# 1. Financial Performance ## A. Key Figures * Gross Income: ₹1,447 Cr Q3 FY26 (+2.99% YoY) · ₹4,761 Cr 9M FY26 (+9.67%) * **PBT:** ₹222 Cr Q3 FY26 (+65% YoY) · ₹698 Cr 9M FY26 (+7%) * **PBT Margin:** 16% 9M FY26 (vs. 3% prior year) ## B. Revenue Trends * **Strong Annual Growth:** Robust top-line expansion in Q3 and first nine months of FY26, driven by **28% higher sales volume** and improved price realization. * **Quarterly Volatility:** Sharp sequential decline in Q3 gross income reflects **temporary demand and operational fluctuations**, not underlying trend. ## C. Profitability Drivers * **PBT Expansion:** Significant year-on-year profit growth across periods, supported by favorable forex, lower freight, and **exceptional other income**. * **Cost Pressure:** Opex surged to **₹191 Cr in Q3** (from ₹77 Cr YoY) due to **50% reciprocal tariff**, a temporary headwind expected to ease. ## D. Margin Analysis * **Margin Resilience:** PBT margin improved to 16% despite headwinds, aided by stabilized raw material costs and inventory cost averaging. * **Near-Term Risk:** Current margin strength is **temporary**, with low-cost inventory depleting in **2–3 months**; full-year feed margins expected to moderate to **5–15%**. --- # 2. Feed Sales & Volume Trends ## A. Key Figures * **Feed Sales Volume:** **118,127 MT** Q3 FY26 (↓ QoQ & YoY) · **438,335 MT** 9M FY26 (+vs 9M FY25) * **Shrimp Exports:** **14,149 MT** FY25 · **16,500 MT** projected FY26 * Pet Food Sales: **₹136.2 Lakh** Q3 FY26 (↑↑ from ₹95.08 Lakh Q2 FY26) ## B. Domestic Volume Growth * **Volume-Price Headwinds:** Q3 feed division income declined despite higher sales quantity, pressured by lower volumes and reduced realization, reversing prior momentum. * **Full-Year Recovery in Sight:** 9M feed sales show year-on-year growth, with FY26 volume guidance implying strong H2 rebound. * **Farming Sentiment Strengthens:** Early 2026 shrimp season off to a robust start, with high farmer participation and positive supply chain sentiment supporting future feed demand. * **Brand Traction Builds:** Avant’s visibility on Supertails rising, backed by expanding listings and positive customer feedback. ## C. Export Volume & Mix * **Export Growth Trajectory:** Company’s shrimp export volumes rising steadily, with FY26 projection indicating continued expansion amid fragmented market conditions. * **Diversifying Demand:** Indian fish meal gaining traction in Taiwan and broader Asian markets due to cost competitiveness versus South American alternatives. * **Channel Expansion Underway:** Product rollout across all regions ongoing, supported by distributor network development and e-commerce push. ## D. Segment-wise Income * **Pet Food Surge:** Q3 pet food sales spiked sharply, driven by strong cat food demand and sustained dog food growth. * **Quality-Led Strategy:** Business gaining traction through focus on superior product quality, with new launches planned to challenge established brands. * **Revenue Mix Stable:** Dog food remains dominant segment, contributing **60–65%** of pet food revenues. --- # 3. Input Costs & Margin Drivers ## A. Key Figures * **Fish Meal Price:** **₹117/kg** Q3 FY26 (+20% YoY, +19% QoQ) · **₹145/kg** current purchase price * **Soya Bean Meal Price:** **₹44/kg** Q3 FY26 (-4% YoY, +2% QoQ) · **₹56/kg** current purchase price * **Wheat Flour Price:** **₹32/kg** Q3 FY26 (-9% YoY, -3% QoQ) · **₹32/kg** current price ## B. Fish Meal Price Dynamics * **Global Supply Shifts:** Improved fish catches in Chile and Peru are increasing global supply, temporarily reducing demand for Indian fish meal despite strong export pull. * **Export-Led Price Pressure:** Indian fish meal prices surging due to robust export demand, **US dollar strength**, **rupee depreciation**, and government export incentives boosting exporter margins. ## C. Raw Material Cost Trends * **Mixed Input Inflation:** Profitability pressured by rising fish meal and soya bean meal costs, partially offset by lower wheat flour prices. * **Forward-Looking Stabilization:** Management expects raw material cost volatility to moderate over the remainder of the year. ## D. Margin Management Strategy * **Product Mix Shift:** Strategic pivot toward **higher-margin value-added products** and premium clients with strict quality and safety requirements enhancing resilience. --- # 4. Capacity & Manufacturing ## A. Key Figures * **Processing Capacity:** **28,000 MT** confirmed for planning purposes ## B. New Facility Progress * **Project Timeline:** Construction set to commence post-completion of detailed project report and receipt of **government approvals** in India; no capex disclosed yet. * **Cost & Profitability Outlook:** Clear project cost estimate expected in the next **1–2 months**, with full financial projections to follow within **1–2 quarters**. * **Strategic Scale-Up:** Joint venture with **Thai Union** has propelled the company into the ranks of **top global frozen shrimp importers**, marking a significant leap in scale. ## C. Land Development * **Site Preparation Underway:** Land acquired near **Hyderabad** has been reclassified for industrial use; development ongoing with final designs and machinery planning in progress. --- # 5. Market Access & Trade Policy ## A. Key Figures * **Gross Income (Shrimp Division):** ₹455 Cr Q3 FY26 (-5% QoQ) · ₹328 Cr Q3 FY25 (+39% YoY) * **Sales Volume:** **1,095 MT** in Q3 FY26 (-23% QoQ) * **B. S. Import Surcharge:** **10%** (initial), increased to **15%** * **EU Shrimp Tariff:** Up to **26%** previously · **UK Tariff:** Up to **9%** previously * **Customs Duty on Shrimp Feed:** Reinstated at **15%** (from 5%) ## B. US Tariff Changes * **Tariff Volatility Resolved (Temporarily):** IEEPA-based U.S. tariffs invalidated by Supreme Court; replaced within hours by a **15% temporary surcharge** under Section 122, restoring legal basis but maintaining cost pressure. * **Improved Competitive Positioning:** Removal of punitive 25% penalty duty has enhanced India’s price competitiveness vs. Ecuador, driving **increased importer inquiries and improved sentiment**. * **Near-Term Uncertainty Persists:** Despite relief, the new **15% surcharge** introduces transitional uncertainty, with market response still evolving just one month post-implementation. * **Revenue Resilience:** Shrimp export division maintained strong YoY growth despite sharp QoQ volume decline, supported by **favorable pricing and forex tailwinds**. ## C. EU & UK Trade Deals * **Trade Agreements on Track:** UK and EU deals expected by year-end, with UK talks starting in April; implementation estimated in **6–9 months** due to bilateral formalities. * **Significant Market Access Gains:** Anticipated tariff reductions in EU (from up to **26%**) and UK (from up to **9%**) to boost demand via improved price competitiveness. * **Strategic Export Diversification:** Company actively expanding beyond U.S., with **positive outlook for Asia** and **technical trials underway in Middle East** for shrimp feed. ## D. Export Duty Impact * **Policy Support for Exports:** Budget reinforces focus on aquaculture, export infrastructure, and value addition, with **ongoing duty rationalization** improving input cost competitiveness. * **Domestic Feed Protectionism:** Reinstatement of **15% duty on imported shrimp feed** supports local manufacturers but may affect input costs for integrators. * **Government Prioritizes Forex Earnings:** Export restrictions unlikely due to focus on foreign exchange, though **balance with domestic supply remains a policy concern**. --- # 6. Risks & Supply Chain ## A. Raw Material & Competitive Risks * **Supply Vulnerability:** Domestic fish meal availability under pressure from strong export demand, prompting industry calls for export curbs to safeguard local feed producers. * **Import Cost Exposure:** Trading-based model increases import dependency, leaving costs exposed to **foreign exchange volatility**, particularly rupee depreciation against the dollar. * **Platform Competition:** Amazon’s entry with a private-label pet food brand poses a strategic threat, amplified by its control over marketplace visibility and distribution. * **Reputation-Driven Expansion:** Growth constrained by food safety imperatives, with incremental scaling prioritized to mitigate reputational risks from quality lapses. ## B. Weather Dependence * **Climate-Sensitive Inputs:** Feed costs and raw material supply are highly exposed to agricultural and marine cycles, with fish meal availability influenced by **El Niño patterns** affecting key global suppliers. * **Seasonal Demand Lull:** Current off-season and winter conditions are limiting farm-level material availability, tempering near-term demand. * **Production Volatility:** Aquaculture feed volumes are tied to two key seasonal cycles, with prior-year output impacted by adverse weather, underscoring climate-related earnings risk. ## C. Shipping Disruptions * **Geopolitical Shipping Risks:** Middle East tensions are elevating concerns over export logistics, with rerouting via the Cape of Good Hope introducing potential container and rate pressures. * **Indirect Exposure Likely:** While no direct operational impact expected for U.S., Europe, or Japan shipments, a **trickle-down effect** on container availability and freight costs remains a watch item. --- # 7. Guidance & Outlook ## A. Key Figures * PBT Margin (FY26): 14.5%–15% projected (moderation due to input cost inflation) * Profitability Trend (Q4 FY26): **1%–1.5%** estimated average increase vs. prior periods (cost averaging benefit) ## B. FY26 Volume Projections * **Cautious Optimism on Volumes:** Feed sales expected to grow **at least 10%** on rising farming activity and improved farmer sentiment, supported by climatic recovery and re-entry of former farmers. * **Near-Term Uncertainty:** Growth remains contingent on successful progression of the ongoing culture season, with stocking only recently initiated; clarity expected by mid-season. * **Skepticism on Guidance:** External analysts have questioned the ambition of the ~5 lakh MT FY26 feed volume target amid mixed market conditions. * **Limited Africa Opportunity:** No meaningful near-term growth expected from Africa due to low income levels; long-term potential seen beyond 2–3 years. ## C. FY27 Planning Status * **No Formal Guidance Yet:** FY27 and FY28 volume and financial targets remain undetermined due to seasonal unpredictability and ongoing planning; final projections to be shared in the next earnings call. * **Focus on Scaling:** Strategy from FY27 onward centers on **sustained year-on-year growth** in volume and revenue, targeting steady CAGR through continued expansion. * **Farmer Engagement Key:** FY27 planning hinges on success in incentivizing farmers to increase cultivation, amid lingering tariff and market access uncertainties. ## D. Margin Expectations * **Near-Term Pressure, Long-Term Recovery:** FY26 PBT margin to moderate significantly due to sharp input cost increases, though long-term recovery is expected as tariff benefits materialize over **6–9 months or longer**. * **Pet Food Margin Outlook Deferred:** No guidance provided for pet food margins due to early-stage launch; current focus on brand building and market entry, with high upfront costs. * **Cost Advantage in Pipeline:** Margin improvement anticipated in **14–15 months** when **in-house production begins**, reducing import dependency and lowering costs. * **Pricing Confidence:** Company maintains **competitive pricing edge** over potential private-label distributors, leveraging its position as a manufacturer.