Apex Frozen Foods Limited

Apex Frozen Foods delivered a robust Q3 FY26, with net revenue growing 15% year-on-year to INR 264 crores, primarily driven by increased shrimp sales to the European Union and improved average realizations. This performance was supported by lower raw material prices, which stood at INR 327 per kilo compared to INR 374 per kilo in the prior year. Consequently, EBITDA surged by 147% year-on-year to INR 17 crores, with the EBITDA margin expanding by 344 basis points to 6.5%. For the nine months ended December 31, 2025, net revenue increased 23% year-on-year to INR 761 crores, and PAT grew significantly to INR 31 crores from INR 2 crores in the corresponding period last year.

The company's strategic focus on diversification has yielded results, with non-U.S. export business growing from approximately 37% in 9M FY24 to nearly 51% in 9M FY26, reducing dependence on any single region. While sales to the U.S. declined 12% year-on-year in Q3 FY26, the recent reduction in Indian shrimp export tariffs to the U.S. from 50% to 25%, effective February 7, 2026, is expected to significantly improve volumes going forward^⏳. Management noted that the previous 50% tariff was largely absorbed by customers but impacted volumes.

The proposed India-EU Free Trade Agreement (FTA) is viewed as a structurally positive development for the industry and the company, indicating tariff reductions that will strengthen the medium- to long-term growth outlook. Although the benefits are expected to accrue gradually, with the EU FTA likely taking effect sometime in FY27, it will enhance the company's competitiveness and support increased volumes, particularly for ready-to-eat products. The company anticipates higher revenues, potentially reaching INR 1,200-plus crores over the next two years, driven by these trade relaxations.

Farmgate prices for shrimp have shown an uptick, increasing by approximately INR 30-40 per kilo in the current quarter, a trend observed seasonally around January-February. This rise in raw material costs is expected to impact realizations in the near term. Despite earlier conservative approaches by farmers due to disease issues and U.S. tariffs, improved temperatures and the removal of tariff barriers have created positive momentum. The company's hatchery operations in the South are running efficiently, indicating a positive supply outlook for the upcoming harvest season starting March-April.

Apex Frozen Foods is currently operating at around 33-35% capacity utilization for the full year. The management aims to increase this by another 10-15%, targeting at least 50% utilization by FY27. The company is actively focusing on growing its ready-to-eat product volumes, irrespective of the EU FTA, leveraging existing approvals. While ready-to-eat sales currently represent about 11% of total sales, there is significant headroom for growth, especially with the anticipated benefits from the EU FTA.

The company is actively pursuing expansion into new markets like Russia and Australia, with sales expected to commence in Q4 FY26 or Q1 FY27. While regulatory restrictions in Australia are being addressed, management sees significant potential in these markets. In terms of competition, while Ecuador remains a dominant player, the reduction in U.S. tariffs for Indian shrimp is expected to level the playing field, allowing India to compete more effectively on price and leverage its consistency and reliability in deliveries.

Apex Frozen Foods has significantly reduced its short-term debt, bringing it down from INR 140 crores to INR 40 crores. This reduction is attributed to improved receivables management, including faster collection from government departments and new customers with favorable payment terms. The company maintains a disciplined approach to cost control and revenue diversification, reinforcing its balance sheet and enhancing resilience against market headwinds^🌐.

Management confirmed that the U.S. antidumping duty on shrimp has increased from 1.35% to 3.5%, effective from the current week. This change will result in a marginal increase in costs for prospective payments related to U.S. exports and is expected to impact the Q4 FY26 financial performance. The company will monitor the full implications of this revised duty.