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Venky's India Ltd's quarterly profit more than halved, hurt by a steep rise in the cost of poultry feed ingredients and lower sales, the company reported on Wednesday.

Venky's, one of India's largest poultry firms, said it consolidated profit after tax for the March quarter fell 56% to 252.3 million rupees ($3.1 million).

Total revenue from operations decreased 15% to 10.42 billion rupees.

While revenue from its oilseed segment, its biggest by sales, fell nearly 25%, the drop in its poultry business, its second-biggest segment, was a much smaller 3%.

However, the profit margins in poultry business was "severely affected" by steep increase in the prices of key poultry feed ingredients like soya and maize, the company said.

As a result, its core profit margins contracted to 3.26% from 6.99%.

Excessive production of eggs is a challenge for the sector, analysts said, adding that lower production will improve realisation and profitability.

The company said that expansion projects in its Animal Health Products division in the western state of Maharashtra are on track and construction is expected to be completed by June.

Venky's recommended a dividend of 6 rupees per share for the 2023 fiscal, subject to shareholders' approval.

The poultry firm's shares fell as much as 2.78% after its results before trimming losses to 0.5%, as of 1:42 p.m. IST.

($1 = 81.7800 Indian rupees)