Sharat Industrie — Q4 FY26 earnings call

Call held 1 Jun 2026

Management summary

Sharat Industries reported a strong FY26 with revenue up 38% to ₹524.7 crores and PAT up 60% to ₹15.90 crores. Q4 revenue also grew 25% YoY despite challenges from the Middle East conflict and rising raw material costs which impacted quarterly profitability. The company is focused on diversification, market expansion (US, EU, China), and innovation, targeting ₹1,000 crores in export revenues by FY27-28.

Highlights

  • FY26 Revenue from operations increased by approximately 38% to ₹524.7 crores, demonstrating strong overall growth.

  • FY26 Profit After Tax (PAT) grew significantly by approximately 60% to ₹15.90 crores, leading to an EPS of ₹4.06.

  • Q4 FY26 revenue grew substantially by approximately 25% year-on-year to ₹117.24 crores, supported by healthy export demand and product diversification.

  • US tariff relief on Indian shrimp reduced from up to 50% to 10% from February 2026, improving competitiveness.

  • Free Trade Agreement (FTA) with the EU points to substantial tariff reductions for seafood exports, with the company's plant already EU certified.

Concerns

  • Q4 FY26 profitability was impacted by the Middle East conflict, leading to rerouting of shipments, increased logistics costs, and inventory build-up.

  • Sharp increases in key raw material prices (fishmeal and soya) impacted profit margins in the domestic feed business during Q4.

  • The company noted that geopolitical volatility, raw material price fluctuations, and erratic weather are ongoing risks for the sector.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹117.24 Cr
    YoY +25%

FY26

  • Revenue
    ₹524.7 Cr
    YoY +38%
  • EBITDA
    ₹36.03 Cr
    YoY +26%
  • PAT
    ₹15.9 Cr
    YoY +60%
  • EPS
    ₹4.06

What they filed

Q1 FY27: revenue up 4.4%, net profit up 16.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue100 96 94 115 150 +49%143 +48%117 +25%120 +4%
EBITDA9 8 4 11 12 +30%10 +22%3 −20%13 +15%
Net profit4 3 1 5 6 +54%5 +80%0 −91%6 +17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Setting up a one-megawatt solar power plant for captive consumption in processing division
    The company is in the midst of setting up a one-megawatt solar power plant for captive consumption in its processing division. Part of the project has already been commissioned in Q4 and the balance will be commissioned shortly.

Guidance & targets

Export Revenue

  • Annual Export Revenues Export Revenue · FY27-28 · High confidence ₹1,000 crores
    This is underpinned by a medium-term roadmap to FY27-28 where we are targeting annual export revenues of up to Rs 1,000 crore, supported by deeper penetration in Russia and China and re-entry into the European Union and a measured build-out of our domestic and value-added portfolio.

    — Sharat Reddy Sabbella

Product Mix

  • Value-added products contribution to export portfolio Product Mix · current fiscal · Medium confidence double in percentage by volume

    From 7-10% of overall volume (FY26) today

    As far as our export portfolio is considered, value-added products made up roughly 7-10% of overall volume for the year gone by. And if all export factors remain fairly normal in terms of markets and geopolitics, we are hopeful of doubling that contribution in terms of percentage by volume.

    — Sharat Reddy Sabbella

Market Share (India Exports)

  • Market Share in India Exports (Shrimp) Market Share (India Exports) · currently · High confidence 0.5% to 0.75%
    Our market share as far as Indian exports is concerned is currently about 0.5%. Indian exports for shrimp is typically in the region of around 50,000 to 55,000 crores. And we are ranging between 0.5% to 0.75% currently.

    — Sharat Reddy Sabbella

Market Share (Feed Vertical)

  • Market Share in Feed Vertical Market Share (Feed Vertical) · currently · High confidence sub 2%
    So, our market share there would be sub 2%. We consider ourselves to be a minority player in that sector.

    — Sharat Reddy Sabbella

What to watch in Q1 FY27

US Exports Scale-up

next few months / end of this quarter
Current Cautiously optimistic for significant scale-up in FY27
Target Specific growth figures or volume increases in US exports

Why it matters

US is a key market, and tariff reductions offer a significant growth opportunity. Verification of actual scale-up is crucial.

So, all factors considered, we anticipate that our U.S. exports this year will scale up significantly compared to the last couple of years... I think a lot will depend on how the next few months pan out. Typically, this is also the so-called season for exports from India because summer sees better demand and supply as well. So, we will be able to revisit this with a lot more clarity perhaps at the end of this quarter.

Risks & concerns

  • Geopolitical volatility

    high

    The conflict in the Middle East significantly impacted Q4 operations, leading to rerouted shipments and increased logistics costs. Overall, the year was defined by shifting geopolitics.

    Management acknowledged

  • Raw material price volatility

    high

    Sharp increases in fishmeal and soya prices impacted profit margins in the feed division. Management expects prices to continue to move through cycles.

    Management acknowledged

  • Erratic weather conditions

    medium

    As a farm-based livestock business, the company is susceptible to operational risks from intense weather, with reports suggesting potential for such conditions in the calendar year.

    Management acknowledged

  • Demand normalization and trade conditions

    medium

    The near-term outlook depends on how trade and demand conditions settle, particularly in the US market post-tariff reduction.

    Management acknowledged

Q&A highlights

7 direct
Impact of West Asia conflict and recovery of deferred orders Direct
So, we had approximately 20 containers of shipments that were originally planned for exports in the Middle East in Q4. Of that, about half of those containers had to be rerouted to alternate destinations... In the other half, about five containers were already in transit... Of the remaining shipments, we currently have them as inventory, but we will be reprocessing them for alternate destinations as we speak.

Management quantified the direct impact of geopolitical events on Q4 operations and outlined the recovery strategy for affected shipments.

Asked by Shruti Desai

New client acquisition and market entry Direct
For example, in Russia, we added two new clients during the year gone by. We also penetrated a new market in the form of China for a new product range altogether, which is black tiger shrimp. In that context, we have worked with five customers so far in the year gone by...

Revealed specific new client additions in Russia and successful entry into the Chinese market with a new product, indicating progress on market diversification.

Asked by Shruti Desai

Outlook on domestic market competition from organized players Direct
While the market has largely comprised of unorganized players so far, we anticipate that in the next four to five years, this trend is likely to change for the better in terms of more organized players coming in. We are hopeful that there will be certain government subsidies announced to ensure that distribution channels for effective cold chain solutions across the supply chain to come into place.

Provided management's perspective on the evolving competitive landscape in the domestic market and potential government support for organized players.

Asked by Shruti Desai

European market shaping up and challenges post-FTA Direct
Firstly, the free trade agreement that has been announced between India and the EU has been positive news for the sector at large... So, I think in due course of time during the rest of this calendar year, we anticipate the agreement will come into place and with that see an increase with respect to customer demand as well as exports from our end.

Clarified the positive sentiment around the EU FTA and the expectation of increased exports once the agreement is fully implemented later in the calendar year.

Asked by Shruti Desai

Drivers for 60% PAT growth in FY26 Direct
what we worked on fundamentally is a few things such as market diversification with respect to exports... We were able to penetrate the Chinese market for a product such as black tiger shrimp... there was a slight improvement in our overall capacity utilization. Which enabled us to improve our profitability. And thirdly, adding further value-added products to our product mix improved certain operational margins...

Detailed the strategic initiatives that contributed to the significant PAT growth, including market diversification, new market entry, improved capacity utilization, and value-added products.

Asked by Yash Nisar

Growth opportunities in the US market for FY27 Partial
The reduction in tariffs definitely presented a positive sentiment as far as consumer or customer demand is concerned. So, all factors considered, we anticipate that our U.S. exports this year will scale up significantly compared to the last couple of years... I think a lot will depend on how the next few months pan out.

Management expressed cautious optimism about scaling up US exports due to tariff reductions but also highlighted dependence on demand normalization and near-term market conditions.

Asked by Yash Nisar

Commercial potential of newly launched PD Curl control product in Russia and other markets Direct
So, in this specific scenario we have seen incremental EBITDA margins in excess of 5% up to almost 10% over and above our base EBITDA. Having said that, this is a product that is low in terms of its current volume and we are working closely with our customers to access more demand.

Provided specific margin benefits for the new product and indicated ongoing efforts to scale up demand, suggesting future growth potential.

Asked by Rahul Kumar

Strategies to combat raw material price increase for the feed division Direct
we have been making some initiatives to have alternatives for fish meal because we did foresee that in the long term, sustainability with respect to fish meal had its own challenges. So, we had initiated a pilot project in terms of R&D where we have substituted a portion of the fish meal with insect protein... we also work quite closely with a lot of farmers as part of our contract farming initiative and they do understand the situation... some amount of the costs are being passed on to our channel farming partners but we intend to pass on better realizations to them by ensuring that at the exports level, we generate better contracts with improved margins.

Outlined both long-term (R&D into insect protein) and short-term (passing costs to partners, better export contracts) strategies to mitigate raw material cost inflation.

Asked by Kundan Jalan

3 min read 6 chapters

Detailed narrative

FY26 Performance Highlights & Q4 Overview

Sharat Industries reported a robust FY26, with revenue from operations increasing by approximately 38% to ₹524.7 crores, up from ₹380.5 crores in FY24-25. Export revenue grew by 23%, driven by an 8% increase in volumes. EBITDA for the year rose 26% to ₹36.03 crores, and PAT saw a significant 60% growth to ₹15.90 crores, resulting in an EPS of ₹4.06. For Q4 FY26, revenue grew substantially by 25% year-on-year to ₹117.24 crores, supported by healthy export demand and continued product diversification, despite external challenges.

Impact of Geopolitical Events and Raw Material Costs on Q4

The Middle East conflict was a defining external event in Q4, impacting approximately 20 containers of shipments. About half were rerouted to alternate destinations, and five were already in transit, incurring increased logistics costs. The remaining shipments are currently inventory, being reprocessed for other markets. Additionally, sharp increases in key raw materials like fishmeal and soya impacted profit margins in the domestic feed business, leading to higher costs despite inventory arrangements.

Strategic Diversification and Market Expansion

Diversification remains central to the company's strategy, with the US and China making up 40% of exports, and Russia, Southeast Asia, Europe, and the Middle East comprising the remaining 60%. The company successfully added two new clients in Russia and penetrated the Chinese market with black tiger shrimp, acquiring five new customers in FY26. The US tariff relief, reducing duties on Indian shrimp from up to 50% to 10% from February 2026, is a positive development expected to scale up US exports significantly in the current fiscal.

European Market Opportunity and Domestic Growth

The recently signed India-EU Free Trade Agreement is seen as a positive development, with expectations of substantial tariff reductions for seafood exports. The company's EU-certified plant and historical presence position it well to rebuild relationships and increase exports to Europe, with the agreement anticipated to come into full effect later in the calendar year. Domestically, the company is exploring channels to tap into the frozen shrimp market, including sales to Hyperpure for base products, and anticipates increased organization in the market over the next 4-5 years, potentially supported by government subsidies for cold chain solutions.

Innovation and Sustainability Initiatives

Sharat Industries is focusing on scaling sustainably and innovation. A one-megawatt solar power plant for captive consumption in its processing division is underway, with part commissioned in Q4 and the balance expected shortly. The feed division is actively researching alternate substitutes for fishmeal, such as insect protein, through pilot farming projects initiated in FY25-26, aiming for more cost-effective and sustainable feed manufacturing.

Future Outlook and Targets

The company has a medium-term roadmap to FY27-28, targeting annual export revenues of up to ₹1,000 crores, driven by deeper penetration in Russia and China, re-entry into the European Union, and a measured build-out of its domestic and value-added portfolio. Management is hopeful of doubling the contribution of value-added products in terms of percentage by volume in the current fiscal, from the current 7-10% of overall export volume.

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