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

Hello, sir. 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 UK's trade deal be implemented first. The talks are probably from April. We have the implementation of the UK 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? I think Nikhilesh would take this call on this question. Could you repeat the question, please?

No, given that UK's trade deal and EU's trade deal, of course EU is expected by the end of this year or beginning of next year, and UK by April this year, is going to be at a substantially, what do you call, lower the tariff rate, because in EU we had tariffs up to 26%, in UK we had it up to 9%. So, given this scenario, do you see the market in EU expanding for shrimps itself? Because suddenly the price will drop and become more competitive against other proteins.

Yes. I would definitely say that the market access into EU and UK would be better. There'd be higher demand coming from these markets. Yes, 100%, because they are reducing duty.

Understood. And on UK, 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 they are implemented. So, there's no official news on the implementation date. We're hoping that it comes into effect quickly.

And I may add to that, I think it is around six to nine months’ time. They want to complete all the formalities according to the bilateral trade agreement. It has to be implemented from both sides. Both governments have to approve that. I think it will take about six to nine months. That's what I read in a newspaper the other day.

Understood, sir. Sir, the next question is on the El Nino impact on the weather. One of our core raw materials, fish meal, 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 fish meal? Yeah. See, the fish meal as you know, the same. The catch is from this ocean. It depends upon the nature, definitely. Each year, it keeps varying. But the last year it was not so good and particularly Chile and Peru are the major suppliers of fish meal to the almost global consumers, and this year their catches have been fairly good. And in between, there was less demand for Indian fish meal, because of the availability of fish meal from Chile and Peru. But again, the prices have gone up. Again, the demand has gone up from the particularly East, West Asia, because particularly from Taiwan and other countries, they would like to have a cheaper fish meal available from India. As far as the quality is concerned, it is the same. That is how the prices of Indian fish meal is going up. Moreover, the dollar is becoming very strong and the rupee depreciation is giving an advantage to the exporters. So, they compare the price and the local price, domestic price as with the export price. And the government also gives some incentives for that, for exports. So overall, the fish meal producers get much 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 regulatory mechanism by which the exports are limited and adequate fish meal is available for 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 really agree to that, but we are making our efforts to somehow bring a balance between these two exported fishmeal 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 as bad for shipping? Nikhilesh, would you.

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 happens. For us, since most of our markets are in the U.S., Europe, and 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 how inventory is managed by the shipping company. For 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.

Please come back and ask. Participants are requested to restrict yourself to two questions in the initial round and join back the queue for more questions. The next question comes from the line of Arjun Khanna from Kotak Mutual Funds. Please go ahead. Sir, thank you for taking my question. The first query is on the outlook for processing for FY27. So, we have given a target of INR 15,500 for the FY26 fourth quarter. How do we look at FY27 given these trade agreements?

Nikhilesh?

I'll take that question. So, frankly speaking, on a lighter note, you know, I must thank the Indian government for taking 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 UK and also negotiating a trade deal with the U.S. eventually, which now it doesn't matter. But because of all these reasons of improved bilateral trade, we do expect better market access; however, they are quite robust for the year FY27. But our guidance, I need to relook at it, because they're finalizing some of those numbers with a change in tariff structures.

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

Yes. 28,000 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 the processing side. So, what's the sentiment at the farmer's 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 -- you know, it's just a tax that goes into the government coffers. So, we can pass it on to the consumer instead of paying taxes. So definitely, everyone is happy about it.

No. So, just to understand this a little further, in terms of the [inaudible 0:35:02] for us on the processing side, do you see operating leverage kick in for us as volumes move up? Or potentially, given that you're 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, so 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 six to nine 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 FY27, that there should be theoretically better margins. But the question that you're asking is quite new, right? It’s very -- tariffs were removed a month ago. So, we need to see how this pans out. But theoretically, it should give a better margin recovery.

So, for example, in the U.S., where we brought out that post end of February tariffs have been revised downward 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 anti-dumping, CVD, etc.?

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 level, because it's winter. But on a general level of enquiry, there's a higher inquiry, there is more positivity, more interactions with the customers on their plans 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 we're quite confident that demand would come back once the season opens.

So, I'll get back to the questions, but wishing you all the best.

Thank you.

Thank you. The next question comes from the line of Ronak Shah from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. So, my first question is on the feed business. So, first of all, when the management is guiding for around 5.5 odd lakhs metric tons sort of feeds, say in FY26, 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 is the company seeing the business in FY27 and FY28? 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 prevailing during the main culture seasons, that is 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 climatic 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 are making efforts to increase the area of culture this year. Also, those who have left the culture at the time of COVID also are 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 stockings. And as we see the 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 season is peculiar and unique by itself. So, we know what would be the first- year season's real demand for the feed, and also thereafter, the second season will start. So, it's very difficult to estimate exactly, but we, with all the present circumstances, expect that there should be a minimum 10% growth in the feed volume consumption, if not more, because this area’s culture is 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, understood. Secondly, sir, when we see the gross margin for the feed division, so when we were into the Q2 FY26 conference call, wherein you were highlighting an increase in the fish meal and soya meal prices. But when we see the third quarter's numbers, we can see a QoQ improvement in your gross margin. So, have we taken some price hike into the feed division? And going forward, how are you seeing those numbers panning out?

So, what has happened here is that the averaging of the raw material cost has really given that additional advantage in the Q3. So, what is happening is that when the prices keep going up, we follow the weighted average consumption. So, 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 investors call. So, but again, I'm saying the same thing now, because Q4 is going to be the same story again. 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 nine 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 15%, 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 two to three months more, we are having those low-cost inventory, which is likely to consume and then after we will see the actual position. Yes, yes, yes, you are right.

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

Nikhilesh, would you like to take this?

Yes. I think my colleague had clearly explained the point that there was better volume, there was better realization, price realization, and better other income. So, all these are the main reasons for the better margin. And on top of that, we were able to pass on the tariffs, which have now been reversed, so that's the main point of it. We also diversified into other markets, which was good, considering the instability or volatility in the U.S. market, which was positive, and just running the operations continuously. So yeah, I hope that answers. 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 191 crores sort of opex vis-a-vis your INR 77 crores last year. So, what led to this steep jump in the current quarter? And what can be the sustainable run rate for that?

So, the major reason for going up of the opex was because of the reciprocal tariff, which was 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, yes.

Okay. That's it from my side. Thank you.

Thank you.

Thank you. The next question comes from the line of Sourab Banik from DIVAS Consultants. Please go ahead. Good evening, sir. Am I audible?

Yes, yes. Please go ahead.

Congratulations on a mixed set of numbers. Sir, I just want to clarify from all of you that in FY27, what are the target markets for all the business segments that we're looking for? Is it just a plan that you made? If it is made, can you explain us?

See, for FY27, we are working on the projections, because till recently we had so many challenges like tariffs and also our own culture season, how it's going to be and what efforts should we make to encourage the farmers to undertake more culture, and all this planning was going on. So, we are in the process of preparing the budgets for ’26, ‘27. I think we'll be able to share with you sometime. In the next call, we should be able to give you more details on that.

Okay. Thank you so much for the clarification. And sir, one more question regarding this. In Africa, 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 we expect from, you know, this Asia and Africa as well? So, if you please share this at least?

Nikhilesh, is it got to?

Can you repeat that question?

Yes, sir. What do you say, sir?

Can you repeat? Can you repeat?

Okay. So, in FY27, as I said, your plans and projections are on. I just want to know that in Africa and in Asia, there are any opportunities to grow your markets, for all the business segments that we are operating?

So, Africa, generally, in terms of income level, is quite low. So, the opportunity in Africa may not be immediate, but more long-term. So, I wouldn't say in the immediate next two to three 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 in this region. As far as speed is concerned, we are making efforts to go to the Middle East, and we are trying to enter that market. We have some trials are going on and the culture there, we are supporting them with technical advice and also we have sent some trial products, the feeds, to them. And we are making efforts to supply to these, I mean, Middle East countries also for this shrimp feed. We’ll have to wait and see.

Okay. So sir, can you please share your, I mean, percentage? How far you are? I mean, your trials and is it 50%, 60%, or 70% completion, If you can just share the number?

Please, can you come back on it.

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

Okay, sir. Got your answers. Lastly, sir, one question on financial numbers. So, is there any expectations of your calculations for how many numbers on the top line and bottom line you will end this year? I mean, FY26?

No. Not now. We are still working on that.

After 30 days, we will close the quarter. So, I can give you those details then.

Okay, sir. Congratulations, sir. Thank you. The next question comes from the line of Akhilesh Rawat from Ridhanta Vision Private Limited. Please go ahead. Hi. So, my question is regarding the 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 the long term, how are we going to penetrate the market?

Mr. Venkata Sanjeev, can you please take this question? Hi. So, right now we are concentrating mostly on the product itself. The product has gotten great response from the market, and all the dog owners and the cat owners who have used it are becoming our lead customers. So, the product is going to be the key to 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.

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

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

And if you could like shed some light on some margin. Margin guidance, like what kind of margin are we looking from this business in long term? Can I take this call.? I mean, Venkata Sanjeev, would you like to answer this question?

Better if you answer.

Yeah. 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. So, we'll have to do 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, 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 this, give the numbers and margins, so because the initial expenditure is high. And 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. Because as long as you import the product, you know the price, how the foreign exchange, let's say, the rupee is getting depreciated against the dollar and all when we import and distribute and all the expenses are bound to be higher. And when we start our production, maybe in the next one year or 14 or 15 months, so we should be able to start our own production. Then, well, the real benefit of the project would be seen at that time. So, the process is only to develop the brand and stabilize the market base. So, people should know that Avanti's product is available and what the flavours are, that whether it is a dog food or a cat food and we are focusing mostly on that. And also recruiting people to promote the product. Business promotion is another important thing. These are the two things that we are doing that incur expenditure. But at this stage, it is very difficult to make any margins at this point in 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? So, 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 actively being worked on. And we should be able to really give a clear estimate of the total project cost, maybe in the next couple of months, we should be able to do it. And we start working on the drawings, and you know in India, we need so many approvals of the government to start the construction itself. So, 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, etc., would be able to give you maybe in 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 * and 1 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 the follow-up questions. 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. Venkat, can you take this?

Yes. We’ve been working with Amazon. Since there's another brand called 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 to the top of the page.

Understood. Understood. And 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 whether these will be successful or not, or as a threat? Do you see it as a threat? Because they are your distributor, having its own brand.

Could you repeat that question again, please?

So, Amazon, on the 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 being upfront about it in the labelling, marketing and the packaging saying it's an Amazon brand. Given that a 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. But do you see this as a threat, that the distributor website itself can start 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 able to give, and I think that's going to affect their business more than us.

Understood, sir. Thank you. Thank you. We have the next question from the line of Karan Sharma from Kredent Capital. Please go ahead. Hello. Am I audible? B. Santhi Latha No. You are not

Can you speak a bit louder, please?

Yeah. Am I audible now?

Better.

Hello. Is this better? Yeah. Nikhilesh, my question is to you. So, in the shrimp processing division, we have seen in last nine months decent volume growth. So, what I was asking was that since this chaos of the last year where duties were changed, do you see any possibility of gaining reasonable market share, considering your market share volume-wise in the last four to five years has been quite stagnant in this division, around the 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 around this segment?

Market share in the country?

In terms of the global market. Yeah, in terms of the players in the country, yeah correct.

So historically, right, especially in India, it's been very fragmented. They are 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 specialize, some people try to move only commodities. We try to do more value added. So that said, like if you just look at it in a broad perspective, then about when we formed the JV with Thai Union for the processing division, we were, I think, we were not even a top 10 importer. Now, we are high in the rank and are amongst the top importers for frozen shrimp today. So that way, we have been increasing our volume, we are also looking to play where there's better margin, by doing more value-added products and trying to work with more premium clients and where the expectations are they are very demanding generally, so that's that. But in the next few years, from FY27 onwards, our main target is to scale, continue to scale. If you see our CAGR percent on volume or revenue, every year they 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, they find any problems, they complain. And the food safety issue itself is very sensitive. So, every year, we're going to increase step-by-step, step-by-step, and we're quite confident. And that's how we've shown the business that we've seen in the last ten years.

Okay, Nikhilesh. 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 to all the investors for actively participating and sharing your views on the performance of the company for the quarter, as well as the nine months ended 31st December ‘25. And I conclude this conference call with a note that in 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 Door Sabha’s conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.

1. This document has been edited to improve readability 2. Blanks in this transcript represent inaudible or incomprehensible words.