Good evening, ladies and gentlemen, I'm Karthikeyan, moderator for the conference call. Welcome to Avanti Feeds Limited Q3 FY 2026 earnings conference call. We have with us today Mr. C. Ramachandra Rao, Joint Managing Director, CFO, and Company Secretary. Mr. A. Venkata Sanjeev , Executive Director of Avanti Feeds Limited and Avanti Petcare Private Limited. A. Nikhilesh, Director, Avanti Feeds Limited and Executive Director, Avanti Frozen Foods Private Limited. Mrs. B. Santhi Latha, GM, Finance and Accounts, Avanti Feeds Limited. Mr. D.V.S. Satyanarayana, CFO, Avanti Frozen Foods Private Limited, and Mr. K.S. Reddy, CFO, Avanti Petcare 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. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone telephone. Please note, this conference is recorded.
I would now like to hand over the floor to Mr. C. Ramachandra Rao, Joint Managing Director, CFO, and Company Secretary. Thank you.
Thank you, Mr. Karthik. Good evening, ladies and gentlemen. I am pleased to extend a warm welcome to all of you for this investors conference call to review the unaudited financial results for Q3 FY 2026 and for the period ended 31st December 2025. Mr. Venkata Sanjeev and Mr. Nikhilesh, Executive Directors, are joining from the shrimp feed and processing plants respectively. Along with me here are Mrs. Santhi Latha, GM, Finance and Accounts, D.V.S. Satyanarayana, CFO of Avanti Frozen, and K.S. Reddy, CFO of Avanti Petcare Private Limited. To begin with, Mrs. Santhi Latha will present highlights of financial results for the quarter ended 31st December 25 of shrimp feed division and also consolidated financials of the company for the same period. Mr. D.V.S. Satyanarayana will present the financial highlights of shrimp processing and export division. K. Srinivas Reddy will present the status of Petcare project.
After presentation by all of them, we'll take up question and answer session. Over to Mrs. Santhi Latha.
Thank you, sir. Good evening, everyone. Now, I'll take you through the consolidated and standalone financial performance highlights for the quarter and nine months ended 31st December 2025. First we'll go through the consolidated financial results for the quarter ended December 2026, Q3 2026 results. The comparative performance of Q3 FY 2026 with that of Q2 FY 2026 and Q3 FY 2025 have been given in the presentation already circulated. Gross income in Q3 FY 2026 is INR 1,447 crores as compared to INR 1,659 crores in the previous quarter of Q2 FY 2026, a decrease of INR 212 crores by about 12.78%. Compared to Q3 FY 2025 gross income of INR 1,405 crores, there is an increase of INR 42 crores by about 2.99%.
The PBT for the Q3 FY 2026 is INR 222 crores as compared to INR 227 crores in Q2 FY 2026, a decrease of INR 5 crores by 2.2%. Compared to Q3 FY 2025 PBT of INR 184 crores, there is an increase of INR 38 crores by about 20.65%. The nine months results, financial results for the nine months ended 31st December 2025 is the comparative performance of nine months FY 2026 with that of nine months FY 2025 are also given in the presentation already circulated. Gross income in nine months FY 2026 is INR 4,761 crores as compared to INR 4,341 crores in nine months of FY 2025, an increase of INR 420 crores by 9.67%.
The PBT is INR 698 crores in 9 months FY 2026 as compared to INR 526 crores in 9 months FY 2025, an increase of INR 172 crores by about 32.7%. The consolidated results indicate net impact of several factors such as increase or decrease in income, expenditure, and exceptional items relating to both feed and frozen divisions, which will be discussed in the divisional performance of these units individually. Standalone financial results of feed division. Q3 FY 2026 results. The gross income for the Q3 FY 2026 is INR 993 crores as compared to INR 1,200 crores in the previous quarter of Q2 FY 2026, a decrease of about INR 207 crores due to decrease in the quantity of feed sold.
The gross income in Q3 FY 2026 decreased to INR 993 crores from INR 1,073 crores in the corresponding quarter of Q3 FY 2025, a decrease of INR 80 crores. This is offset by the decrease in the sale price and also increase in sales quantity by 13,922 MT. The PBT for Q3 FY 2026 is INR 172 crores as compared to INR 180 crores in Q2 FY 2026. A decrease of INR 8 crores by 4.44% since Q2 is the main reason for the aquaculture industry. Compared to Q3 FY 2025 PBT of INR 167 crores, there is an increase of INR 5 crores by 2.99%, mainly due to decrease in raw material costs.
The feed sales decreased to 118,127 MTs in Q3 as compared to 154,644 MTs in Q2 FY 2026 and from 132,049 MTs in Q3 FY 2026. The nine months FY 2026 results. Gross income in nine months FY 2026 is INR 3,471 crores as compared to INR 3,484 crores in nine months FY 2025. A decrease of INR 13 crores by 0.37%. The PBT is INR 576 crores in nine months FY 2026 as compared to INR 465 crores in nine months FY 2025, an increase of INR 111 crores by 23.87%. The feed sales increased to 438,335 MTs in nine months FY 2026 as compared to 425,537 MTs in nine months FY 2025.
The major raw materials of feed are fish meal, soybean meal and wheat flour. The noticeable development in this quarter is increasing trend of two major raw materials, that is fish meal and soybean meal, resulting in decrease in the profitability when compared with previous quarter. 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 in Q3 FY 2026 to 117 per kg from 98 in Q2 and increased from 93 per kg in Q3 FY 2025. In case of soybean meal, their prices increased to 43 per kg in Q3 FY 2026 from 43 in Q2 FY 2026 and decreased from 46 in Q3 FY 2025. The wheat flour price decreased to 32 per kg in Q3 FY 2026 from 33 per kg in Q2 FY 2026 and 35 per kg in Q3 FY 2025.
The present purchase price of fish meal is INR 145 per kg, soybean meal is INR 56 per kg and wheat flour is INR 32 per kg. While on one hand, the raw materials are instrumental in determining the margins, on the other hand, the status of aquaculture activity conditions such as climate, diseases, et cetera, determine the consumption of feed in terms of volume, which will have an impact on the overall performance of the company. The PBT stood at 16% on revenues during the 9-month period ended December 31, 2025, as compared to 13.3% during the corresponding period of the previous year, that is December 31, 2024. The full impact of reduced and stabilized raw material prices during the 9 months of FY 2026 enabled to achieve 16% PBT.
Considering continuous steep increase in prices of major raw materials like fish meal and soybean meal during the past three months, which will have an impact on Q4 FY 2026, the PBT for the FY 2026 is expected to be around 14.5%-15%. To sum up, in general, FY 2025/26 is expected to be a mix of favorable and challenging seasons for the aquaculture industry, both in respect of shrimp production as well as exports from India and global demand for shrimp exports. Considering the performance during the first nine months of FY 2026 as compared to performance during nine months of FY 2025, the results are likely to register marginal improvement. Shrimp production and feed consumption FY 2025 and company plans for FY 2026.
On the basis of estimated shrimp production of about 8-9 lakh MTs in calendar year 2025, the feed consumption is estimated to be about 11-12 lakh metric ton. The company's feed sales during the 9 months FY 2026 is 4,38,335 MT against 4,25,537 MT in 9 months 2025. It is estimated that the feed sales during FY 2026 would be around 5,55,000 MT. Shrimp processing and export. The export of frozen shrimp during 2024/2025 was to the tune of 7,41,529 MT, worth USD dollars $5,177.01 million.
U.S. is the largest importer with 311,948 MT of frozen shrimp, followed by China 136,164 MT, European Union 99,310 MT, Southeast Asia 58,003 MT, Japan 38,917 MT, Middle East 32,784 MT and other countries 64,403 MT. Frozen shrimp contributed to the major item of export in terms of quantity and value, accounting for a share of 43.67% in quantity and 69.46% of the total U.S. dollar earnings. Frozen shrimp exports during 2024/2025 increased by 8.3% in value terms and 6.06% in U.S. dollar terms and 3.56% by volume.
The company shrimp exports during FY 2025 was 14,149, as compared to 13,444 in FY 2024, an increase of 682 MT. It is estimated that the exports during FY 2026 would be around 16,500 MT. Now I hand over to Mr. D.V.S. Satyanarayana to present highlights of shrimp processing and export division.
Thank you, madam. Good evening, everyone. Now I would like to take you through the financial highlights of shrimp processing and export division. Q3 FY 2026 results. The gross income for Q3 FY 2026 was INR 455 crores as compared to INR 462 crores in Q2 FY 2026. A decrease by INR 7 crores, representing 1.5%, mainly due to decrease in sales quantity by 1,095 metric tons, which represents 23%. The increase in other income during Q3 FY 2026 partially offset the impact of the lower sales volume. The gross income in Q3 FY 2026 increased to INR 455 crores from INR 328 crores during Q3 FY 2025, an increase of INR 127 crores, representing 39% year-on-year growth.
Higher sales in Q3 FY 2026 was driven by an increase in average selling price realization, favorable foreign exchange rates, and increase in other income. The profit before tax, before exceptional items for Q3 FY 2026 stood at INR 52 crores compared to INR 53 crores in Q2 FY 2026, reflecting a marginal decrease mainly due to other income. The profit before tax in Q3 FY 2026 was INR 52 crores, an increase from INR 18 crores in the corresponding quarter, that is Q3 FY 2025, reflecting a significant increase primarily due to improved sales price realization, favorable foreign exchange rate, higher other income, and a reduction in ocean freight rates. Comparison of performance for nine months ended 31st December 2025 with nine months ended 31st December 2024.
The gross income for nine months during FY 2026 was INR 1,296 crores as compared to INR 855 crores in the corresponding nine-month period of previous year, that is FY 2025. An increase of INR 441 crores, representing 52% in the gross income during nine months of FY 2026, is mainly due to increase in sales quantity by 2,804 MT, representing 28% growth and also improved sales, average sales price realization. The profit before tax for the nine months ended FY 2026 stood at INR 130 crores compared to INR 68 crores for the corresponding period in FY 2025, reflecting an increase of INR 62 crores in the PBT.
This growth is mainly attributable to higher sales volumes, improved sales price realization, favorable foreign exchange rates, increased other income, and also there is a marginal reduction in ocean freight rates. With this, frozen results are completed. Now I hand over to Mr. K. Srinivas Reddy to update the status of pet food project. Thank you.
Thank you, Mr. D.V.S. Satyanarayana. Good evening, all. Now I would like to update our pet food project. As already informed, company commenced the trading in cat food and dog food under the Avanti Pet Care brand, that is Avant Furst. The company is planning to expand its food-portfolio with additional flavors in the due course. The response from the pet owners for the both cat and dog food has been highly positive with a strong market acceptance and observed across all regions. During Q3 FY 20 by 2026, the company recorded sales of INR 136.2 lakh compared to INR 95.08 lakhs in Q2 FY 2025-2026, reflecting continued growth moment.
The growth was driven by the increasing patronage of our cat food products as well as the steady traction in the dog food segment. On the market expansion, the company is strengthening its presence in tier one cities and has initiated expansion into tier two and tier three markets. E-commerce operations, our products are now live on Supertails and Amazon platform, strengthening our presence and improving accessibility for our customers nationwide. The company continues to focus on building strong brand visibility for Avant Furst through the ongoing digital market campaign in Instagram and Facebook, that is Avant Furst, enhancing customer awareness and brand engagement across our target audience. On the project side, as informed earlier, the company has purchased a land near Hyderabad, converted from agriculture to non-agriculture use, for setting up a state-of-art manufacturing facility.
The land development works are in progress, and we are in the final stage of finalizing the design and drawing. Upon completion of the detailed project report and the receipt of necessary government approval, construction activity will come in. Now I'll hand over to our GMD, sir, for a closing remark.
Thank you, Mr. Srinivas Reddy. As anticipated, the first season of shrimp culture of this year commenced with highly positive expectation by farmers and all the stakeholders. The farmers preparing ponds and stocking from mid-February 26th, and the stockings are going on, progressing impressively. Along with the increase in shrimp culture this year, as expected, the volume of feed sales also will increase. However, the prices of raw materials, major raw material, particularly fish meal and soybean meal, are increasing steeply as explained by my colleague earlier, impacting on margins. We do hope that prices of these raw materials will stabilize during the course of the year. Reviewing the status of shrimp exports, we have been discussing on impact of reciprocal tariff imposed by U.S. on imports of shrimps from India.
As you all know, there has been a high degree of uncertainty on levy of reciprocal tariff and extent of its impact on seafood industry. It is a positive development to see withdrawal of 25% duty imposed as a penalty for import of Russian oil. It has given much needed relief to the export of shrimps to U.S. The other 25% duty has also been removed. The U.S. government chose to levy import surcharge of 10% on imports. Uncertainty whether it will increase it to 15% still exists, awaiting clarity. Overall, export environment also poised to be more encouraging with the tariffs coming down and the company working on exports to other global markets.
As you are aware, on 20th February 2026, the U.S. Supreme Court ruled in a 6, 3 decision that International Emergency Economic Powers Act, IEEPA, does not authorize the U.S. President to impose tariffs on imports because of the act does not grant clear statutory authority to levy taxes or duties, a power reserved for Congress. As a result of the ruling, I-double E-P-A based tariffs, including reciprocal duties previously imposed, were invalidated and are no longer legally enforceable. U.S. Customs and Border Protection stopped collecting these unlawful I-double E-P-A tariffs effective from 25th, 4th February 2026 by deactivating the related tariff codes. However, the Supreme Court's opinion did not directly address the refund for the duties already collected. Importers may need to pursue refunds through customs process or litigation.
Within hours of the decision, the U.S. administration introduced a new temporary global import surcharge under Section 122 of the Trade Act of 1974, initially set at 10% and subsequently announced to be raised to 15%, effective from 24th February, for up to 150 days. The new surcharge effectively replaces the IEEPA tariffs under a different statutory authority. Having said so much about this tariff, Mr. Nikhilesh would be able to give more, throw more light on this subsequently later on in the course of question and answer discussions. I'll just give the highlights of the Union Budget announced recently. The government has increased allocation to the fisheries sector under schemes such as Pradhan Mantri Matsya Sampada Yojana, with continued focus on aquaculture, value chain development, and export promotion.
The customs duty on imported shrimp feed has been reinstated at 15% to withdraw concession duty at 5% given in the budget of the previous year, that is, 2025. This has been the association has been pursuing with the government for reinstating 15% duty because the imported feed was available at highly reduced prices, making a big competition for the domestic feed manufacturers. This step would help domestic feed suppliers to compete with the imported shrimp feed. The budget emphasizes strengthening cold chain, processing infrastructure and export ecosystem, which is expected to support shrimp processors and exporters. Earlier customs duty rationalization on key feed and processing imports continues to improve cost competitiveness for shrimp feed manufacturers and exporters. Overall, policy direction remains supportive of seafood exports, with a focus on enhancing global competitiveness and boosting value addition.
I think with this, we will take up the questions from the investors. I think we can start with question answers.
Thank you, sir.
Over to you, Mr. Karthik.
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 your telephone keypad and wait for your turn to ask the 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 a question, please press star and one on your telephone keypad. Wait for a moment while the question queue assembles. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. The first question comes from the line of Nitin Awasthi from InCred Capital. Please go ahead.
Hello, sir. Three questions on your core business and two questions on your pet food business.
Mr. Awasthi, you are not audible. Can you just speak a bit louder?
Hello, sir. Am I clearly audible now?
Now it's okay.
Okay. Three questions on your core business, two on the pet food business. I'll start with the core business. We are going to have U.K.'s trade deal be implemented first. The talks are probably from April. We have the implementation of the U.K. trade deal and E.U. by the end of the year. Given that, when these trade deals are implemented, the duty reduction is substantial. Do you see the end market size as a whole increasing?
I think, Nikhilesh would take this call on this question.
Hi. Could you repeat the question, please?
Given that U.K. trade deal and E.U. trade deal, of course, E.U. is expected by the end of this year or beginning of next year, and U.K. by April this year, is going to be at a substantially, what do you call, lower the tariff rate. Because in E.U. we had tariffs up to 26%, in U.K. we had it up to 9%. Given this scenario, do you see the market in E.U. expanding for shrimps itself? Because certainly the price will drop and become more competitive against other proteins.
Yes. I would definitely say that the market access into EU and U.K. would be better. There'd be higher demand coming from these markets. Yes, 100%, because they're reducing duty.
Understood. On U.K., are you already collaborating for April this year without duty or is it still undecided?
Like I think these policies have been announced, these agreements have been announced, but what the industry is watching is when and how quickly are they implemented. There's no news on the implementation, official news on the implementation date. We're hoping that it comes into effect quickly.
If I may add to what Nikhilesh said. I think it is around 6-9 months time they want to complete all the formalities. According to the what is the bilateral trade agreement has to be implemented from both sides. Both governments have to approve that. I think it will take about 6-9 months. That's what I read in a newspaper the other day.
Understood, sir. Next question is on the El Niño impact on the weather. One of our core raw materials, fishmeal, will be very heavily impacted by this weather condition, that is for India. For Ecuador, they have their own challenges with El Niño. How are you reading it for both the countries?
Is this question for fishmeal? Yeah. See, the fishmeal, as you know the same, the catches from this ocean, it depends upon the nature, definitely. The each year it keeps varying. The last year it was not so good in particularly Chile and Peru are the major suppliers of fishmeal to the almost global consumers. This year their catches have been fairly good. The some in between there was less demand for Indian fishmeal because of the availability of fishmeal from Chile and Peru. Again, the prices have gone up again, the demand has gone up from the particularly east, the East Asia, because particularly from Taiwan and other countries, they would like to have a cheaper fishmeal available from India.
As far as the quality is concerned, it is the same. That is how the prices in the Indian fishmeal is going up. Moreover, the dollar is becoming very strong and rupee depreciation is giving a more advantage to the exporters. They compare the price, the local price, domestic price, with the export price. The government also gives some incentive for that, for exports. Overall the fishmeal producers get much higher margins on exports. It is this is definitely going to be a big challenge.
For us, we have made representation to the government to bring some sort of a regulatory mechanism by which the exports are limited and adequate fish meal is available for the domestic consumption. We'll have to wait and see because the government is also interested in getting more and more forex, so they would not really agree to that. We are making our efforts to somehow bring a balance between these two, exported fish meal and domestic availability. Let's wait and see for that.
Understood, sir. Last question on the core business. The shipping rates and the container movement on our export front, are they stable given the Middle East situation at least has died for shipping?
Currently, it's this war is quite new, so right now we don't have any changes.
Our shipping currently is below like the Cape of Good Hope, Africa. We don't expect so much. Of course, there should be some disruption. We need to see what happens. For us, since most of our markets are to U.S., Europe, Japan, I don't think there's any immediate direct effect, but there'll be some kind of trickle-down effect depending on how containers are blocked or inventory is managed by the shipping company. That we need to wait and watch. Understood, sir. Moving to the pet food business,
I'm very sorry to interrupt, Mr. Awasthi. Could you please join back the queue?
Of course. Of course.
Thank you.
Yes. In four minutes.
Aditya Kumar, I request you to respectfully substitute questions in the initial round and join back the queue for more questions. Next question comes from the line of Arjun Khanna from Kotak Mutual Fund. Please go ahead.
Sir, thank you for taking my question. The first query is on the outlook for processing for FY 2027. We have given a target of 16,500 for FY 2026 four quarters. How do we look at FY 2027, given these trade agreements?
Nikhilesh. I'll take that question. Frankly speaking, on a lighter note, you know, things, I must thank the Indian government for taking a proactive approach to support the country and the exporters, not only for shrimp but all the categories, by unlocking and giving good market access to countries like EU and U.K. and also negotiating a trade deal with the U.S. eventually, which now doesn't matter.
Because of all these reasons, of improved bilateral trade, we do expect better market access. Our They're quite robust for the year 2027. Our guidance, I need to relook at it because they're finalizing some of those numbers with the change in tariff structures. Sure. Just to understand, we have capacity of around 28,000. Would that be the right understanding? Yes. 28,000 would be the right understanding. Yes. Sure. The second is, given that there is positivity in terms of the shrimp side of it, do you see farmers seeding more going forward? Because obviously that impacts both on the feed side and processing side. What's the sentiment at the farmer side? It's quite positive.
This is not only for the processor or feed mill or the farmer. Generally, everyone in the supply chain is positive. Even the importers are positive because they don't, you know, it's just a tax that goes into a government coffers, so we can pass it on to the consumer instead of paying taxes. Definitely everyone is happy about it. Just to understand this a little further, in terms of the for us in the processing side, do you see operating leverage kick in for us as volumes move up? Or potentially, given that we are trying to get entry into newer markets, we would try to price a little bit more competitively? I wouldn't say that we would price very competitively because we have better market access.
That means we have better demand for our product. What we need to really say is, see is how do these things pan out, right? These are announcements, and so for them to be implemented, like Mr. Rao had said previously, it might take 6 to 9 months or even longer. I don't even know. It's difficult to comment on that. Once they start kicking in, I think it's more of a long-term perspective that I would take an approach, not only FY 2027, that there should be theoretically better margin. The question that you're asking is quite new, right? It's very, the tariffs were removed 1 month ago. We need to see how this pans out, but theoretically, it should give better margin recovery.
For example, U.S., where we did bring out that post anti-subsidy tariffs have been revised downwards for us.
Are we seeing importers, pulling a lot more, inventory from India, given that now we are a little bit more competitive, with Ecuador and some other countries have been hit by higher tariffs in terms of anti-dumping, CVD, et cetera?
This, it's a very broad question. I'll just try to make it simple. Right now, we're in off-season, so there's not much material-
Okay.
-at the farm level because it's winter. On general level of inquiry level, there's a higher inquiry level, more positivity, more interaction with the customers on their plans for the year. Definitely it's looking positive. Again, we're in the off-season, so we're quite confident. I would say that we're quite confident that demand would come back once the season opens.
I'll get back to the questions, but wishing you all the best.
Thank you.
Thank you. Next question comes from the line of Ronak Shah from Equirus Securities . Please go ahead.
Thanks for the opportunity. My first question is on the feed business. First of all, when the management is guiding for around 5.5 odd lakhs metric ton sort of feed sale in FY 2026, which sounds a bit optimistic or like a practice kind of thing, considering the evolving things wherein majority of the things are favoring us in terms of the overall outlook. How the company is seeing the business in FY 2027 and 2028, and can we expect a mid to high single-digit sort of growth rate in terms of the overall feed sales volume?
The growth of volume depends on the circumstances prevailing during the main culture seasons, that is first season and the second season. As you know that, year after year, these climatic conditions keep changing, and last year we had lot of problems in the climatic conditions, and this year we are hoping that the climate would be more friendly and more suitable for the aquaculture, improved aquaculture. With this hope and with this confidence, all the farmers have really worked out and making efforts to increase the area of culture this year. Also those who have left the culture the time of COVID, also have now trying to see that whether they can start, restart this.
With these positive developments, we are expecting that the growth would be better this year and but this is still a very primitive stage. We have just started the stockings and as we see next couple of months, we will know how the culture keeps progressing. Depending upon that, we would be in a position to estimate the growth that we can expect in the first season. Of course, you know, each year, season is peculiar, unique by itself, so we'll know what would be the first year season's real demand for the feed, and also thereafter the second season will start. It's very difficult to exactly estimate, but we, with all the present circumstances, we expect that there should be minimum 10% growth in the feed volume consumption, if not more.
With this area of culture going up and farmers are also very positive about the culture season ahead. With this, we'll be able to see a growth of about 10%, if not more.
Understood. Understood. Secondly, sir, when we see the gross margin for the feed division, when we were into the 2Q FY 2026 conference call, wherein you were highlighting increase in the fish meal and soybean meal prices. When we see the third quarter's number, we can see a few improvement into your gross margin. Have you taken some price hike into the feed division? Going forward, how you are seeing those numbers panning out?
What has happened here is the averaging of the raw material cost has really given that additional advantage in the Q3. What is happening is when the prices keep going up, we follow the weighted average consumption. The prices, earlier low prices will have some impact on the Q3 raw material prices also. That's how we have got a better, you know, improvement than what I said in the last the call investors call. But again, this again, I'm saying the same thing now, because Q4 is going to be again, the same story repeats.
That is the reason why when we said that the average increase in the profitability is likely to be more, about 1% to 1.5% more than what it was there earlier. If you look at nine months, it is very good. About 16% we have recorded. That is not going to be there for the average for the whole year when we complete by March 31, 2026. That could be around 15%, 14.5%-15% because of the price hike. These raw material prices, because of the averaging, that difference in profitability comes in quarterly results.
Understood. Can we expect around two to three months more, we are having those low cost inventory which is likely to consume and then after we will see.
Yes. Yes. Yes, you are right.
Understood. Lastly, on the processing business. We can see a significant improvement into the realization for KG. However, if we see from the EBITDA front, there was some steep increase in your OpEx into the third quarter. Can you explain the reason for that and how we are seeing the profitability in these division going forward considering the updates across the macro?
Nikhilesh, would you like to take this one?
Yeah. I think my colleague had clearly explained the point that there was better volume, there was better realization of price realization, better other income. All these pretty much are the main reasons for the better margin. On top of that, we were able to pass on the tariffs, which now have been reversed. That's the main point of it. We also diversified into other markets which were, which was good, considering the instability or volatility in the U.S. market, which was positive in just running the operations continuously. Yeah, I hope that answers. The note that my colleague said was actually, like, on point.
Just on the your OpEx front, as I was asking that, currently we have around INR 191 crores sort of OpEx vis-à-vis your INR 77 crores last year. What led to this steep jump in current quarter, and what can be the sustainable run rate for that?
The major reason for going up the OpEx was because of the reciprocal tariff, which was the highest at 50% during Q3 FY 2026. That is the reason, major jump, so you can see in OpEx.
Okay. We are accounting that into our OpEx part.
Yes. Yes.
Okay. Okay. That's it from my side. Thank you.
Thank you.
Thank you. Next question comes from the line of Saurabh Bhanek from VIEAS Consultants. Please go ahead.
Good evening, sir. Am I audible?
Yes, yes. Please go ahead.
Congratulations on a mixed set of numbers. I just want to clarify from all of you that, in FY 2027, what are the target markets for all the business segments that we're looking for? Is just a plan that you made? If it is made, if you can explain this?
For FY 2027, we are working on the projections, because till recently, you know, we had so many challenges, like tariffs and also our own culture season, how it's going to be, and what efforts we should be make to encourage the farmers to undertake more culture. All this planning was going on. We are in the process of preparing the, you know, budgets for the 2026, 2027. I think we'd be able to share with you sometime. The next call, we should be able to give you more details on that.
Okay. Thank you so much for the clarification. Sir, one more question regarding this. In Africa and West Asia and overall Asia, you are also taking a few market share and operating as well. How much expectations of that sales realization that you expect from, you know, this Asia and Africa as well? If you please, share these at least.
Nikhilesh, is it good to...
Hi. Can you repeat the question?
Yes, sir. What you said, sir?
Can you repeat?
Okay. In FY 2027, as I said, so your plans and projections are on. I just want to know that in Africa and in Asia, are there any opportunities to grow your markets for all the, you know, business segments that we are operating?
Africa generally it's in terms of income level, quite low. The opportunity in Africa may be not immediate, but more long-term, so I wouldn't say in the immediate next two, three years. Asia in particular has been doing quite well. If you see our share in Asian markets is has been growing over the past few years, so we're still very bullish on the Asian market. We do expect higher sales towards this region.
For speed is concerned, we are making efforts to go to the Middle East and we are trying to enter that market. Trials are going on and the culture there, we are supporting them with the technical advice and also we have sent some trial products also to feed to them. We are making efforts to supply to these, this, I mean, Middle East countries also for this shrimp feed, like wait and see.
Okay. sir, can you please share your, I mean, percentage, how much, how far are your, I mean, your trials in? Is it 50%, 60% or 70% completion? If you just share the number.
Sir?
I mean, how much?
Nikhilesh, can you come back on this one?
We can't use this as a percentage, right? Because this is like it's like a trial, so we cannot give.
Okay, sir. Okay.
Yeah.
Okay, sir. Got your answers. Lastly, sir, one question on financial numbers. Is there any expectations of yours or calculations that how much numbers on top line and bottom line you will end this year, I mean, FY 2026?
Not now. We are still working on that.
After 30 days we will close the quarter. We can-
Okay.
Exactly, yeah.
Okay. Okay. Okay, sir. Congratulations. Okay.
Thank you. The next question comes from the line of Akhilesh Rawat from Ridhanta Vision Private Limited. Please go ahead.
Hi. My question is regarding pet food business. I just want to understand, like, how we are going to, you know, penetrate the market. The market is, you know, surrounded by and dominated by some few key players. Could you please shed some light on your plan, like in long term, how are we going to, you know, penetrate the market?
Venkata Sanjeev , can you please take this question?
Hi. Right now we are concentrating mostly on the product itself. The product has gotten great reply from the market, and all the dog owners and the cat owners who have used it are becoming a repeat customers. Product is going to be the key for it. Also we're going to soon launch new products, which will compete with the bigger brands, with better quality. That's what has been our goal since the start.
Okay. sir, if you could please shed light on some revenue figures, like our major revenue is coming from dog food or cat food?
Dog food is around 60%-65% and the rest.
If you could, shed some light on some margin guidance, what kind of margin are we looking from this business in long term?
Mm. Uh, whether-
Can I take this call, I mean, Venkata Sanjeev , would you like to answer this call?
I think it's better with you answer.
See, the margins, I think it is too premature to talk about the margins at this stage because we have just started and, you know, the initial years we'll have to incur lot of expenditure on the promotion of the product and building the brand image. We'll have to do lot of work on that and more expenditure is incurred to create the brand image and to various market segments also we have to see, and also the regions. See, this product is supposed to be marketed pan-India. We are now concentrating on region-wise, east, west, north, south, like that we have divided, and we are in the process of recruiting people to and also to e-commerce also we are penetrating into the market.
To make the product visible, availability is a very important aspect in this kind of business. Simultaneously we have our own distributors as well as e-commerce. It will take some time for us to develop this, give the numbers and margins. Because the initial expenditure is high. Moreover, see now we are doing it more of a trading. The real benefit of this comes to the company when we start our own production. As long as you import the product, you know the price, how the foreign exchange, that the rupee getting depreciated as well as the dollar, and all when we import and distribution and all the expenses are going to be higher.
When we start our production, maybe in next 1 year or 16, 12, 14, 15 months, we should be able to start our own production. When the real, you know, benefit of the project would be seen at that time. Now it is only the process is only to develop the brand and stabilize the market base. People should know that Avanti's product is available and which are the flavors that whether it is a dog food or a cat food. We are focusing mostly on that. Also recruiting the people to promote the product. Business promotion is another important thing. These are the 2 things which we are doing with expenditure. At this stage, it is very difficult to make any margins at this point of time.
Last question regarding this only. Sir, as you have said that, we are going to start our own production, so how much CapEx are we going to do or is it, or do we have any facility as of now running in which we will do production? That's my last question, sir. Thank you.
We have purchased the land. Land development is going on. We are working with our collaborators for preparing the drawings and also the machinery estimates, civil works, all this work is in actively working on that. We should be able to really give the clear estimate of the total project cost. Maybe, next couple of months we should be able to do it. We'll start working on the drawings and we, you know, in India, we need so many approvals from the government to start the construction itself. We'll, we will start working on that. Once we get the approvals, we'll start the construction. The total estimated cost of the project and profitability, et cetera, we'll be able to give you maybe the next one or two quarters results.
Thank you so much, sir. Thank you for taking my question. Thank you. All the very best for upcoming quarters.
Thank you. Thank you.
Thank you. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. Next, we have a follow-up question from Nitin Awasthi from InCred Capital. Please go ahead.
Thank you for the opportunity for follow-up question. Nitin, the questions are a few questions on the pet food business. Number one, our products were on display and available for purchase on Supertails last quarter. We aim to expand it to Amazon. You mentioned expanding it to Amazon before, however, it's still not visible on the portal.
Nikhilesh, Venkat, can you know, take this one.
Yes. We've been working with Amazon. Since there's another brand called as Avant, which sells shoes, and they've been there for a longer time. They've been visible on the top, but we are working with Amazon to get our brand on top of the page.
Understood. Understood. On follow-up on that, Amazon pet foods, if you go on that page, they have started their own brand, which is a tough call given that any other online supplier that you use could also start their own brand. You guys have given any thought to that, whether this will be successful or not successful or as a threat, do you see it as a threat? Because, you know, distributor having its own brand.
Okay. Could you repeat that question again, please?
Amazon. on Amazon, pet food page, where all the other brands are displayed, and you are aiming for your own brand to be displayed, has started its own pet food brand.
Yeah.
It's also been upfront about it, you know, in the labeling and marketing and the packaging saying it's an Amazon brand. Given that significant amount of pet food is being bought by online distributors, do you see this as a threat going forward? Even at Supertails, I think your brands are at display and all throughout the last five months, they have been increasing. More and more products have been showing on Supertails. I'm also hearing good feedback from people. Do you see this as a threat that the distributor website itself has started its own brand?
Yes, we do see it as a threat that a distributor can start his own page, but he won't be able to give the same discounts as the company is being able to give. I think that's going to affect their business more than ours.
Understood, sir. Thank you.
Thank you. I have the next question from the line of Karan Sharma from Current Capital. Please go ahead.
Hello. Am I audible? You are audible.
No, you are not. Can you speak a bit louder, please?
Am I audible now? Hello. Is this better? Yeah. Nikhilesh, my question was to you. In the shrimp processing division, we have seen in last 9 months decent volume growth. What I was asking was that since this chaos of the last 1 year where duties were changed, do you see any possibility of gaining reasonable market share, considering your market share volume-wise in the last 4-5 years has been quite stagnant in this division, around the 1%-2% mark. Considering this is a very fragmented market as you had, guys had mentioned earlier, with these recent changes in the last 12-15 months, do you think there is a possibility of gaining decent market share now in this segment?
Market share in the country? That's what you.
In terms of global market. Yeah, in terms of the players in the country. Yeah, correct.
Historically, right, this has been, especially in India, it's been very fragmented. There are like 100+ packers. That way it's just because of the size of the country that people on the West Coast, East Coast, different areas, different people specialize. Some people trying to move only commodity. We try to do more value added. That said, like if you just look at in a broad perspective, right, about when we formed the JV with Thai Union for the processing division, we were, I think, below we're not even top 10 importers. Now we've climbed the ranks and is amongst the top importers for those mission today. That way we have been increasing our volume.
Also, we're also looking to play where there's better margin by doing more value-added products and trying to work with more premium clientele, where their expectations are, they're very demanding generally. That's that. In the next few years, from FY 2027 onwards, our main target is to scale, continue to scale. If you see our CAGR % on volume or revenue, every year we've continued to grow the business step by step. And with food processing, that's the way to do it, because when a consumer gets the bag of shrimp, they find any problem, they raise complaint, right? And food safety issue itself is very sensitive. Every year we're going to increase step by step.
We're quite confident, and that's how we see, we've showed the business growth in last 10 years.
Okay. Okay. Thank you.
Thank you. Thank you, sir. There are no further questions. Now I hand over the floor to Mr. C. Ramachandra Rao for closing comments. Thank you for all the investors for actively participating and sharing your views on the performance of the company, the quarter and also as nine months ended 31st December 2025. I conclude this conference call with a note that the next call we'll be able to really see the year-end results as well as the future planning of the company. Thank you for your time. Thank you very much.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using this above conference call service. You may disconnect your lines now. Thank you, and have a blessed day.