APEX - Apex Frozen Foods Limited Share Price

In the Q3 FY26 Earnings Conference Call held on February 16, 2026, management provided a positive outlook for Apex Frozen Foods. The key points include:

1. Revenue Growth Expectations: Management anticipates revenue to exceed INR 1,200 crores over the next two years, driven by increased capacity utilization and improved demand from the U.S. and EU markets.

2. Financial Performance: For Q3 FY26, net revenue grew 15% year-on-year to INR 264 crores, partially due to higher shrimp sales to the European Union. EBITDA surged 147% year-on-year to INR 17 crores, with an EBITDA margin improvement of 344 bps to 6.5%. The profit after tax increased to INR 10 crores from roughly INR 0 lakhs in Q3 FY25.

3. Market Diversification: The non-U.S. export business expanded significantly from 37% of revenues in FY24 to approximately 51% in FY26, highlighting efforts to reduce dependence on the U.S. market.

4. Tariff Development: Tariffs on Indian shrimp exports to the U.S. were reduced to 25% effective February 7, 2026, from a previous 50%, which is expected to facilitate higher volumes and revenues.

5. Future Demand: Management sees positive momentum from the EU free trade agreement which is expected to result in gradual tariff reductions. This is anticipated to support medium- to long-term growth.

6. Sustainable Profitability: The management is confident that EBITDA levels will remain stable in the range of 7%-10% as the company capitalizes on improved market conditions and increasing sales volumes.

7. Market Conditions: A seasonal uptick in farmgate prices indicates a rebound in supply, which, combined with easing tariff pressures would likely enhance utilization rates in the coming quarters.

In essence, management is optimistic about the future, citing structural improvements in tariffs, broader market access, and diversification strategies as foundations for sustained growth and profitability.

1. Question: Considering the Europe FTA and the reduction in tariffs from the U.S., what kind of revenue are we expecting in 2 years? What about margin expectations?

   Answer: We anticipate revenue growth to exceed INR 1,200 crores in the next two years due to increased market volumes and utilization from the EU and U.S. tariff reductions. Margins are expected to remain stable at the EBITDA level, reflective of a healthy pricing environment alongside fluctuating raw material costs.

2. Question: Do you include the UK market in your EU figures?

   Answer: No, the UK is not included in the EU figures; it is categorized under others.

3. Question: What is the status of hatchery demand since January?

   Answer: Hatchery operations have improved as temperatures rise and tariff barriers have been reduced, which has uplifted farmers' confidence. Thus, we are witnessing increased stockings, positively impacting future supply.

4. Question: How much have tariffs influenced realized sales prices?

   Answer: Average realizations were INR 914 per kilo, which includes U.S. tariff components. Tariffs considerably affected sales volumes to the U.S., leading to higher realized costs. For 9 months, realizations improved to INR 864 per kilo.

5. Question: What are the projections for capacity utilization by FY '27?

   Answer: We expect to increase capacity utilization from approximately 33-35% to around 50% by FY '27, driven by growth in both traditional and ready-to-eat product lines.

6. Question: What are the export incentives for the first 9 months?

   Answer: The export incentive for the first nine months was INR 37.62 crores.

7. Question: How is the company's approach to managing financial risks and uncertainties?

   Answer: We ensure timely receivables and manage forex risks through forward contracts. Our working capital days are reducing due to improved debtor performance and liquidation of inventory.

8. Question: How will you manage risk from global shrimp demand and raw material cost uncertainties?

   Answer: Diversification into multiple markets helps mitigate risks from demand fluctuations. Stable demand and production strategies enable us to better manage raw material costs, ensuring supply continuity.

9. Question: Have you noticed any tariff-related inquiries from the U.S. post-reduction?

   Answer: Yes, there has been a significant increase in order inquiries from the U.S. market following the reduction in tariffs, signaling a positive outlook for our sales.

10. Question: Is there any update on the antidumping duty review by the U.S.?

    Answer: Yes, the U.S. has increased the antidumping duty to about 3.5%. This will affect our financials in upcoming quarters, as the retrospective effect has recently been announced.