Good evening, ladies and gentlemen. I'm Pelsia, moderator for the conference call. Welcome to Avanti Feeds Limited Q1 FY26 Investors' Conference Call. We have with us today Mr. C. Ramachandra Rao, Joint Managing Director, Mr. A. Venkata Sanjeev, Executive Director, Mr. A. Nikhilesh, Director, AFL and Executive Director, Avanti Frozen Foods Private Limited, Mr. D. V. S. Satyanarayana, CFO, Avanti Frozen Foods Private Limited, Mr. K. Srinivas Reddy, CFO, Avanti Pet Care Private Limited. As a reminder, all participants will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star and then zero on your touch-tone telephone. Please note that this conference is being recorded. I would now like to hand over the floor to Mr. C. Ramachandra Rao. Thank you, and over to you, sir.
Thank you, Pelsia . Good evening, ladies and gentlemen. I'm pleased to extend a warm welcome to all of you for this Investors' Conference Call to review the unaudited financial results for the Q1 FY26. Mr. A. Venkata Sanjeev, Executive Director, and Mr. A. Nikhilesh, Executive Director, have joined online. Along with me here are Mr. D. V. S. Satyanarayana, CFO of Avanti Frozen Foods Private Limited, and also Mr. K. Srinivas Reddy, CFO of Avanti Pet Care Private Limited, and other secretarial and accounting staff members.
To begin with, Mr. D. V. S. Satyanarayana will present highlights of financial results for the quarter ended 30th June 2025, of Shrimp Feeds and Shrimp Processing and Export Division, and also consolidated financials of the company for the same period. Thereafter, Mr. K. Srinivas Reddy will present the status of the Pet care project. After presentation by all of them, we will take up the question- and- answer session. Over to you, D. V. S.
Thank you, sir. Good evening. Now, I will take you through the consolidated and stand-alone division financial performance highlights for the quarter-ended 30th June 2025. First, I'll take you through the consolidated financial results for Q1 FY26. The comparative performance of Q1 FY26 with that of Q4 FY25 and Q1 FY2025 have been given in the presentation already circulated. Gross income in Q1 FY26 is INR 1,657 crore, as compared to INR 1,432 crore in the previous quarter, that is Q4 FY2025. So, an increase of INR 225 crore by 15.7%. Compared to Q1 FY2025, that is corresponding quarter in the previous year, gross income of INR 1,538 crore, so there is an increase of INR 119 crore by 7.7%. The PBT is INR 249 crore in Q1 FY2026, as compared to INR 211 crore in Q4 FY2025.
We can see an increase of 38 crore by 18%, and compared to Q1 FY25, PBT of 180 crore, there is an increase of 69 crore by 38%. The consolidated results indicate net impact of several factors, such as increase or decrease in income and expenditure, etc., relating to Feed and Frozen Food Division, which have been discussed in the following divisional performance of these units individually. Stand-alone financial results of Feed and Processing Division. First, I will take you through the Feed Division Q1 FY2026 results. The gross income for the Q1 FY26 is 1,279 crore, as compared to 1,067 crore in the previous quarter of Q4 FY25, an increase of 212 crore, mainly due to increase in quantity of feed sold during the main season. The gross income in Q1 FY26 decreased to 1,279 crore from 1,296 crore in the corresponding quarter of Q1 FY2025.
A marginal decrease by 17 crore due to increase in sales quantity by 6,974 metric tons, and the same has been compensated by decrease in sales price by INR 4 per kg. The PBT for the Q1 FY26 is 224 crore, as compared to 194 crore in Q4 FY2025, an increase of 30 crore by 15.5%, mainly due to decrease in raw material cost. The PBT in Q1 FY26 was increased by 71 crore from 153 crore in Q1 FY25, represented by 46% due to increase in sales and decrease in raw material cost. The feed sales increased to 165,564 metric tons in Q1 FY2026, as compared to 129,711 metric tons in Q4 FY2025. And in Q1 FY2025, the total feed sales were 168,591 metric tons.
Increase in profitability when compared to previous quarter and corresponding quarter of the previous year is mainly due to increase in sales and other income, also decrease in raw material cost and better overhead absorption. The major raw materials are fish meal, soybean meal, and wheat flour. The noticeable development in this quarter is softening of two major raw materials, that is fish meal and soybean meal, resulting in improvement in the profitability.
The prices of these raw materials keep fluctuating since their production is based on agriculture and fish catches from the ocean. The prices of fish meal increased to INR 93 per kg in Q1 FY2026, from INR 91 per kg in Q4 FY2025, and decreased from INR 117 per kg in Q1 FY2025. In case of soybean meal, prices reduced to INR 39 per kg in Q1 FY2026, from INR 40 in Q4 FY2025 and INR 49 in Q1 FY2025.
However, the wheat flour price decreased to INR 31 per kg in Q1 FY2026, from INR 36 per kg in Q4 FY2025, and it is increased from INR 28 per kg in Q1 FY2025. While on one hand, the raw material prices are instrumental in determining the margin, on the other hand, the status of aquaculture activity conditions, such as climatic changes, diseases, etc., determine the consumption of feed in terms of volume, which will have an impact on the overall performance. As you notice, the first half of the year 2025 has been a good profitable period. However, the forecast for the second half of this year is challenging due to factors like gradual increase of raw material prices and levy of reciprocal tariffs by the U.S. at the rate of 50%, which will have a significant impact on the performance of the company, particularly the second season.
To sum up, in general, FY25-26 is expected to be a mix of favorable and challenging season for the aquaculture industry, both in respect of shrimp production as well as exports from India and global demand for shrimp exports. Shrimp production and feed consumption in FY2025 and company plans for FY2026. Shrimp feed consumption, on the basis of estimated shrimp production of about 10 lakh- 11 lakh metric tons in calendar year 2025, the feed consumption is estimated to be about the same level. The company's feed sales during the FY2025 was 555,247 metric tons against 531,967 metric tons in the financial year 2024. It is estimated that the feed sales during FY2026 would be around 560,000 metric tons. Shrimp processing and export, India's shrimp exports touched 745,520 metric tons in financial year 2025, generating a revenue of $5.17 billion.
Frozen shrimp remains a major export item in quantity and value, accounting for a share of about 40% in quantity and 66% of the total dollar earnings. The company's shrimp exports during the FY2025 was 14,149 metric tons, as compared to 13,444 metric tons in the year 2024, an increase by 682 metric tons. It is estimated that the exports during FY2026 would be around 17,000 metric tons. So now, I will run through the Shrimp Processing Division Q1 FY2026 results. The gross income for Q1 FY2026 is INR 378 crore, as compared to INR 364 crore in Q4 FY2025, an increase by INR 14 crore, representing 4%, mainly due to increase in sales quantity by 123 metric tons, which represents 3%. The gross income in Q1 FY2026 increased to INR 378 crore from INR 243 crore during Q1 FY2025, an increase of INR 135 crore, representing 56% year-over-year growth.
The sales volume during Q1 FY2026 increased to 4,223 metric tons from 2,783 metric tons in Q1 FY2025, an increase of 1,440 metric tons. Higher sales in Q1 FY2026 were driven by majorly volume growth and increase in average selling price realization, and of course, favorable foreign exchange rates. The PBT before exceptional item for Q1 FY2026 stood at INR 25 crore from INR 18 crore in Q4 FY2025, due to higher sales volume, increase in average sale price realization, and increase in RM prices. The PBT in Q1 FY26 was INR 25 crore, a decrease from INR 27 crore corresponding quarter, that is Q1 FY2025, primarily due to marginal increase in raw material prices.
So now, I will update on the fish feed business. As reported in earlier phone call, the company has imported fish feed from Thai Union Feed Mill Company Limited and is conducting trials under Indian conditions. Once the product performance is approved, the production in India will be taken up for domestic sales. So with this, feed and frozen divisions are completed. Now, I hand over to Mr. K. Srinivas Reddy to update the status of Pet Food Project.
Thank you, Mr. D. V. S. Satyanarayana. Now, I would like to update the Pet Food Project. As already informed you, the company successfully commenced trading in cat food from January 2025. It's our first product range under the Avanti Pet care brand, that is Avanti Frozen in cat food, ocean fish flavor. The response from the pet owners is highly positive, as on day we cover the 60% of Pan-India. During Q1 FY25-26, the company recorded sales INR 38.17 lakhs, showing steady growth from the INR 25.79 lakhs in Q4 FY24-25 in one cat food flavor. In July 2025, the company expanded its cat food portfolio with the launch of second flavor, Tuna. In addition, the company launched a dog food, chicken, and vegetable flavor. Trading started in August 2025, which constitutes the largest share of the pet food industry, around 65%.
On the market expansion, the company expanded its presence in Tier one cities and initiated expansion in Tier two city market. In addition to this, e-commerce operations are planned from September 2025, followed by quick commerce from December 2025, enabled by this reach and faster consumer connect. The company continues to focus on creating a strong brand visib ility for Avant Furst. For the digital marketing campaigns and Instagram and Facebook, that is Avant Furst , aimed at increasing consumer awareness and our brand engagement.
As you know, the company has purchased and converted from agriculture to non-agriculture, approximately 30 acres of land near Hyderabad to propose the state-of-the-art manufacturing facility. At present, the survey and land development for construction is in progress. The company is planning to commence the construction by end of this year after obtaining necessary government approvals. This is about the update of Pet care. Now, I hand over to JMD Sir for closing remarks.
Thank you, K. As you have already seen, the performance has been so good. Let me just give you an update on the current quarter, which is in progress now. Initially, the culture started very well, and it was progressing, but due to heavy rains, there was the fast, I mean, premature harvest and some diseases here and there. Actually, this temporarily slowed down the aquaculture activity, and now, again, it has started and going very well, so we expect that this trend would continue throughout September and October so that we get good production by this season, by October, November, so that we'll take care of the production requirements, whatever that we have anticipated in respect of feed sales. That being the case about the feed, the other important aspect about feed is the increase in raw materials, raw material prices.
It is a little bit surprising that some of these prices have gone up, which has been more or less stable throughout this year, right from the beginning. For example, fish meal, which has been quite low at the rate of around INR 93-INR 94, has now come up to INR 105 now. Similarly, soybean meal, which is around INR 38-INR 39, has gone up to INR 47 now. So these prices have gone up. One of the reasons being that the government has announced minimum support price, which is effective from October. That is one of the major reasons, and we expect that the fresh crop of soybean meal would arrive at the market in the month of October.
We expect that the prices of soybean meal would stabilize by then because, as of now, the crop is growing well, and we are expecting a good crop this year also, just as in the last year. Similarly, in the wheat flour, wheat flour was about INR 31 in Q1 2026, but now it is around INR 35. This price has also gone up. The fresh crop comes around the end of February and March. We expect that some stabilization would take place in respect of wheat flour. As you know, we have been saying almost in every phone call that the raw material prices are very crucial in determining the profitability and margins of feed divisions. We look for stable prices in the rest of the financial year also so that we end up with the volumes more or less the same, marginally increased.
It is about 560,000 metric tons we are expecting. If we achieve that, the volume and price being stable, we should be able to make reasonably good returns. Now, coming to the most important aspect, which is the burning topic of today, that is the U.S. levying reciprocal tariffs of 50%, which affects from 2027, which has come into effect now. Several efforts have been made by the governments and export promotional organizations to arrive at a reasonably good level so that it will be beneficial for both the countries for bilateral trade. However, as of now, there is no such development which has taken place, and the effective 50% has come into force.
That having realized the reality, then we have now working, and we have been, in fact, working for some time to develop our markets to other destinations like Japan, like Europe, Korea and Canada, and other countries where we want to expand. And we have been able to achieve reasonably good results for the past one year. Gradually, we are increasing and decreasing dependence on the U.S. market. That is a positive development. And also, we are expecting the government also would come into the help of these industries, particularly the three sectors which have been severely affected by this 50% tariff, that is textiles, then gems and jewelry, and aquaculture. So we have learned that the government is already been seriously working on the modalities, how these industries can be supported for survival. I need to look for other markets by way of increasing the exports instead of U.S.
And simultaneously, the government is also working on promoting the domestic market so that as an alternate to the export market, we have a big population in India, and the consumption of shrimp is very, very low. So this is one opportunity that we have come in the way. So we want to, with the government support, we hope that we will be able to promote the domestic market sales also. And we have already started, and we have achieved reasonably good success. And in the course of time, Mr. Nikhilesh will explain you the steps that we have taken for the promotion of the domestic industry. So coming to the specific rates, I think India has the highest. I think there are only two countries in the world which have got one: Brazil and India have 50%, the highest.
Thailand has 19%, Vietnam has 20%, Indonesia has 19%, Ecuador 15%. So these are the rates. Of course, we are nowhere near any of these countries. But nevertheless, we are very confident, and we should be able to get back into our sales to other countries and also domestic sales. We don't see any big challenge in the long run. It is only a short-lived and a temporary phase, but I think maybe about three to six months' time, we should be able to get back to our original position. There should not be any problem. So of course, there's the details of how this can process. Before 17 September, arrival in the U.S. rate is 10%. Between 17th September and 5th October, arrival in the U.S., it is 35%, 10% base, but line time is 25%, total 35%. After 5 October, it is 50%.
Goods loaded on a vessel for final transit between 7th August and 27th August. Before 17th September in U.S., 25%. On or after 17th September, 50%. Goods loaded onto a vessel for final transit after 27th August, arrival in U.S., regardless of arrival date, 50%. In addition to the tariff at the rate of typical times of 50%, the levy of CVD, which is at the rate of 5.77% presently, is always an additional burden to the export of shrimp to the U.S., which is the largest export market for the company till date. Keeping this factor in view, the endeavor of the company is to expand its global market to other destinations like Japan, Korea, the European Union, and the Middle East. It is pertinent to mention that we know the reciprocal tariffs for the U.S. having come into effect.
The company in India is focusing on export to other markets and also promote the domestic market for shrimp sales. Further, it is reliably learned that the government of India is also working on steps to support the marine product export sector as this nature of severe hardship causes exports to the U.S. We do hope that the government will roll out an appropriate measure to mitigate the adverse impact on account of the reciprocal duty. Overall, the global market for shrimp consumption is expected to be stable in 2025 compared to 2025, maybe with a marginal increase by about 5%.
The focus is on demand for value-added products, which is gradually increasing and processors see better margins in value-added products, and our company is also focusing more on value-added products to get a better margin. The company is working with this objective to maintain the better margins. I think with this, I will now open the discussion for questions and answers session.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on the telephone keypad and wait for your turn to ask a question. If you would like to withdraw your request, you may do so by pressing star and one again. Ladies and gentlemen, if you have any questions, please press star and one on the telephone keypad. First question comes from Nitin Awasthi from InCred Capital. Please go ahead.
Hello. I have two questions. Firstly, on the volumes front, and this is not on the feed volumes, but not for the company, for the industry as such. For the shrimp industry as such, do you expect a fall or stability within the shrimp feed volumes?
I think the shrimp feed, there will not be any fall. We are expecting that it will be the same level as in the previous year, even slightly better. We are expecting about 560,000 metric tons of feed for this year. As far as the shrimp is concerned, the production is also likely to be more or less the same level. Yeah, we do not expect any reduction, steep fall in the production of shrimp this year because of these tariff changes.
Understood, sir. The second question, I think Nikhilesh would be most suited to answer this question. It's on the processing side of things. But broadly, because of these tariffs which have come out and because the whole industry is getting disrupted, do you see any positive developments coming out of this? When I say positive, what do I mean? I'll just clarify that so we have that thought process narrowed down. Do we see the price inflation of this commodity within the U.S. making it very expensive for the U.S. consumer to actually have this produced? By which that whole conversation that keeps happening that India is dumping will stop happening, and the U.S. consumer will realize, and the market will realize that we are a necessity to provide shrimp at an affordable cost to the U.S.
Hi, Nitin. I hope all is well. I think you've been consistently the first person to ask the question the last few quarters. But that's a good question. So to answer that, I think that's a very broad question, and there would be a lot of speculation, and everybody's opinion would differ. In my opinion, yes, there will be a lot of inflation. There's definitely going to be an inflation in the price of shrimp in the U.S. because all the producers have duty. So the minimum is 15% for Ecuador and going up to almost 50% for India, which is the major supplier to the U.S. So there is definitely a price increase. But in my understanding on the dumping viewpoint, we need to see what the regulator looks at.
Basically, they usually look at whether we are selling to the U.S. at a much lower price than what we're selling to other markets, thereby dumping the product. So that's something that the DOC will have to review. But right now, it would be too early to speculate how they would view this. But on the inflation point, definitely there is, we're already seeing that in the market that the price of shrimp is going up, not gradually, but quite drastically.
Understood, sir. So all the shopping from the U.S. importers for this year's holiday season would have been done, or would a part of it be still stalled because of the tariff?
So I think a good portion of it is completed, at least for Avanti. We did ship out a considerable amount of product in the first quarter. That's why you see a huge jump in revenue. But there are always parts of it which need to be shipped out. So we continue to ship at the moment to the U.S. market, and I believe that's also for the industry. The November-December period is the holiday season in the U.S. where they require shrimp a lot, where people are eating out and preferring to eat seafood. So the retailer, from what I understand, would like to continue having product on their shelf. So there are shipments continuing. So the short-term impact is not as large as we anticipated.
Understood, sir. Thank you.
Thank you. The next question comes from Yash Chandorkar from Vivog Commercial Limited. Please go ahead.
Am I audible?
Yes.
Yes. Thank you for giving me the opportunity. I have two questions. First, I want to understand overall how this tariff will impact on our company, and second one is I want to know if any rerouting of our shipments is happening or in general also, like shrimp shipments we are rerouted from some other countries or like that.
Yeah. So on the impact of the industry, generally, I would say that the 50% tariff on India impacts almost 55% of the total exports into the U.S. market, covering several sectors, including seafood, textiles, gems, and jewelry, etc. So on that front, definitely there's an impact on the volume. So at the moment, like I answered in the previous question, the immediate impact is not as much as we thought because we continue to ship because they cannot replace the supply chains almost immediately, especially since India is one of the largest producers of shrimp. So on a short-term basis, we don't anticipate as large of an impact as we first saw when the tariff of 50% was introduced. On Avanti itself, as you know, our feed business is about 50% of the market share.
So all the products, all the farmers that we sell to, who are selling to non-US markets also are part of the system. So the impact over there is not as large as the impact that it would be on the processing business, where we derive more than 60% of our revenues from the U.S. business. So that's the first part of the answer. Could you repeat the second question again?
I just want to know any rerouting in our shipments. And also,
I'm sorry about that. So that's completely illegal so that we don't definitely do anything like that. We don't reroute any of our shipments.
Okay. And industry-wise, if you see how many other countries is this happening?
Again, like I said, this is not illegal. If the U.S. government finds out, then we're talking about a complete ban on the company and severe federal penalties. So definitely, I don't think and advise anybody to look into that.
Okay. Okay. I understand. Thank you. Thanks for my questions. Thank you.
Thank you. The next question comes from Ronak Shah from Equirus Securities. Please go ahead.
Yes, sir. Thanks for the opportunity. So my first question is regarding the processing business or the export, both from the industry and Avanti's viewpoint. So once our shipments have started reaching to the territory where the tariffs are, which we say that 50-odd%, are we seeing discounts or some sort of passing of the tariff from the customer and to the companies in India? And secondly, as highlighted, that there can not be a near-term impact. However, if we assume the status will take time to get a date, how do we see the business impact in terms of the sales and the margin?
Okay. So the first question on tariff passing on, see, the tariff of 50% is something that we cannot absorb, so we're definitely passing it on to the customer. And the customer, in turn, is averaging out their total purchases from different countries at different tariff rates because, as you know, the U.S. policy has been extremely volatile in the past eight months, so right now, even the customer is taking a wait-and-see approach. Things can change overnight in the current situation with the volatility that we've experienced in the past few months, so they continue to do business as usual. So they are averaging it out and putting it on their shelf, so that we need to see what is the impact on sales in the next, probably in early 2026.
So that said, on the second question, like you said, the short-term impact is not as large as we anticipated, but of course, this will have long-term repercussions. On the short term, as you know, Avanti, as a company, has been diversifying from the U.S. market actively in the past few years. So we do have other customer base outside the U.S., which is continuing to support our manufacturing. So currently, we have not stopped production. We're continuing to produce to our customers around the world. On the margin, I think in the short term, we still look at stable margins and look to have the same profile in the next quarter, at least looking at things today.
Okay. And my second question is regarding the overall guidance. So when we look through the conversation which we had till now, so we are seeing the higher tariffs. Secondly, the second crop is looking difficult on top of that current heavy monsoon and all, which has infected some crops. So how management is confident of achieving 5.6 lakh tons of seed sales in FY 2026 and on top of that, 17,000 metric tons of exports? Where we are seeing such kind of volatility and the heavy dependence on the U.S. market?
Yeah. I think it has two parts. Let me just tell you as far as the production is concerned. So we believe that the production this year is about 5.6 lakh metric tons because the same level as it was in the previous year. See, the first season, we started very well. And in between, we had some setbacks because of the untimely and heavy rainfall and also some spread of diseases and premature harvest.
But now, again, it has picked up. And now the culture is growing well. And we keep continuing to grow shrimp. And as far as the market is concerned, we have a strategy. And Nikhilesh would explain to you that how we are trying to find the markets for the total production, the capacity utilization of our plants, and how to make use of the production that we get. Nikhilesh, could you just give a highlight on that?
Could you repeat that question, please?
The question, what you're saying that because we said that the second crop, that is what is going on now, also will have a good crop we are expecting. This question is that how will you find the market for this increased production because of these tariffs? Am I right?
Okay. Yeah. So just refining my question. So I just want to understand when management is giving a guidance of 5.5 lakh tons of seed sales and on top of that, 17,000 of exports of the VAP products. So how confident we are? Because as I highlighted, just in short term, we are not seeing any impact, but in longer term, it may impact. So how is that going to?
I understood your question, sir. So basically, see, at 50% tariff, it is quite a difficult situation for India as an export market, not only for shrimp, but for all products that are going towards the U.S. That said, because 50% of the total seafood in India is exported to the U.S., there are definitely a lot of works that the country is doing, like signing FTAs with the U.K. and also trying to work with other countries.
It is definitely an impact. So the confidence level is not at a high 90%, definitely, right? Because we are battling a sort of volatility and a high tariff rate in the short term. But on the long term, we hope that India and the U.S. can conclude to some kind of understanding because it's impacting the whole country. But as a company, we are actively diversifying into other markets. We have good clientele. On the first quarter, we reported a 50% jump in sales. So that's a huge amount of sales that we already covered in the first quarter. Second quarter is also looking good. I wouldn't say that there's a big problem. But on the long term, if this tariff continues to stand, definitely there'll be a shortfall in the volumes, what we did last year. And this is not consistent only to Avanti.
It would be consistent with the whole industry, and it would be consistent to the whole country as well, in other industries also. So that said, like I said, we are quite confident that in the long term, we will be able to diversify into other markets. We would be able to work in the domestic market where there's a huge consumer base of more than 1.4 billion people, and we also looked at the India-U.S. relations normalize in the long run. So I hope that answers your question.
Yes, sir. And sir, if you may permit for the last one. So lastly, from the margin viewpoint, so we are sitting on the 29th of August, it's like a 60% completion of the quarter. And on the margin front, how you are doing? Because I guess we are absorbing we did get our part. So considering the current RM price and the volatility, are we expecting around 6%-7% on kind of—
So that we need to see at the end of next month, right? So because we can't disclose it right now.
Okay. That's it from my side. Thank you.
Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question comes from Kumar Divyanshu, an individual investor. Please go ahead.
Yes. Hello.
Hi.
Thank you for giving me the opportunity and for the very good number. My question is, first question, your business of shrimp feed manufacturing. I would like to ask from this aspect that how much domestic market produces of your revenue? Could you suggest me in the percentage there? Because it is one of the largest parts of your business.
The 99% would be the domestic market.
So are you asking shrimp feed or?
No, sir. I'm asking about shrimp feed manufacturing because.
99%, as Nikhilesh said. It's 99% domestic market.
Okay. So accordingly, because this is the largest part of your business, so I think the impact due to the tariff will not much on your revenue?
No. See, we are expecting, as I told you, 5.6 lakh metric tons of seed we are planning to produce and sell this year. So not only the U.S. market shrimp, but also there are other markets also. The production keeps going on for other markets also, though the production will not stop. The shrimp production continues. And we are confident that the production of shrimp will be on the same level as in the previous year. And similarly, the feed also consumption will be on the same level. We do not see any fall or decrease in the sale of shrimp feed or shrimp sales.
Okay, sir, and so then the next question is from the ratio section. The day's payment in March 2025 has been increased, but the rest of the things haven't reduced, so could you please comment on that?
Yes, sir. I'll come back to it.
Can you please repeat again?
Can you please repeat the question?
Sure, sir. In the ratio section, the day's payment in March 2025 has increased as compared to the March 2024. But rest of the ratios are fairly good. They are decreasing. So could you please comment on the day's payment?
Yes. Please hold on here. Yes. The ratio is on 2024. Please give me the page number, please. Can you please give me the page number?
Actually, I'm just checking one of the source data which I have from the online. It is mentioning over there that debtor days in March 2024 was 27, but in March 2025, it trends to 34. But the debtor days, inventory days, cash conversion cycle, working capital days, all are decreasing trend. That is very good. Just this is the concerning point which I want to ask.
No, we don't know where from you.
Where did you get? We don't know.
We don't have the figure. Can you please send the mail? We'll answer you because we are not able to get hold of the numbers which you are speaking about.
Okay. And the next question is, how will you see or how you are seeing upcoming quarter results of September and December is concerned?
We'll have to wait. September is not yet over. No, it has not yet started. So we will see. Let's wait for one more month. I think next quarter, Kumar will be able to discuss more about this quarter's performance.
No, sir. Actually, because of the tariff and also, do you see any decline in the sales or in part of the revenue?
Nikhilesh, could you please take this call? This question.
Could you repeat that question, please?
I'm getting that maybe coming quarter of September and December. So could you please suggest that what will be the effect of tariff on your revenue? Will it get hampered so much, or is there any planning to overcome on it?
I think as of now, if the tariff continues at this rate, I would feel that the impact would be seen not in Q3, but probably in Q4. Because according to our accounting, whatever we're shipping today, only when it delivers into the warehouse of the customer, we recognize it as revenue. So it takes a lead time of 50 days. So I don't think there'll be significant impact in Q3, but we would see more impact in Q4 if the tariff continues to hold this way. And if you ask about Q4, I would just say it would be better to answer this question next month because next con call because things are changing every day. So it's difficult to speculate for the last quarter right now.
So, Chandra, the last question is from your business, from Pet feed and Pet care. So, is there any planning to increase the revenue from both the two segments of your business?
We want to increase. No, there is no. I know we are not yet. See, we don't have any immediate plans for expansion or this thing. We are just watching. There's so much volatility in the market. We want to keep watching this year and take a decision and the Q4. Maybe at that time, we'll get clarity on the future prospects and how things are going. We are now, for the present, we are focusing on the other Pet care and other diversified products.
Okay. Thank you so much. Thank you very much.
Thank you. The next question comes from Ayush Mittal from Mittal Analytics Private Limited. Please go ahead.
Good afternoon, everyone. Am I audible? Hello.
Yes, sir.
Yes, you're audible.
Yeah. First of all, my appreciation to the company for a very good performance when we compare a performance to other peers. Avanti always stands out in terms of what our company has delivered, maintained its leadership in the shrimp feed segment, the margins we have done. All those things are very commendable to the entire team. Now, coming to the current challenges that we are seeing, I think this tariff thing is a big issue when we are reading the newspapers, the amount of tariff which has been put. Though we all would be hopeful that things revert to normal or revert. But as of now, given the negative environment, have we been asked to cut down the feed prices by the government or something?
No, nothing like that because at this point of time, we have recently cut our prices by INR 4. Yes. So there is no such request from the government, not from the farmers. We don't have such requests.
When was this INR 4 cut price?
Yes, INR 4 cut was there.
When was that done?
April. April. April.
April. Okay. So if you see here, feed segment, I think the operating margins are at a very higher side versus the normal margins we used to do. And now that RM prices are also rising, so we should be coming back to the normal margins of 10%-12%. Is that the right number?
Yeah, but these things are highly volatile. As I just mentioned in the initial remark, that the prices are slowly going up. We wish that it will get stabilized again once the new crop of soya and also we get the wheat price, the fish catch is also good. So then the prices, if they remain, definitely we'll have the good margins. But having said this, it's not in our hands.
The raw material prices are dependent on so many factors because there are agri products, soya and wheat, and fish meal depends on fish catches. We cannot say that suddenly the catches drop. It has happened about 15 days back. The catches started declining very fast. So the prices went up. Then when the catches come good, the prices come down. So it's highly volatile. So yes, we only wish that it will be stable, so we should be able to give you better margins.
Got it. Got it. So like you mentioned that this crop was impacted due to very heavy rains. So is that the reason that we are seeing a very sharp drop in export data for the industry in these recent months? Like after Q1 was very good, but the articles that the volumes of shrimp exports have been very much impacted from India. Is it temporary or?
Nikhilesh. Yeah, Nikhilesh. Please go ahead, Nikhilesh.
Yeah. Could you repeat the question, please?
After a very strong Q1, there are certain reports that the shrimp export volumes have fallen dramatically in the last one or two months from India. Is that due to the crop issue we mentioned earlier, or is it due to the tariff or temporary mix?
So it's primarily due to the seasonality. It's monsoon season. So when it's monsoon, it's low season. So the exports will be quite low in that period. There's low availability of raw material. Simply because if it's raining so much, the shrimp will come out of the pond, right? So generally, we consider that as the off-season, point number one. Point number two, President Trump announced the tariff. People were just more cautious on putting product out on the water and then again talk to the customer, get some guidance on what to do with the product. So both these things coupled together would have put an impact on the total export.
Got it. Got it. And like you mentioned earlier, that you expect a revival in coming months?
What do you mean? The revival in total export?
Yeah.
I think currently, right now, I did not say that I expect a revival. I said that we hope that things would normalize in terms of our relationship of India as a country with the U.S.
Sure. Sure. On the animal feed, the pet venture that we have started, is there certain revenue numbers or targets that we have set for this year?
Yes. Nikhilesh? Sorry. Venkata Sanjeev.
We have a target. Yes, sir. We have a target of 10% for this year.
Okay. And given that we are doing a very large expansion in this segment, would we also try to get into some contract manufacturing and other things for MNCs or foreign companies? Because that is how we will be able to utilize our plant given the large investment we are doing. Any thoughts or guidance on that?
Yes. We are looking at all the possibilities that we can do for the bigger players to export when the plant is ready.
Any timelines for that?
It will take a year and a half or so. We're going to start construction of plants by end of this year. So it should take a year and a half or so from there.
Okay. Okay. Got it. Thank you. One more question from my side. Nikhilesh, if you can also talk about the shrimp processing segment. I think we were doing some more expansion on that side. And we were looking to ramp the volumes. However, given the current environment, how are you thinking about that part going forward?
Currently, we are doing a wait-and-see approach. Right now, we put on hold any further expansion because of the current pandemic situation. But in the long-term view, personally, in my personal opinion, I feel that things will normalize. The only question is when. And then we still enjoy a good customer clientele confidence on our product, mainly based on our quality and our range of offerings. So when things normalize, we can quickly get back onto those, put those plants back on track. So right now, they're on hold temporarily. We're also kind of planning long-awaited maintenance projects, etc. It's the right time to do those. So I guess I'm one of the investors in the previous questions asked, is there anything good that we're looking at? It's good for us to focus on some R&D work, maintenance work, etc., in this situation. So I hope that answers your question.
Yeah. Thank you.
Thank you. The next question comes from Rahul Rathi from Purnartha. Please go ahead.
Yeah. Hi. Congratulations on a great set of numbers. I had a question on the supply side, given the tariffs and the fact that you might start CapEx as you get visibility. How does our quality can it be replicated in any other geographies? And is there a moat around our geography and quality at the volume that we are looking at?
That's a good question. Generally, in the markets, Indian product is very good for food service. So this means that when a restaurant chef picks it up, they really enjoy Indian product because of the workmanship, the quality parameters, and the overall quality control over the other peers. So I wouldn't say that it's a moat, but I would say that there's definitely a preference. That's why India accounts for more than 40% of the exports to the U.S. market. Second, shrimp processing itself is a highly labor-intensive work profile. So think about a country like Ecuador with probably, I think, the population is about 50 million or 60 million, and now it's about 1.4 billion. So there's a lot more manpower that's available to do those higher-value products compared to competing nations.
But that said, at a 50% tariff, definitely, there is going to be a shift in the consumer preference and consumption or even the restaurants' buying decisions. So on the short term, I think, like I said in the previous question, this moat will save us on the short term. On the long term, definitely, there would be a reshaping of the supply chain to the U.S. if it continues at this tariff level.
Right. Does volatility in electricity also play a role in quality of shrimps? So I was just looking at Ecuador, and I've seen that there are a lot of power outages. Does that have a role to play?
Yes. Generally, electricity, like you see, like you need to run your cold stores or even your feed mills or even the farm, people need continuous electricity. So if there are outages, then people are running them on diesel engines like we used to do back in the day. So definitely, it affects the cost of production and everything.
All right. But what you're saying is that even with electricity outages, if they have the adequate power, they should be able to maintain quality, and electricity is an important part.
Yeah. It's perishable product, so it's an important part.
Oh. And a certain temperature is important to quality. That's why.
Yeah. It's all cold-chain, right? It's all cold-chain-based, and even in the farm, you're using aerators to feed oxygen into the water for the shrimps, so that's also an important part.
Okay. And is there a time if you don't get it into cold storage, then it starts deteriorating? So is there a certain part of the process that is also a certain reason why India is 40% of exports to the U.S.? And yeah.
I would say, yes, definitely, there's no electricity available, and there's no diesel genset that is on a backup. That means your whole inventory will be written down, right, because they don't have the power. But that's an extreme case. I would say that doesn't. I mean, I wouldn't go into that direction towards electricity. People would generally have a diesel genset with enough fuel to power the plant if they're running that kind of operation.
Okay. In terms of quality consciousness, is Japan the most quality-conscious?
Yes. Japan, for sure, is up there on the quality-conscious customers. I would say, generally, in Japan, Korea are highly quality-conscious. But again, you have these pockets of customers everywhere. In the U.S., there are certain customers that are highly quality-conscious. But overall, as a country, I would say Japan is because they eat fast food with no seasoning, no sauce. So they tend to just steam it and eat it. So they have a higher quality standard for that reason.
Are we exporting to Japan also?
Yeah. Yes. We have a good client in Japan as well.
Is that increasing too?
Yeah. It's increasing. If you see our Asia sales, generally, we've been increasing quarter on quarter over the years.
Is it more than the volume growth in Japan, or is it similar?
I would generally club all these together. The reason being we just want to keep our markets more confidential. So I would say, yes, Japan is part of Asia, and overall, Asia is performing well.
Right. Right. The other thing is, in terms of operating cash flows and CapEx, so right now, it is on hold for shrimp feed and shrimp processing. But any guidance on what kind of CapEx would you be doing for fish feed and pet feed over the next two years?
Yes. The fish feed, as we told you, the trials are going on. If we find a suitable feed appropriate for Indian fish culture, then we'll be able to set up the manufacturing facility. That they will have a CapEx. It will not be very much. It will be a medium-level industry. As far as the pet care is concerned, we have purchased the land, and we are in the process of preparing the DPR. We'll be able to finalize the numbers by next quarter. I think maybe we'll be able to give you the numbers the next quarter when this is called.
Sure. Sure. So thank you. So any CapEx guidance would be generally helpful in thinking.
Certainly. Certainly. We'll share with you as and when we decide on CapEx.
Thank you. Thank you very much.
Thank you.
Okay.
Next question comes from Vincent Andrew from Geojit Financial Services. Please go ahead.
Hi. Good evening. Thanks for the opportunity. So most of the questions have been answered. So I have two questions. What is the best export incentive that you found for this process? And the second question is, considering the price situation, since you have already mentioned the 50%, you may not be able to pass it on to the customers. So are we able to, or is it possible for you to pass on some percentage to the farmers on the supply side? And what is the average farm gate price for this quarter? And currently, what is it?
The incentive is PLI, though. You also missed it.
Roster.
I mean, Roster Funds .
Roster? I think Roster is very good. We don't have any long-term now, as of now. Nikhilesh?
Yes, sir. So I'll answer the second part of the question. On the market as such, so currently, we're able to pass on the increase in duty. So that's been good. We have some good customers who continue to take product, especially because they want product on the shelves for the Christmas/New Year period. So that's one thing. And again, to add to the same thing that I was telling everybody else that we're looking to actively, we're working very diligently to expand into other markets. On the raw material price, we see that as soon as the tariffs were announced, there is some softening in the raw material price. So there is some uptake by the farmer, some kind of softening. But again, that was temporary, and the farm gate prices again started normalizing. So we need to look at this at the long term.
So I would say that everybody can agree that 50% is a very big number. I don't think this is just on some kind of calculation, but it's some kind of duty levied on India to come to negotiate with the U.S. government. So we need to really see where it stands in the long term. But on the short term, there is some softening on the raw material, some customers supporting the tariff increase. So there is all kinds of support, but 50% is too much for the supply chain to take in. Everyone combined together can't put in 50% margin.
Yeah. Thanks for that. Is it possible for you to give the number, the average realization price this quarter?
If you can send an email to us, maybe we can discuss that more in detail over there because then we're talking about 20 different sizes and pricing variants, etc.
Okay. And Roster?
What was the question on Roster?
How much roster amount of incentive received for the account this quarter?
Can you please drop an email so that we will check and confirm?
Thanks.
Thank you. That would be the last question for the day. Ladies and gentlemen, on behalf of Avanti Feeds Limited, this concludes the conference for today. Thank you for your participation and for using Roosevelt Conference Call Service. You may disconnect your lines now. Thank you, and have a good day.
Thank you.
Thanks.