address structural drivers of working capital build-up, those that improve efficiency within existing processes, and those that strengthen execution discipline (Exhibit 2).
Exhibit 2: WC intervention impact levels 
Building on this classification, the table below outlines the key interventions across receivables, inventory and payables (Exhibit 3), along with their relative contribution to cash release.
Exhibit 3: Interventions for working capital optimization
This framing provides a clear lens to prioritise actions: ensuring focus on interventions that unlock meaningful and sustainable impact, rather than dispersing effort across lower-yield improvements.
How Praxis can help
At Praxis, we work with poultry, animal nutrition, and agribusiness companies to unlock measurable working capital improvement through focused interventions across procurement, distribution, and cash flow management. Our work is anchored in deep expertise across CFO advisory and working capital optimisation, supported by proven playbooks, sector benchmarks, and hands-on experience within the animal nutrition ecosystem (Exhibit 4)
Exhibit 4: Capabilities we build and implement
We go beyond advisory to drive on-ground execution - redesigning operating models, strengthening credit and procurement discipline, and enabling systems that improve cash flow visibility. Our engagements span end-to-end working capital improvement, from diagnosis and solution design to implementation, typically delivered over a 4–6 month programme.
Through our engagements, we unlock 10–30% cash and enable 5–25% potential revenue upside, with sustained improvements embedded in operating processes.