Avanti Feeds Limited (512573) Q3 FY2026 Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. I am Karthikeyan, moderator for the conference call. Welcome to Avanti Feeds Limited Q3 FY '26 Earnings Conference Call. We have with us today Mr. S. Ramasandrara; Joint Managing Director, CFO and Company Secretary; Mr. A. Venkata Sanjeev, Executive Director of Avanti Feeds Limited and Avanti Pet Care Private Limited; Mr. 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. Satyanarayana, CFO; Avanti Frozen Foods Private Limited; and Mr. K.S. Reddy, CFO; Avanti Pet Care Private Limited. [Operator Instructions] 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 '26 and for the period ended 31st December 2025. Mr. Venkata Sanjeev and Mr. Nikhilesh, Executive Directors are joining from the shrimp feeds and processing plants, respectively. Along with me here are Mrs. Santhi Latha, GM Finance and Accounts; D. V. Satyanarayana, CFO of Avanti Frozen; and K.S. Reddy CFO of Avanti Pet Care 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. Thereafter, Mr. D. V. Satyanarayana will present the financial highlights of shrimp processing and export division. Thereafter, K. Srinivas Reddy will present the status of pet care project. After a presentation by all of them, we'll take a question-and-answer session. Over to Mrs. Santhi Latha.

Thank you, sir. Good evening, everyone. Now I'll take you through the consolidated and stand-alone financial performance highlights for the quarter and 9 months ended 31st December 2025. So first, we'll go through the consolidated financial results for the quarter ended December '26, Q3 '26 results. So the comparative performance of Q3 FY '26 with that of Q2 FY '26 and Q3 FY '25 have been given in the presentation already circulated. Gross income in Q3 FY '26 is INR 1,447 crores as compared to INR 1,659 crores in the previous quarter of Q2 FY '26, a decrease of INR 212 crores by about 12.78%. Compared to Q3 FY '25, 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 '26 is INR 222 crores as compared to INR 227 crores in Q2 FY '26, a decrease of INR 5 crores by 2.2%. And compared to Q3 FY '25 PBT of INR 184 crores, there is an increase of INR 38 crores by about 20.65%. The 9 months results -- financial results for the 9 months ended 31st December 2025 is, the comparative performance of 9 months FY '26 with that of 9 months FY '25 are also given in the presentation already circulated. Gross income in 9 months FY '26 is INR 4,761 crores as compared to INR 4,341 crores in 9 months of FY '25, an increase of INR 420 crores by 9.67%. The PBT is INR 698 crores in 9 months FY '26 as compared to INR 526 crores in 9 months FY '25, 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. So stand-alone financial results of feed division. For Q3 FY '26 results, the gross income for the Q3 FY '26 is INR 993 crores as compared to INR 1,200 crores in the previous quarter of Q2 FY '26, a decrease of about INR 207 crores due to decrease in the quantity of feeds sold. The gross income in Q3 FY '26 decreased to INR 993 crores from INR 1,073 crores in the corresponding quarter of Q3 FY '25, 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 '26 is INR 172 crores as compared to INR 180 crores in Q2 FY '26, a decrease of INR 8 crores by 4.44% since Q2 is the main reason for the aquaculture industry. And compared to Q3 FY '25 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 '26 and from 132,049 MTs in Q3 FY '25. So the 9 months FY '26 results. Gross income in 9 months FY '26 is INR 3,471 crores as compared to INR 3,484 crores in 9 months FY '25, a decrease of INR 13 crores by 0.37%. The PBT is INR 576 crores in 9 months FY '26 as compared to INR 465 crores in 9 months FY '25, an increase of INR 111 crores by 23.7%. Feed sales increased to 438,335 MTs in 9 months FY '26 as compared to 425,537 MTs in 9 months FY '25. The major raw materials of feed are fishmeal, soybean meal and wheat flour. The noticeable development in this quarter is increasing trend of two major raw materials, that is fishmeal 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 fishmeal increased in Q3 FY '26 to INR 117 per kg from INR 98 kg in Q2 and increased from INR 93 per kg in Q3 FY '25. In case of soybean meal, their prices increased to INR 43 per kg in Q3 FY '26 from INR 43 kg in Q2 FY '26 and decreased from INR 46 kg in Q3 FY '25. However, the wheat flour price decreased to INR 32 per kg in Q3 FY '26 from INR 33 per kg in Q2 FY '26 and INR 35 per kg in Q3 FY '25. The present purchase price of fishmeal is INR 145 per kg, soybean meal at 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 31st December '25 as compared to 13.3% during the corresponding period of the previous year, that is 31st December 2024. The full impact of reduced and stabilized raw material prices during the 9 months of FY '26 enabled to achieve 16% PBT. Considering continued steep increase in prices of major raw materials, like fishmeal and soybean meal during the past 3 months, which will have an impact on Q4 FY '26, the PBT for the FY '26 is expected to be around 14.5% to 15%. To sum up, in general, FY '25-'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. However, considering the performance during the first 9 months of FY '26 as compared to performance during the 9 months of FY '25, the results are likely to register marginal improvement. Shrimp production and feed consumption FY '25 and company plans for FY '26. On the basis of estimated shrimp production of about 8 lakh MTs to 9 lakh MTs in calendar year 2025, the feed consumption is estimated to be about 11 lakh metric tons to 12 lakh metric tons. The company's feed sales during the 9 months FY '26 is 438,335 MT against 425,537 MT in 9 months '25. It is estimated that the feed sales during FY '26 would be around 555,000 MT. Shrimp processing and export. The export of frozen shrimp during '24-'25 was to the tune of 741,529 MT worth USD 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 as 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 '24-'25 increased by 8.3% in value terms and 6.06% in U.S. dollar terms and thrice -- and 3.56% by volume. The company's shrimp exports during FY '25 was 14,149 MT as compared to 13,444 MT in FY '24, an increase of 682 MTs. It is estimated that the exports during FY '26 would be around 16,500 MT. Now I hand over to Mr. D. V. 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%. However, 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 rates, higher other income and a reduction in ocean freight rates. Comparison of performance for 9 months ended 31st December 2025 with 9 months ended 31st December 2024. The gross income for 9 months during FY 2026 was INR 1,296 crores as compared to INR 855 crores in the corresponding 9 months period of previous year, that is financial year 2025, an increase of INR 441 crores, representing 52% in the gross income during 9 months of FY 2026. This is mainly due to increase in sales quantity by 2,804 metric tons, representing 28% growth and also improved average sales price realization. The profit before tax for the 9 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. Yes, 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. Satyanarayana. Good evening all. Now I would like to update our pet food projects. As already informed, company commenced the trading in cat food and dog food under the Avanti's pet care brand that is Avant Furst, the company is planning to expand its portfolio with additional flavors in due course. The response from the pet owners for the both cat and dog food has been highly positive with a strong market acceptance observe across all regions. During Q3 FY '25-'26, the company recorded sales of INR 136.2 lakhs compared to INR 95.08 lakhs in Q2 FY '25-'26, 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 1 cities and has initiated expansion into tier 2 and tier 4 markets. E-commerce operations, our products are now live on Supertails and Amazon platform, strengthening our presence and improving accessibility for our customers national wide. 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 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 approvals, construction activity will commence. Now I'll hand over to our MD sir for our closing remarks.

Thank you, Mr. K.S Reddy. As anticipated, the first season of shrimp culture of this year commenced with highly positive expectation by farmers and all the stakeholders prepare -- the farmers preparing points and starting from mid-February '26, and restock things are going on 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 fishmeal and soybean meal are increasing steeply as explained by my colleague earlier, impacting our margins. We do hope that prices of these raw materials will stabilized during the course of the year. Given the status of ship 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 the 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.A. Further, the other 25% duty has also been removed. However, the U.S. government chose to levy import surcharge of 10% on imports, but uncertainty whether it is increased 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 or imports because the act does not grant clear statutory authority to levy taxes or duties, a power reserved for Congress. As a result of the ruling, IEEPA based tariffs, including the reciprocal duties previously imposed, were invalidated and are no longer legally enforceable. U.S. Customs and Border Protection stopped collecting these unlawful IEEPA tariffs effective from 24th February 2026 by deactivating the related tariffs 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 at 15% effective from 24 February for up to 150 days. The new surcharge effectively replaces the IEEPA charge under a different statutory authority. Having said so much about the tariffs, Mr. Nikhilesh would be able to give more -- throw more light on this subsequently later on in the course of question-and-answer discussions. Now I'll just give the highlights of the union budget announced recently. The government has increased allocation to the fishery 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%, but withdrawing 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. There were 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 custom 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. Over to you, Mr. Karthik.

[Operator Instructions] First question comes from the line of Nitin Awasthi from InCred Capital.

I have three questions on your food business and two questions on the new pet food business.

Awasthi, you are not audible. Can you just speak a bit louder?

Am I clearly audible now?

Now, it's okay.

Okay. So three questions on your core business, two on the pet food business. I'll start with the core business. So we are going to have U.K's. trade deal be implemented first. The talks are probably from April, we'll have the implementation of the U.K. trade deal and EU 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?

Yes. I think, Nikhilesh, would take this question.

Could you repeat the question, please?

Given that U.K's. trade deal and EU trade deal, of course, EU 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 you call, lower the tariff rate because in EU we had tariffs up to 26%, in U.K. we had it up to 9%. So given this scenario, do you see the market in EU expanding for shrimps itself? Because sadly, 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. And on U.K., are we already collaborating for April sales without duty? Or is it still undecided?

So 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. So there's no official news on the implementation day. We're hoping that it comes into effect quickly.

If I may add to what Nikhilesh said, I think it is around 6 to 9 months' time they want to complete all the formalities according to what is the bilateral trade agreement. It has to be implemented from both sides. Both governments have to approve that. I think it will take about 6 to 9 months. That's what I read in newspaper the other day.

Understood. Sir, next question is on the El Nino impact on the weather. One of our core raw materials, fishmeal, will be very heavily impacted by this weather condition, that is for India. And for Ecuador, they have their own challenges with El Nino. So how are you reading it for both the countries?

Is this question for fishmeal? See, the fishmeal, as you know, the same, the catch is from the ocean. It depends upon the nature, definitely. Each year, it keeps varying. But the last year, it was not so good in particularly Chile and Peru or the major suppliers of fishmeal to the almost global consumers. And this year, their catches have been fairly good. And in between, there was less demand for Indian fishmeal because of the availability of fishmeal from Chile and Peru. But again, the prices have gone up. Again, the demand has gone up from particularly East, the East -- West 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. So they compare the price and local price, domestic price as with the export price and the government also gives some incentive for that for exports. So overall, the fishmeal producers get much more higher margins on exports. So this is definitely going to be a big challenge for us. And we have made a representation to the government to bring some sort of a regulatory mechanism by which the exports are limited and adequate fishmeal is available for the domestic consumption. But we'll have to wait and see because the government is also interested in getting more and more ForEx. So they would not readily agree to that, but we are making our efforts to somehow bring a balance between these two, exported fishmeal and domestic availability. We'll have to 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 is bad for shipping?

Currently, 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. So we don't expect so much, but of course, there should be some disruption. We need to see what happened. 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 will be some kind of trickle-down effect depending on how containers are blocked or inventory is managed by the shipping company. So that we need to wait and work.

Next question comes from the line of Arjun Khanna from Kotak Mutual Funds.

The first query is on the outlook for processing for FY '27. So we have given a target of 16,500 MT for FY '26 fourth quarter. How do we look at FY '27, given these trade agreements?

I'll take that question. So frankly speaking, on a lighter note 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. But because of all these reasons of improved bilateral trade, we do expect better market access. So we're quite robust for the year '27. But our guidance, I need to relook at it because we're finalizing some of those numbers with the change in tariff structure.

Sure. So just to understand, we have capacity of around 28,000 MT. Would that be the right understanding?

Yes, 28,000 MT would be the right understanding.

Sure. The second is, given that there is positivity in terms of the shrimp side of it, do you see farmers feeding more going forward because obviously, that impacts both on the feed side and processing side. So what's the sentiment at the farmer side?

It's quite positive. This is not only for the processor or feed mill or farmer. Generally, everyone in the supply chain is positive, even the importers are positive because they don't -- it's just a tax that goes into a government coffer, so we can pass it on to the consumer and sort of from paying taxes. So definitely, everyone is happy about it.

Just to understand this a little further. In terms of the margins for us on the processing side, do you see operating leverage taken 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. But what we need to really 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. But once they start kicking in, I think it's more of a long-term perspective that I would take an approach, not only FY '27, that there should be theoretically better margin. But the question that you're asking is quite new, it's very -- tariffs were removed a month ago. So we need to see how this pans out. But theoretically, it should give better margin recovery.

So for example, U.S. where we did bring out that post end Feb, tariffs have been revised downwards for us. Are we seeing importers pull in 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 antidumping, CVD, et cetera?

So it's a very broad question. I'll just try to make it simple. So right now, we're in off-season. So there's not much material at the farm because it's winter. But on general level of inquiry level, there's a higher inquiry level, more positivity, more interactions with the customers on their plan for the year. So definitely, it's looking positive. But again, we're in the off season. So we're quite confident. I would say that I'm quite confident that demand would come back once the season opens.

Next question comes from the line of Ronak Shah from Equirus Securities.

So my first question is on the feed business. So first of all, when the management is guiding for around 5.5-odd lakh metric ton sort of feed sales in FY '26, which sounds a bit optimistic or like a flattish kind of thing, considering the evolving things wherein majority of the things are favoring us in terms of the overall outlook. So how the company is seeing the business in FY '27 and '28? And can we expect a mid- to high single-digit sort of growth rate in terms of the overall feed sales volume?

See, the growth of volume depends on the circumstances, the prevailing, during the main culture seasons, that is the first season and the second season. So as you know that year after year, these climatic conditions keep changing. And last year, we had a lot of problems in the climate conditions. And this year, we are hoping that the climate would be more friendly and more suitable for the aquaculture, improved aquaculture. And 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 at the time of COVID, also have now trying to see that whether they can restart this. So with these positive developments, we are expecting that the growth would be better this year. But this is still a very primitive stage. We have just started the stoppings. 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, each season is peculiar, unique by itself. So we know what would be the first season's real demand for the feed. And also thereafter the second season will start. So it's very difficult to exactly estimate. But with all the present circumstances, we expect that there should be a minimum 10% growth India feed volume consumption, if not more, because this area culture going up and farmers are also very positive about the culture season ahead. So with this, we'll be able to see a growth of about 10%, if not more.

Understood. Secondly, sir, when we see the gross margin for the feed division. So when we were into the 2Q FY '26 conference call wherein you were highlighting increasing the fishmeal and soy meal prices. But when we see the third quarter's number, we can see a Q-o-Q improvement into your gross margin. So have you taken some price hike into the feed division? And going forward, how you are seeing those numbers panning out?

So what has happened here is, the averaging of the raw material cost has really given that additional advantage in the Q3. So what is happening is when the prices keep going up, we follow the weighted average consumption. So the prices earlier, low prices will have some impact on the Q3 raw material prices also. That's how we have got a better improvement than what I said in the last investors call. But again, I'm saying the same thing now, because Q4 is going to be, again, the same story repeats. So 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. But if you look at 9 months, it is very good. About 16% we have recorded. But that is not going to be there for the average for the whole year when we complete by 31st March 2026. So that would be around 14.5% to 15% because of the price hike. So these raw material prices because of the averaging, that difference in profitability comes in quarterly results.

Understood. So can we expect around 2 to 3 months more, we are having those low-cost inventory, which is likely to consume and then after we will be seeing the...

Yes, you're right.

Understood. And sir, lastly, on the processing business. So we can see a significant improvement into the realization per kg. However, if we see from the EBITDA front, there was some steep increase in your OpEx into the third quarter. So can you explain the reason for that? And how you are seeing the profitability in this division going forward, considering the updates across the macro?

Nikhilesh, would you like to take this?

I think my colleague had clearly explained the point that there was better volume. There was better realization of price realization, better other income. So all these pretty much are the main reasons for the better margin. And on top of that, we were able to pass on the tariffs, which now have been reversed. So that's the main point of it. We also diversified into other markets, which was good, considering the instability, volatility in the U.S. market, which is positive and just running the operations continuously. So yes, I hope that answers it. But the note that my colleague said was actually like on point.

And just on your OpEx front, as I was asking that currently, we have around INR 190-odd crores sort of OpEx vis-a-vis your INR 77 crores last year. So what led to this steep jump in current quarter? And what can be the sustainable run rate for that?

So the major reason for going up, the OpEx was because of the reciprocal tariff, which was like highest at 50% during Q3 FY 2026. So that is the reason major jump you can see in OpEx.

Okay. So we are accounting that into our OpEx part? Understood.

Yes.

The next question comes from the line of Sourabh Banik from DIVAS Consultants.

Am I audible?

Yes, please go ahead.

Congratulations on a mixed set of numbers. So I just want to clarify from all of you that in FY '27, what are the target markets for all the business segments that we are looking for? Is just a plan that you made? If it is made, if you can explain us?

See, for FY '27, we are working on the projections because until recently, we had so many challenges, like tariffs and also our own culture season how it's going to be and what efforts that should be made to encourage the farmers to undertake more culture, and all this planning was going on. So we are in the process of preparing budget for the '26-'27. I think we'd be able to share with you sometime. By the next call, we should be able to give you more details on that.

And 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. So how much expectations of that sales realization that you expect from this Asia and Africa as well? So if you please share this, at least.

Nikhilesh, is it with regard to...

Can you repeat that question?

Okay. So in FY '27, 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 business segments that we are operating?

So Africa, generally, it's in terms of income levels quite low. So the opportunity in Africa maybe not immediate but more long term. So I would say in the meat next 2, 3 years. Asia, in particular, has been doing quite well. If you see, our share in Asian markets has been growing over the past few years. So we're still very bullish on the Asian market. So we do expect higher sales towards this region.

As far as feed 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 we are culturing there. We are supporting them with technical advice and also we have sent some trial products also to feed to them. And we are making efforts to supply to this, let's say, Middle East countries also for the shrimp feed. We'll have to wait and see.

Okay. So sir, can you please share your percentage? How far are your trials? Is it 50%, 60% or 70% completion? Can you just share the number?

We can't view this as a percentage, right, because this is like a trial. So we cannot give like a exact percent.

Lastly, sir, one question on financial numbers. So is there any expectations of your calculation that how much numbers on top line and bottom line you will end this year, I mean, FY '26?

Not now. We are still working on that.

After 20 days, we will close the quarter, so we can give you then numbers.

The next question comes from the line of Akhilesh Rawat from Ridhanta Vision Private Limited.

Sir, my question is regarding pet food business. I just want to understand like how we are going to penetrate the market? And the market is surrounded by and dominated by some few key players. So could you please shed some light on your plan? Like in long term, how are we going to penetrate the market?

Venkata Sanjeev, can you please take this question?

So right now, we are concentrating mostly on the product itself. The product has gotten great replies from the market. And all the dog owners and the cat owners who have used it are becoming repeat customers. So product is going to be the key for it. And 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.

And sir, if you could please shed light on some revenue figures, like how are major revenues coming from dog food or cat food?

So dog food is around 60% to 65% and the rest is cat food.

And if you could shed some light on some margin guidance like what kind of margin are we looking from this business in long term?

Can I take this call? Venkata ji, would you like to answer this question?

Definitely.

See, the margins, I think it is too premature to talk about the margins at this stage because we have just started. And the initial years, we'll have to incur a lot of expenditure on the promotion of the product and building the brand image. So we'll have to do a lot of work on that and more expenditure is incurred to create the brand image and to various -- the market segments also we have to see. And also the regions. See, this product is supposed to be marketed pan-India. So 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. And to make the product visible, availability is a very important aspect in this kind of business. And simultaneously, we have our own distributors as well as e-commerce. So it will take some time for us to develop -- give the numbers and margins because the initial expenditure is high. And moreover, see, now we are doing it more of a trading. So real benefit of this comes to the company when we start our own production. Because as long as you import the product, you know the price, how the foreign exchange, let's say, rupee getting depreciated against the dollar and all. When we import and distribution and all the expenses are bound to be higher. And when we start our production maybe in next 1 year or 14, 15 months, so we should be able to start our own production, then the real benefit of the project would be seen at that time. So now the process is only to develop the brand and stabilize the market base. So 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, and we are focusing mostly on that and also recruiting the people to promote the product. Business promotion is another important thing. These are the two things, which we are doing, that expenditure. But at this stage, it's very difficult to make any margins at this point of time.

And sir, last question regarding this only. So sir, as you have said that we are going to start our own production. So how much CapEx are we going to do? Or do we have any facility as of now running in which we'll do production? That's my last question, sir.

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 work, all this work is actively working on that. And we should be able to really give a clear estimate of the total project cost. In the next couple of months, we should be able to do it. And we start working on the drawings. And in India, we need so many approvals through the government to start the construction itself. We will start working on that. So once we get the approvals, we'll start construction. And the total estimated cost of the project and profitability, et cetera, we'd be able to give you maybe in the next 1 or 2 quarters' results.

Next, we have a follow-up question from Nitin Awasthi from InCred Capital.

Two 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. We mentioned expanding it to Amazon this quarter. But however, it's still not visible on the portal.

Venkata Sanjeev, can you take this?

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 have been visible on the top, but we are working with Amazon to get our brand on top of the page.

Understood. And a follow-up on that, Amazon pet foods, if you go on that page, they have started their own brand. It is a tough call, given that any other online supplier that you use could also start their own brands. You guys have given any thought to that, whether these will be successful or not successful or as a threat do you see it as a threat because your distributor having its own brand?

Can you repeat that question again, please?

So 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. And it's also been upfront about it 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 5 months, they have been increasing more and more products have been showing on Supertails. I am also hearing good feedback from people. But do you see this as a threat that the distributor website itself is starting to own brand.

Yes, we do see it as a threat that 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. And I think that's going to affect their business more than us.

The next question from the line of Karan Sharma from Credent Capital. Can you speak a bit louder, please?

Nikhilesh, my question was to you. So in the shrimp processing division, we have seen in the last 9 months, a decent volume growth. So what I was asking was that since the 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 1%, 2% mark. So considering this is a very fragmented market, as you 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 in this segment?

Market share in the country, that's what you want?

In terms of global market -- Yes, in terms of the players in the country, yes, correct?

So historically, especially in India, it's been very fragmented, like 100-plus packers. So that way, it's just because of the size of the country, the people on the West coast, East coast, different areas, different people, as well as some people trying to move only commodity, we try to do more value added. So that said, like if you just look at a broad perspective, then 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 climbed the rank and amongst the top importers for frozen shrimp today. So that way, we have been increasing our volume, but 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 the expectations are, they're very demanding generally. In the next few years, from FY '27 onwards, our main target is to scale, continue to scale. If you see our CAGR percent on volume or revenue, every year, we continue 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, if they find any problems, they complain, right? And food safety issue itself is very sensitive. So every year, we're going to increase step by step, step by step, that we're quite confident. And that's we've shown the business at least in the last 10 years.

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 the last 9 months ended 31st December '25. And 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. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.