Apex Frozen Foods Limited — Q2 FY26 earnings call

Vietnam has an FTA free trade agreement in place for almost 2 years, this is the third year, I guess. And they are at 0% tariff or duty, the Vietnam shrimp products into the European Union are at 0% for raw -- ready-to-cook -- sorry, ready-to-cook products, while we are at 4.3%. And the also their testing at the destination on their goods is at 10%, while the testing on Indian consignments to the European Union are at 50%. So these 2 major topics, which are there. One is that tariff barrier and the other is non-tariff barrier as far as the entry of consignments into the EU is concerned, that is being addressed right now as we speak in the negotiations of the India, EU, FTA talks.

Highlights the competitive disadvantage India faces in the EU market due to tariffs and testing, and management's reliance on ongoing FTA talks for resolution.

Asked by Nitin Awasthi

The potential for Australia itself is quite significant. In fact, the company was doing a good chunk of business, a good part of business in the past. I mean this was even before the company became private. So let us say, before 2012, around 2012-'13. Before that time, we used to do quite a lot of business with Australia, and there is a lot of potential in Australia. So we can definitely at least to start with, we can easily take it up in the first year at 5% and grow it to almost 10% of the overall business on a percentile basis as far as Australia is concerned.

Provides specific growth targets and historical context for new market entry, indicating significant revenue potential from Australia and Russia.

Asked by Bala Murali Krishna

One of the most important points with regard to the other expenses, which you also need to understand is that our tariffs have increased the tariff, which you are aware, which is being paid in the case of U.S. market. The 50% tariff that obviously gets factored. I mean, that will be part of the other expenses. One of the reasons why the other expenses jump is there.

Clarifies the primary reason for the increase in 'other expenses' and explains how the 50% US tariff is being managed, including customer compensation.

Asked by Bala Murali Krishna

Maximum, I would only we would only be able to give you an idea that if we are able to achieve a 70% utilization of our capacity current capacity, we should be looking at around 20,000 metric tonnes in the due course, in the next few years, right? So that is -- and usually 80%, 85% is the max out of any fixed capacity we have.

Provides a long-term volume target based on capacity utilization but management avoids giving a specific revenue figure, highlighting the complexity of realization and tariffs.

Asked by Sharan

this year, of course, it we should be doing around 1,000 metric tonnes max, high side, on a higher side, which tentatively in the current financial year, roughly, we should be able to do around 1,000. But next year, we should be only in the RTE, we should be looking at 2,000 to 2,500 metric tonnes as stated in the earlier call.

Quantifies the expected volume contribution from the new, value-added RTE facility for the current and next fiscal year, indicating a significant growth driver.

Asked by Unni

First thing, the relationships, which are new relationships or new markets, which we are diversifying into or the new business, which we are trying to grow is not temporary and is not purely only because there is a temporary problem or there's likely to be a temporary problem in the U.S. because of these tariffs, no. These markets, these relationships and those sales will continue to grow.

Reassures investors that the company's diversification efforts are strategic and long-term, not just a temporary response to US tariff issues, implying sustainable growth.

Asked by Chintan Mehta

Well, as negotiations trade negotiations happen, continue to happen and there are dialogues happening parallelly, during our company's quarterly con call, but also parallelly, there are negotiations happening between the governments, we should see whether the entire Q3 will really be exposed to the 50% tariffs or not, I don't know. It is too premature to say to state. However, the impact of the tariffs is there, and we wouldn't conceal that fact, but it is a fact that it is there.

Management acknowledges the impact of tariffs but remains uncertain about the full Q3 exposure, indicating ongoing volatility and potential for changes based on trade talks.

Asked by Ashok Kumar

I mean, typically, generally, on an average, all RTE products margins will be hovering around - - roughly around $0.50 plus or minus per kilo.

Provides a specific margin expectation for value-added RTE products, offering insight into the profitability potential of this growing segment.

Asked by Nithin Renjith