Apex Frozen Foods Limited (NSE: APEX) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Choudary Karuturi — Managing Director and Chief Financial Officer
Analysts:
Suyash Samant — Analyst
Tushar Raghatate — Analyst
Nitin Awasthi — Analyst
Siddharth Sreekumar — Analyst
Shaurya Punyani — Analyst
Tom Kadavil — Analyst
Yogansh Jeswani — Analyst
Sachin Pal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Apex Frozen Foods Limited Q3 and Nine Months FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Saman from Stellar IR Advisors. Thank you, and over to you, sir.
Suyash Samant — Analyst
Thank you. Good morning, everyone, and thank you for joining us today. We have with us today the senior management team of Apex Frozen Foods Limited, Mr Chaudhry, Managing Director and Chief Financial Officer; and Durga Brasad, Senior Manager Accounts, who will represent Apex Frozen Foods Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and nine months ended 31st December 2024, followed by a question-and-answer session.
Please note, this call may contain some of the forward-looking statements, which are completely based upon the company’s beliefs, opinions and expectations as of today. These statements are not a guarantee of the company’s future performance and involves unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statement to reflect developments that occur after a statement is made.
I now hand over the conference to Mr Chaudhry Karoutari. Thank you, and over to you, sir.
Choudary Karuturi — Managing Director and Chief Financial Officer
Thank you, Suyash. Good morning, everyone and thank you very much for joining us on this investor call for the Q3 and Nine-Month FY ’25. We have uploaded the investor presentation on the website of the stock exchanges and we do hope that you had a chance to go through it. At the outset, we are happy to share that the global shrimp prices have continued to increase, definitely backed by an improving demand.
In regards to the demand from the US specifically, which is one of the largest global markets for shrimp has — it has continued to show improvement as inventory levels have been gradually declining. This trend suggests a recovery in consumption and purchasing activity, which could also lead to increased import volumes in the coming months. As stock levels normalize, buyers may become more active in-sourcing fresh supplies, providing a positive outlook for shrimp exporters overall. The European Union market remained robust.
The company recorded a 73% year-over-year sales growth during Q3 FY ’25 and 42% year-over-year growth on year-on-year growth on nine months FY ’25. The share of the EU market in overall sales mix increased to 45% in the Q3 FY ’25 from 36% in Q3 FY ’24 and to 45% in nine months FY ’25 versus 30% in nine months FY ’24, resulting in a more geographically diversed sales mix. We remain optimistic about the market’s growth potential and the opportunities it offers, especially once our long pending ready-to-eat approvals are also secured for our new facility, which we have been awaiting literally for the past almost five years due to some regulatory issues between both the country — India and the EU.
In light of the improving demand, the resultant global shrimp prices have also been rising. Our average realization registered a growth of 13% year-on-year and 8% quarter-on-quarter in Q3 FY ’25 to INR749 per kilo. However, due to constraints — continued constraints in the raw-material supply in India, which many of you would be aware, because of the long consistent low pricing at the Farm gate level in the later part of FY ’24 and the early part of FY ’25. Definitely the — as we explained in our earlier calls also, the mood of the primary producers was definitely low and they were having a very conservative approach.
With regard to stocking shrimp, postlar PLs or seed at the farm level and going for stocking and thereby reducing the overall farm level production. The farm gate prices you know, were quite low for most of the early part — early part of last year in 2024 and it is only in the second-half almost from around September, the prices also started increasing very well. So currently, because of the conservative approach of these primary — the farmers and the primary producers. Of course, that definitely had an impact on the overall raw-material supply. And because of these constraints, the farm gate prices grew even further.
Our average purchase cost of raw materials grew 21% year-on-year and 15% quarter-on-quarter to INR372 per kilo in Q3 FY ’25. Since aquaculture shrimp in India, as you all know, most of you would know is primarily export-driven and follows global price trends, the rising shrimp prices are definitely expected to encourage shrimp farmers to increase seedstocking, which was as explained earlier, which was lacking in most of 2024. And we are expecting it to be increasing in the upcoming cropping season, which is already in the process right now. As we have mentioned, the current fiscal saw a lower supply of caution. And in this context, increased shrimp production would definitely be a positive development for the sector in the medium-term, especially with early signs of rising demand.
Coming to the financials, the net revenue for Q3 FY ’25 came in at INR231 crores, up 16% quarter-on-quarter as against INR200 crores in Q2 FY ’25 and 56% year-on-year as against INR148 crores in Q3 of FY ’24. And in fact, it is the first time ever that our Q3 revenue is higher than the Q2 revenue. Ours is slightly a seasonal business, which most of you would be aware. Typically, Q2 is the strongest of all the quarters in any fiscal year, mainly because of the robust supply, which is usually available here during that period of every year because of three favorable conditions for the farmers to grow at that point of time.
For nine months FY ’25, the net revenue came in at INR616 crores as against INR643 crores in nine months of FY ’24. While global sea transportation issues are easing with freight costs gradually decreasing, the domestic raw-material prices remained firm, thereby impacting the profitability in Q3 FY ’25. Our gross margins stood lower at 25% in Q3 FY ’25 and mainly due to the higher raw-material prices, which we have just explained. The gross margin in nine months FY ’25 were at 28%. The shrimp volume sold by our company stood at 2,903 metric tons in Q3 FY ’25 and up by 37% year-on-year and 7% quarter-on-quarter as against 2,117 metric tons in Q3 FY ’24 and 2,710 metric tons in Q2 of FY ’25. Shrimp volumes sold by our company stood at 8,184 metric tons in nine months of FY ’25 as against 8,646 metric tons in nine months of FY ’24.
In conclusion, we do remain optimistic in the near-term driven by the signs of inventory liquidation in overseas markets and uptick in the overall demand and the reduction in major ocean freight costs mainly. Additionally, with the current favorable pricing scenario for Indian shrimp farmers, we are hopeful about increased shrimp cultivation in India in the near-to-medium term.
With that, we can now open the floor for the question-and-answer session. Thank you.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tushar Ragatate from Kamakya Wealth Management. Please go-ahead.
Tushar Raghatate
Yeah, good morning, sir. Thank you for the opportunity. Sir, just wanted to know like the reduction in the basic custom duty for fish paste and a fish hydro, like I said, what would be the benefit of that to our company?
Choudary Karuturi
Firstly, we are using the raw-material sources from domestically and we — our company is not into importing of these products in our processing. But that is more for reprocessing and either selling domestically or re-exporting. So it is for such companies. In our company’s case, it is more of — we are mainly focused on the shrimp as you would be aware.
Tushar Raghatate
Got it, sir. Sir, just wanted to know like you said the realization has been increasing, but there is a disconnect in the margin. I understand it’s because of the raw-material. So can we consider this margin as a new normal or you are seeing that margin to revert back-in terms of gross margin, I’m talking. So you went near about 35% gross margin, now it came back to 25%. So you see that reversal happening in the near-future?
Choudary Karuturi
Well, as I mentioned in our opening remarks, we are — yes, we are quite positive. See, the main point on the — in regard to the gross margin is that there was a drastic impact on the supply issues because of the overall conservative approach of these farmers, which was explained. So because of that, definitely the supply of the shrimp had impacted almost — most of — most part of the year we have noticed it. And now the conservative approach of the farmers is also slowly easing. It’s slowly easing. It’s not like there’s an overnight change, but it is slowly easing as for the past three months, literally, they have been seeing a very consistent higher prices — better prices for them for them to realize on their production at the farm gate level compared to what they have seen for almost over 12 months prior.
So this definitely is an encouragement and as the farmers also can see better margins on their end and they can justify their costs. So that way, it is definitely an encouragement, definitely much better than what it was like six months or nine months ago. So that way, we expect the supply also to improve ice, which definitely once the supply improves, obviously, we would have a better leverage for sure, so which is currently — the supply is a key challenge right now, which we are foreseen. And I mean, we expect that as explained, we expect that to be changing. And obviously, as the supply improves, we expect a better kind of stabilization of the raw-material prices also, which will definitely improve our margins in the overall — and the gross margin level.
Tushar Raghatate
Got it, sir. So actually the ground for this question is coming from the listed player of yours in the field business. So they mentioned that the increase in the shrimp prices is kind of adjusting towards the duties and the import duties on the shrimp so any, any say on that it.
Choudary Karuturi
There is definitely some impo some amount of impact but at the same time definitely with regard to the counter duty, there is certain amount of impact. But at the same time, we also have to understand that the increase of in the sales price, whatever increase was there was not on par with the increase what we had at the farm gate prices. Definitely. That was one major part, which means because of the shortage of supply, the farm gate prices obviously were at a higher-level. I mean there was a difference of course, almost around 3% to 4% was a difference between — we have seen as far as increased rate is concerned.
And for — it depends on different companies as you also are noticing, our company also is diversifying and we are not having the same amount of exposure what we have been having for years together with the US market alone. So which you can also see that we are also — it’s not that we can ignore the US market, it will continue to be our main market, but at the same time with the current issues related to the CVDs, the higher-rate of CVDs or any — any tariff-related issues with regard to the US, we will have a better balancing environment for our business than it is obvious that we have to diversify even more than what we would have normally done. And that is the reason you can see our sales to the EU also growing very well. So that is a big step which we have been taking from the beginning of the fiscal as you can see, every quarter, we have been growing our overall quantities to the EU market, which we have never done this much about the volumes in the past to the EU, especially, which is our next big market, which most of you would know.
So yeah, that way, it depends each company and how they work, but we are focused on diversification so that we don’t really have the impact of CVD on a majority or most of our sales. That’s how we are — our company is trying to mitigate this issue.
Tushar Raghatate
Okay. Got it, sir, that was helpful. I’ll get back-in the queue. Thank you.
Choudary Karuturi
Okay. Thank you.
Operator
Thank you. The next question is from the line of Nitin from InCred Research. Please go-ahead.
Nitin Awasthi
Hello, sir. First question from my side, just wanted to understand, like you said in your opening remarks, there is a lot of optimism when it comes to the farmer side of things. So how are you seeing the hatchery demand given that we have our own hatcheries? How are the conversations happening there? How is the pickup expected in that segment because that could indicate how the stocking happens?
Choudary Karuturi
Definitely very well asked, Mr. On that point, we have seen an improvement in our hatchery operations. But we wouldn’t comment on the general environment because at the same time, while we would specifically say about because of certain changes which we made within our operations and also, as you know, we have a long built pharma network over the years, most of the farmers who were quite conservative, got conservative in the past few months are definitely increasing their inquiries on the requirement of post-lave — sorry, on the shrimp seed which they are actually increasing their inquiries.
But at the same time, there are quite a number of which are canceling their appointments related to quarantine, which means they are canceling the requirement of their group stock, maybe depending on their business needs because farmers are very conscious. The primary producers are very conscious on the quality of the seed, especially with the problems which they have been facing in the past years. They are very conscious and they are taking careful — a very careful and studied decision of from where to procure their seed.
And in that regard, we have seen a growth and currently, we are actually increasing also in the process of increasing our import of stock to produce more number of post Larvey or seed for the requirement of the farmers. That way from our — to put it straight, our, definitely we are having a very good improvement in the inquiries with regard to the seed. So that and for a few other purposes, we have also been requesting and kind of insisting that all the proteins from our seed all-in its entirety find the — should be coming back to us as a raw-material, which was not — we weren’t really not pursuing in that direction in the past.
But now because of some technical changes in which some of our customers need in regard to the European Union market about animal welfare and in that regard so we definitely need we would want to buy the entire entire product raw-material which is produced out-of-the Laway produced out of — sorry, supplied by us. So that way, we are having a better — we are seeing better inquiries from our — from our company’s operations as such. It started almost — the entire Q3 was like that and it’s slowly growing now.
Nitin Awasthi
Understood. Heartening to hear that you are heading in that direction to make it more traceable. And I think that’s where the whole industry is also headed. Sir, second question regarding the CVD part. I’ll break the question down into three specific parts because it’s a very broad discussion that happens. I just want three very, very specific parts. One, the first part. When is the revision due, right? Because what we happen to understand it’s an annual thing, but however, we cannot estimate when the revision is due. So that is the first part.
The second part, we paid on certain assumptions till the final rates came out. So have we adjusted and paid the additional amount or more?
Last question, the third-part is what the current rate from of course from the quarter going-forward will always be adjusted when I’m still for the sales to US? Is that other understanding correct?
Choudary Karuturi
Okay. The current rate is at 5.77%, firstly. It was 4.36%, which was preliminary. And the period which we paid 4.36% was the first four months from of the fiscal year coincidentally from April 1st to I think — sorry, from April 1st to July 31st, yes, we paid the 4.36%. And then there was a hold from August 1st to almost December 17. And from December 17 to December 27 76, we paid — we paid-for that 10 days or we paid 4.36%. But from December 27 onwards, we continue — we started paying 5.77%, which we will continue to pay till the early part of 2026.
And to answer your first question, the review will be around — initiated around the — towards the end of December ’25 — sorry, December ’25. And that review the decision of that review, which will likely be mostly will conclude within three months from the initiation, which means by around — roughly by around March-April, we’ll have a clarity in 2026 of what the retrospective duty would be, which means for all this period what we are paying at 5.36% and that little part which few months which we paid at — sorry, 5.77% which we have paid currently and 4.36% which we paid-for a brief period, it’s all subject to review.
And like you asked, once that is — that review is concluded sometime around March to April 26, we — and we expect at this time that it should be reducing with much which was long the awaited justifications and the information to be submitted by the government of India also with regard to you know, the justifications mainly about the two major programs what we, as you know, which we benefit from is and duty drawback.
They are nothing but basically a reimbursement of the various indirect taxes which are in imposed on the entire supply-chain from the hatchery side in the processing. So that information is already being sought-after by the Government of India and we are also kind of compiling that. So as they provide this information, which will be very, very helpful, unfortunately, that couldn’t be done in the earlier investigation period. But once that is done, we definitely expect a reduction.
And today, we wouldn’t really want to comment on that at what percentage it would reduce. But whatever reduced duty will be there at the — during the March-April 2026 when they announce it, that will be effective prospectively as well as the refunds, I mean as we expect a reduction, the refunds for all this period, whatever we have paid that will also be affected at that point of time. So I guess that answers the dates as well as the process in the most part.
Nitin Awasthi
And just one clarification, so here, I wanted to just clarify this is no confusion. So the CBD is basically an annual calendar year process. It starts in January 1st, ends on 31st December. However, those hearings happen mid of the year, hence the final decision comes in mid of the year, hence the adjustment which has to be made. Is that correct?
Choudary Karuturi
But that the most important point here is we are not going to make any adjustments. If you are asking me if we are going to make any adjustments in the financials, no. If that’s what you are asking. So it is very clear, we paid-for certain amount of shipments we paid at 4.36% in the current fiscal. And the remaining shipments which are arriving, when I say we are paying duties there, we please understand the duties are upon arrival.
So whatever shipments which got arrived from December 27, we are paying 5.77%, which means most of the shipments which went in-part of them in October and all the shipments of November and all the shipments from December are affected by this order, right? So we have been paying on all that. And that is — there is no more adjustments. So whatever we pay, that is obviously it has got into the books and we are not going to make any adjustments.
If the US Department of Commerce decides when they decide in the future, supposedly in as stated sometime in March-April 2026, but based on their decision, at that time, they may initiate a refund. So we would know at that point of time. And then whatever — if any refund happens at that time, we would be basically taking it as an income because it’s a — we get it at that.
As you understand, there are no adjustments in any financial year as such with regard to these changes because in our case, we do not consider this as a adjustable or kind of a changed duty or change rate until that order is given. Whatever — the effective date of the order will be taken for our books, that’s all. You got it. So we don’t make any adjustments if there is any change in the future because the change of that will be applied from that date of arrivals, which means our shipments which are on the way will be effect to that asset. You got it?
Nitin Awasthi
Yes, sir. Understood. Thank you, sir.
Choudary Karuturi
Thank you.
Operator
Thank you. The next question is from the line of Siddharth Srikumar from iThought. Please go-ahead.
Siddharth Sreekumar
Yeah. Thanks for the opportunity. My first question is, what in the — in this quarter, what would be the sales volume of ready-to-eat?
Choudary Karuturi
The sales volume of ready-to-eat was in this quarter was only of 244 metric tons in this quarter. Of course, the overall sales in this Q3 was 8% only if to answer your question.
Siddharth Sreekumar
Okay. So the RTE plant is now operating at 8 percentage utilization.
Choudary Karuturi
No, I do not take the sales number as the operational capacity, please. The sales is what goes as a shipment, there’s always a gap between the sales and the shipment — I mean, sorry, the production and the sales, always that is always there. So at this — for the quarter, whatever shipments have happened with regard to RTE, that is 8% of our total sales. So 42% is our total volumes.
Siddharth Sreekumar
Sorry, 8% of total volumes.
Choudary Karuturi
Yeah, yeah, yeah, yeah. Yeah.
Siddharth Sreekumar
Okay. So my next question is, regarding the —
Choudary Karuturi
Sorry to just reclarify to just to clarify to you, if you ask, it is — it was 11% of our production of Q3 FY ’25. Yeah.
Siddharth Sreekumar
Okay. Okay. So the next question I have is regarding the production scenario in Ecuador. What is your comment about that?
Choudary Karuturi
We — I don’t really have much of information at this point about the production — I mean, the production is there. We are continuing to export, but their overall exports, we believe are affected because of an energy crisis which they are facing, which we hear from the news as such and they are having issues with regard to processing also at the farm level, the feed plants. Overall, everything is we understand in general is affected, but we do not know-how long those effects will be there and how long they will last.
But currently, we see a kind of a tapered reduced volumes of theirs into the US market, especially. And it is also definitely maybe they are also maybe looking at change of strategy and maybe kind of reducing their production at this. I don’t know-how that’s going to fair as far as 2025 is concerned with regard to Ecuador at this point as I guess it’s too early to say. But so-far what we know is there another — they have issues related to energy — electricity basically.
So it depends on those troubles accordingly, if those troubles intensify, obviously, their production would be getting affected because electricity or energy is a major component for farm level production, the processing plants, the feed plants, everything to run, it’s a major comp, you know which — without which it will be very difficult to provide the required variation at the farms, which is the key part for the shrimp to survive in a pond, right?
Siddharth Sreekumar
Yeah, yeah. So one more question I have is in USA, how are shrimp processors like Apex, Indian shrimp processors faring compared compared to the Ecuadorian ones? Are we losing market-share? And what is the realization trend for Indian shrimp in America and Ecuadorian shrimp.
Choudary Karuturi
The realization as such definitely is at a better level with regard to — for India as far in the US market as far as it is concerned, because please understand the — as far as Indian is concerned, it has almost — we have been having more than two decades of presence in the US market. So it’s just not about doing volumes, but also the different types of products, the various number of SKUs which we — which India produces for the — both the retail super — which means supermarkets as well as the foodservice sector, which is the restaurant chains is various products which are there and similar to other Asian, India does a great volume of — a diverse mix of products and product portfolio is much, much, much wider, much more vast than what Ecuador does.
Of course, Ecuador has been trying to get into those products, but we do not see that impacting our sales to the US market as India definitely has met and set a standard for its products in the US market and which — or to be more precise, India has earned the trust among the US customers with regard to reliability and consistency on its products. I’m not saying specific to FX. It’s in general, like you asked as a country. Definitely we have achieved and we maintain our reputation for sure in the major part we definitely have achieved. So that way that India definitely has an edge.
With regard to consistent deliveries and also consistency and quality. Of course, there are certain — like one of the major disadvantages when you asked between the countries which you are trying to compare is the logistical — I mean the time of if the shipments from that country would go like in 10 days, but our shipments could take 30 to 40 days. So apart from this you know, apart from the distance which we are, which we are on the other side apart from that we have definitely set ourselves in a very good you know, in a very good we have earned a very good reputation and we continue to maintain that. The customers as well as the consumers definitely trust. We are good in that way as a country. I think that answers, but I think you mentioned about companies. Sorry, you also asked about companies.
Siddharth Sreekumar
Not companies, about the realization.
Choudary Karuturi
Yeah, realization wise, as mentioned, India has been very well as you know, as a reliable supplier of supplying nation for the various products which the US market needs because it’s not like India is trying to enter the US market as far as shrimp is concerned in the past two to three years, trying to change the overall product portfolio, which we have been doing for more than two decades. I mean, there are certain countries like you mentioned, which have been trying to do that, but India definitely has a long-established reputation which it contains and which is recognized very well. So that way our realizations are much better than Ecuador.
And as stated, it is only the logistical part, which maybe sometimes makes certain customers look at some other countries and also a small part of the customers who are from the Latin-America or South American countries who have their operations in the US for example, in any of the Latin-American or South American owned stores or restaurants may be preferring products from their current — from those countries. You got the point. So that is where big difference is as far as requirement of Indian products as well as on a realization front, our — we gain a better — we have a better edge as far as realization is concerned.
Siddharth Sreekumar
Okay, got it. Thanks.
Operator
Thank you. The next question is from the line of Shariya Puniani from Partners. Please go-ahead.
Shaurya Punyani
Hi. Am I audible?
Choudary Karuturi
Yes, please.
Shaurya Punyani
Sir, just one small question. So as that you’re seeing the demand is recovering, so at what target we are expecting to close this year? Because on revenue front, we are more or less flat Nine-Month revenue year-on-year?
Choudary Karuturi
Yeah, as definitely, but as also stated in the opening remarks, we expect improvements in the supply. We did have a good slowly picking-up supply. The supply will become a challenge — the key part for us to really look at the numbers what you are asking or give a opinion or statement about that because the Q4 supply is yet to pick-up. It is not very significant. But we are positive and we try to — we will try to definitely, you know, do better in Q4 compared to the earlier Q4s, quarter fours.
As you would have noticed Q3 of this fiscal is much better and as stated in the opening remarks. So we do expect that we — if subject to supply conditions because as you also would have understood that the farmers are looking at stocking now or in the past one to two months. So we are expecting those harvests to be starting more after — more towards end of this month and next month and onwards, it will continue to happen as they stock more.
So as you know, most of the farmers stock — sorry, harvest after almost around 80 to 90 days usually. They start around 60, 70 days, but most of the harvest happen after 80 to 90 days. So the stocking which started improvising from around November and December mostly in January, now is the time when they are picking-up more. So based on the supply, we may be remaining more on a flattish basis like you indicated, but we will — if the supply improves because our order book is very intact and it’s good, we’re just waiting for the supply. And we do have currently we are still running at 35% — around 35% capacity utilization currently, but we expect that to be improving based on the supply conditions.
If the supply improves, definitely our Q4 should be better than the earlier Q4s. Please understand, as stated in the opening remarks, Q3 and Q4 or usually the second-half of the year is usually the lower performance period. This year it was different. Our first-half was kind of lower and we — because of mainly on the supply front as well as the demand front, whatever. So based on the supply, we expect things — as the supply improves and as the harvest happens, mainly, we are looking-forward for that. Definitely, we expect it to be better.
So overall, of course, it will remain flattish, mainly because the dominant period in our industry for us is the first-half, which was, as you would have noticed, was kind of lower. So for our company, it would remain mostly flattish compared to last year. And as the supply improves, we are looking-forward for better Q1 and thereafter because of the supply conditions increasing. Improving.
Shaurya Punyani
That helps. Thank you.
Operator
Thank you. The next question is from the line of Siddharth Sri Kumar from. Please go-ahead. Siddharth, please go-ahead and kindly unmute your line in case if you have muted it.
Siddharth Sreekumar
Okay. Thanks. So my question is, how are the shrimp feed prices? How have they behaved in this quarter? And because the reason why I’m asking this question is the farm gate shrimp prices higher because of higher shrimp feed price or higher demand what is the reason?
Choudary Karuturi
Obviously, first thing we — sorry, first thing is we wouldn’t be able to comment much on the — I mean, feed, they have been stable, very stable, I guess, as far as feed prices are concerned. And as you would know, we don’t deal much into the field. That question about its moments is honor to some other companies. But to get to your point about whether the prices have increased only because of their costs, no, it’s more because of demand. The costs have — you should understand the costs have been higher even in last year, even later part of last year and even early part of — I mean 2023 and also early part of 2024.
One of the reason why the farmers or the primary producers went conservative and where they were less interested in-going for stocking or reducing their area was because their costs were higher, but the — their realization prices were lower. That is the whole, you know reason why the overall approach or the mood of the farmer was very low for most — on the half of say the first-half of — sorry, the second-half of ’23 and the first-half of ’24. So only around September onwards — August, September onwards, it started improving, mainly because of demand. So demand, one is demand overseas, which the reasons we have stated and it’s good, it’s stable. The other part is the supply here also reducing, both together added there is also a natural demand because of overseas markets.
And as stated in our opening remarks, the agoculture activity is dependent on exports. It is the export markets which determine how the agoculture industry runs. So obviously, the growth so-far in all these years has been because of the various demand from different various countries. So definitely, the farm gate prices increasing is only because of demand and less about their costs. Feed prices have been very stable. That is the only information we can convey from our side. Thank you.
Siddharth Sreekumar
Okay, thanks.
Operator
Thank you. The next question is from the line of Tushar from Kamakia Wealth Management. Please go-ahead.
Tushar Raghatate
Yeah, thank you for the follow-up, sir. Sir, I could see like in FY ’24, your utilization were 32%. Do you see that this year you’ll be crossing that?
Choudary Karuturi
Okay. Sorry, can you repeat your question? I’m sorry.
Tushar Raghatate
So your capacity is 34,000 ton to 40 tons per annum, your utilization was 32% on that in FY ’24. Do you see that in this FY you’ll be crossing that utilization level?
Choudary Karuturi
I think we answer — I kind of answered this question to the earlier participant where we really are betting high on the supply. So if the supply improves, obviously our capacity utilization also — our capacity utilization is more determined by the supply and just not by order books or the number of orders in the order book. And as stated, we have a good order book. We have very well sales done. I mean, we have commitments from the customers, we have enough of commitments which we have made and the customers have made to us. But it will be the supply, which will litermine the capacity utilization. And the most of the reduction in the capacity utilization, what you see in this nine months of this current fiscal, that reduction is mainly attributed to the lower supply, obviously, which we had access to. I think that most of it lesser supply in the first-half of the financial year, fiscal year. So that definitely had impacted us.
And if the Q4 supply improves because then especially in the next coming two months or sorry, February and March, we should be reaching that similar mirror to that volumes what we did in the earlier — sorry, last year to answer your question. So it’s mainly dependent on the supply. So we are just currently betting on better supply and we need — we are waiting for the results because we know we have seen farmers who have already started stocking towards the end of November and December and now they are actually getting ready to harvest. Actually, some of them have started their harvests as we speak currently.
Tushar Raghatate
Okay. Got it, sir. Sir, like your peer in the listed space, they also have a capacity of 29,000 tons per annum. So like in H1 FY ’24, your volumes were good like 6,531, whereas there were 5,600. But now in H1 FY ’25, like you know the volumes they are doing good in terms of the volume — you know the volumes they kind of it’s near to 6,200, whereas in your case it was 5,21, if I’m not mistaken. So why is that disconnect? Why is there, you know, do you see that Q4 will be the good addition to your utilization level or the FY ’25 would be in the — more or less the same range, if not the growth compared to FY ’24?
Choudary Karuturi
Well, as stated earlier, the first-half itself was lower in the — like you rightly mentioned for us in the case of the first-half itself was lower, mainly, of course because of certain demands from certain customers were quite low in the beginning. But as they started picking-up towards the end-of-the first-half, we have seen and as we started clocking in orders towards the end-of-the first-half.
And as you can see, the Q3 volumes definitely was a resultant of that as the demand picked-up. For the first-half, we did have certain issues with some of our customers where, I mean their demand — see, we are doing a B2B business obviously on the demand from the customers when we deal with multiple customers and some of our customers have a significant drop-in their sales, thereby their requirements, that definitely has impacted us. But we also have been looking at diversifying very vastly, not just in-markets, but even within the specific markets, which is one of the main reason that we have been able to improvise our volumes in this Q3 and of course, supported by that additional product supply also which was there.
So we have been improving. We’ll continue — we’ll continue to do that. So we did have certain issues with some customers losing their demand and thereby we also getting affected. That is when we took up the decisions to diversify in a much broader way. So which helped — which is continuing — it will continue to help us going even not only just in Q3, but also in the future. So better sales.
Tushar Raghatate
Sir, in the B2B, what would be the percentage in terms of revenue?
Choudary Karuturi
Sorry, our entire revenue is B2B. It’s B2B sure. Yeah, yeah.
Tushar Raghatate
Got it. Got it. Thank you, sir. That was helpful.
Choudary Karuturi
Thank you.
Operator
Thank you. The next question is from the line of Tom from GOJ Financial Services Limited. Please go-ahead.
Tom Kadavil
Hi, sir. Sir, can I get the freight cost percentage as a percentage of other expenses in Q3 FY ’25 and Q3 FY ’24.
Choudary Karuturi
Yeah, just much okay, can you tell the period? You said Q4 — sorry, Q3.
Tom Kadavil
Q3 FY ’25 and Y-o-Y, that is Q3 FY ’24.
Choudary Karuturi
Q3 FY ’24? Yes, the freight component was for the Q3 FY ’24 sorry Q3 FY ’23 it was 3.71 crores.
Tom Kadavil
3.71 crores.
Choudary Karuturi
Sorry, sir. Sorry, sir. Sorry, yes. Q3, yeah, INR3.71 crores in Q3 FY ’24. And in Q3 FY — yeah, in Q3 FY ’25, it was 8.43 crores.
Tom Kadavil
8.43 crores for three.
Choudary Karuturi
So in-between in Q2 FY — in — in Q3 FY ’24, it was 3.71% in Q3 FY ’25 8.43% and Q2 FY ’25, it was 9.09 INR9.09 crores.
Tom Kadavil
INR9.09 crores. Okay. Yes. Another question is, I know the volume depends on the supply, but can I get a rough estimate of the volume guidance for FY ’25 and FY ’26?
Choudary Karuturi
The overall, of course, supply is determinal, but as such, we do expect that we would be — we should be looking at FY ’25, of course, we will be more flattish compared to, I mean, almost around same as last year, mostly, but we expect that as I mentioned to the earlier participants also, it’s mostly subject to supply because there were big challenges which were created from some of the farmers also which were there in this year. But definitely as these challenges are overcome and now the stable environment is there in the market, we should look at going back to our earlier volumes of that 10,000, 11,000 plus moving forward as far as so we should be looking at better volumes. So almost — it depends on — again, it depends on supply, but this is — to be precise, it’s more of a maybe around 12,000, that’s what we expect.
Tom Kadavil
That is for FY ’25?
Choudary Karuturi
’26, sorry, we are in FY ’25. I told you we’ll be mostly be flattish around if we — similar to last year.
Tom Kadavil
Yeah, thank you. Thank you. But yeah.
Operator
Thank you. The next question is from the line of Yoganj Jaswani from Mittal Analytics. Please go-ahead.
Yogansh Jeswani
Thanks for the opportunity. Sir, we had been trying for getting approval from Europe and couple of previous calls you had shared that there was a pending you know their review in terms of our facility. So any further progress on that?
Choudary Karuturi
No change as of now and it is more between — not specific to our company. Any facilities since 2020 onwards for the past five years, almost no change — no change has been there. No new facilities have been approved and it’s a point which is being taken-up between the Government of India and EU Council at Brussels.
Yogansh Jeswani
Okay. Got it. And sir, in past calls, you have also mentioned that we were trying to tap into other world markets as well, Russia, Japan kind of market. So have we been able to break into any of those meaningfully?
Choudary Karuturi
In South Korea, we are starting there. But meanwhile, in the current year, as you would have noticed, we have, in fact, started some good business, not just — I mean good business with some new customers, but also we grew additional business with other existing customers and EU market. But outside the USA and EU, South Korea is something which this we are starting as we speak currently.
Yogansh Jeswani
Got it. And sir, if we go by the numbers that you shared in terms of the freight cost, we see a lot of our margins are getting eaten up by the same. Any possibility of pushing this cost to the customer because now this freight issue has been consistent for a very long-time. So is there a possibility that the customer is also okay to take-back some pressure of the cost on themselves or this is going to stay as it is?
Choudary Karuturi
Even with regard to the freights, as you know, keeping aside the pandemic, after the pandemic also, we have been having issues related to either port strikes or something which are some — which will be there for a limited period, but then crisis like the Red Sea environment where you know there is a constraints which are created logistically. Obviously, the freight costs have been kind of going up-and-down. As the problems ease out, freight costs come down, but if there are certain unanticipated problems like this Red Sea crisis, obviously, then the freight costs also increase.
To on the part of customer sharing, please understand the — the pricing as such an improvement is when we say demand, there is demand and there is also freight costs involved, additional freight costs and all these play a role in the pricing and so the customers also are providing certain extent of support for sure, because of the increased freight costs. They are not ignorant to the increased freight costs to answer your question. They are very much aware and they are also supporting because they know that it is logistic, it’s beyond us. It’s not just in the scope of — I mean, it is not within the control of any specific company, but it is the general environment for getting the product to themselves — to them for the product to reach them, which they do understand.
Yogansh Jeswani
Got it, sir. So sir, if we have to again go back to the previous margins which we used to do of 8%, 9%, 10% operating margins, do you see unless this freight cost issue subsides or the supplier side issues subside it will be very difficult for us.
Choudary Karuturi
It would be if we, as long as we continue to only focus on the ready to ready-to-cook products alone. We may have some leverage and better margin expansion as we try to improvise on our ready-to-eat sales definitely because that will be providing certain additional margin for sure. So currently, most of our volume is on the ready-to-cook and because of some demand shortages from the US, we got our overall utilization, which we also stated to an earlier participant, it went lower compared to the past compared to last year, especially.
We are definitely from the time we started our ready-to-eat products, this fiscal, I think we have been at its lowest utilization because of, as stated, certain demands from certain customers got affected in the beginning of the year. But that has been changing currently. And as we improvise more volumes into the ready category, I think that should definitely play an independent role on margin expansion, which most of you would be aware.
Yogansh Jeswani
Right. So sir, you just mentioned that to a previous participant that for next year, you’re expecting 12,000 tons of volume. In that how much are you penciling in from the ready-to-eat?
Choudary Karuturi
Well, actually, well, because the previous participant did ask and we were just saying it is subject to supply conditions, of course, as far as capacity utilization is concerned. But in general, we don’t really specifically give guidance on that. But we would definitely look at the similar volumes of like what we did like two years ago. So around 15% to 20% is what we expect. If the EU approvals are done, we can increase — we can increase it better because our new facility where we have majority of the capacity, as most of you would know, know is inaccessible to — to the — I mean the EU market is inaccessible to that capacity, both ready to cook and ready-to-eat. That’s where we are getting affected. So I mean, even if there was a drop-in the demand from the US side, which have definitely picked it up very well in the EU in the present scenario. But unfortunately, because of the regulatory approval constraints, we are unable to do that.
Yogansh Jeswani
Got it, sir. Yeah, that’s it from my side, sir. Thank you and all the best to you.
Operator
Okay. Ladies and gentlemen, due to time constraints, we will take one last question now and that would be from the line of Sachin from MC Research. Please go-ahead.
Sachin Pal
Yeah. Hi, sir. I just wanted to understand one quick thing. So we have had realizations of INR749 for quarter three. So how has that trended compared to the December exit prices and what they are trending now?
Choudary Karuturi
Sorry, can you repeat your question? You said we have a realization hello.
Sachin Pal
So we had a realization of 749 for the quarter three average, right? So how did that compare to the December end prices or how have they been trending towards the end of January? So what’s the trend in terms of the realization?
Choudary Karuturi
So the realization in dollar terms was similar, but you also need to understand that currently you know we are going at 87 rupees a dollar as we speak. There was a you know that definitely makes a big impact for Q3 part. In rupee terms, it will make an impact for sure because in the Q3, if the average was around between 84.5%, 85%. Now as you can see, there is a quantum jump from there to right now as we speak, it is INR87 rupees plus. So that definitely will be helpful in having a better realization in INR terms.
So with a stable dollar realization and any — and improvements in the real improvement — sorry, improvements in the realization in INR, definitely it should be in a much better level. So I wouldn’t exactly this at a particular number, but definitely, as you can see, this is a — it will be of great support when the dollar has — the rupee has — I mean dollar-rupee conversion has now moved up to almost two rupees between more than INR2 between last quarter and now. So this will definitely in this two months, this is definitely a better it is to be advantage of the company to answer your question on that.
Sachin Pal
Okay. Okay. Yeah. So if we just adjust for the dollar, so have the prices moved up from that perspective 5% is the dollar.
Choudary Karuturi
In the realization front, as I — as we — as I stated, definitely you will see a better realization in rupee terms per kilo, definitely it has improved. And as far as in dollars, it is kind of stable. Whatever we have not seen any reduction and certain things we are seeing in minor improvements in dollar terms, but it is very stable. That way we are very — you know, we are kind of good happy about that.
Sachin Pal
Thank you. Okay, sure. Thank you.
Choudary Karuturi
Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, that brings us to the end-of-the question-and-answer session. I would now like to hand the conference over to Mr Chaudhry Karu. Turi for the closing comments.
Choudary Karuturi
Yeah. Thank you,. Thank you one and all for attending our Q3 FY ’25 and nine months FY ’25 con-call. And for any further queries or clarifications, you may please reach-out to ir@apexfrozenfoods.com. Have a good day. Thank you.
Operator
Thank you, ladies and gentlemen. On behalf of Apex Frozen Foods Limited, that concludes this conference. You may now disconnect your lines.