Avanti Feeds Ltd (NSE: AVANTIFEED) Q1 2026 Earnings Call dated Aug. 29, 2025
Corporate Participants:
Unidentified Speaker
C Ramachandra Rao — Joint Managing Director, CFO and Company Secretary
D. V. Satyanarayana — Chief Financial Officer
Alluri Nikhilesh — Executive Director
Santhi Latha — General Manager, Finance & Accounts
Ramachandra Rao — Joint Managing Director
Venkat Sanjeev — Executive Director, Avanti Feeds
Kandhadi Reddy — CFO
Analysts:
Unidentified Participant
Nitin Abashi — Analyst
Yash Chandorkar — Analyst
Raksha — Analyst
Kumar Divyanshu — Analyst
Ayush Mittal — Analyst
Vincent Andrew — Analyst
Presentation:
operator
Welcome to a runtime. Your conference is being recorded. Good evening ladies and gentlemen. I am Pelshia, Moderator for the conference call. Welcome to Avanti Seats Limited Q1FY26 investors conference call. We have with us today Mr. T. Ramachandra Rao, Joint Managing Director. Mr. A. Venkata Sanjeev, Executive Director. Mr. A. Viklays, Director, AFL and Executive Director, Avanti Frozen Foods Private Limited. Mr. D.B.S Satya Narayana, CSO Avanti Frozen Food Private Limited Mr. K.S. reddy, CSO Avanti Pet Care Private Limited As a reminder, all participants will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star and zero on your touchstone telephone.
Please note that this conference is being recorded. I would now like to hand over the floor to Mr. T. Ramachandra Rao. Thank you. And over to you sir.
C Ramachandra Rao — Joint Managing Director, CFO and Company Secretary
Thank you. 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 the Q1 FY26. Mr. A. Venkata Sanjeev, Executive Director and Mr. A. Niklesh, Executive Director have joined online. Along with me here are Mr. Dbsakhinaina, CFO of Avanti Frozen Foods Private Limited and also Mr. Keshe Sinwas Reddy, CFO of Avanti Patriarch Private Limited and other secretarial and accounting staff members. To begin with, Mr. D.V. s Satyanayana will present highlights of financial results for the quarter ended 30 June 2025 of Shimpit and Shim Processing and Export Division and also consolidated financials of the company for the Same period thereafter.
Mr. K. Sinwas Reddy will present the status of PITCAIR project. After presentation by all of them, we will take up the question and add session over to you dvs.
D. V. Satyanarayana — Chief Financial Officer
Thank you sir. Good evening. Now I will take you through the consolidated and standalone division financial performance highlights for the quarter ended 30 June 2025. First I’ll take you through the consolidated financial results for Q1FY 2026. The comparative performance of Q1FY 26 with that of Q4FY 25 and Q1FY 2025 have been given in the presentation already circulated. Gross income in Q1FY26 is 1,657 crores as compared to 1432 crores in the previous quarter that is Q4FY 2025 so an increase of 225 crores by 15.7% compared to Q1FY 2025 that is corresponding quarter in the previous year.
Gross income of 1538 crores so there is an increase of 119 crore by 7.7%. The PBT is 249 crores in Q1FY 2026 as compared to 211 crores in Q4FY 2025 so we can see an increase of 38 crores by 18% and compared to Q1FY25 PBT of 180 crores there is an increase of 69 crores by 38%. The consolidated results indicate net impact of several factors such as increase or decrease in income and expenditure etc. Relating to feed and Frozen Food division which have been discussed in the following Divisional performance of these units individually Standalone Financial Results of Feed and Frosting Division so first I will take you through the Feed Division Q&FY 2026 results.
The gross income for the Q1FY26 is 1279 crore as compared to 1067 crores in the previous quarter of Q4FY25, an increase of 212 crores mainly due to increase in quantity of feed sold during the main season. The gross income in Q1FY26 decreased to 1279 crore from 1296 crores in the corresponding quarter of Q1FY 2025, a marginal decrease by 17 crore due to increase in sales quantity by 6974 metric tonnes and the same has been compensated by decrease in sales price by 4 rupees per kilogram. The PBT for the Q1FY26 is 224 crore as compared to 194 crore in Q4FY 2025 an increase of 30 crore by 15.5% mainly due to decrease in raw material cost.
The PBT in Q1FY26 was increased by 71 crore from 153 crore in Q1FY25 represented by 46% due to increase in sales and decrease in raw material cost. The feed Sales increased to 1 65,564 metric ton in Q1FY 2026 as compared to 1. 29,711 metric ton in Q4FY 2025 and in Q1FY 2025. The total feed sales were 1,58,591 metric tonnes. Increase in profitability when compared to previous quarter and corresponding quarter of the previous year is mainly due to increase in sales and other income. Also decrease in raw material cost and better overhead absorption. The major raw materials are fish meal, soya bean meal and wheat flour.
The noticeable development in this quarter is softening of two major raw materials I.e. fish meal and soya bean meal resulting in improvement in the profitability. The prices of these raw materials keep fluctuating since their production is based on agriculture and the fish catches from the ocean. The prices of fish meal increased to 93 rupees per kg in Q1FY 2026 from 91 rupees per kg in Q4FY 2025 and decreased from 117 rupees per kg in Q1 FY 2025. In case of Koya bean meal prices reduced to 39 rupees per kg in Q1FY 2026 from 40 rupees in Q4FY 2025 and 49 rupees in Q1FY 2025.
However, the wheat flour price decreased to 31 rupees per kg in Q1fy 2026 from 36 rupees per kg in Q4 FY 2025 and it is increased from 28 rupees per kg in Q1fFY 2025. While on 1 hand the raw material prices are instrumental in determining the margin, on the other hand the status of aquaculture activity Conditions such as climatic changes, diseases etc. Determine the consumption of feed in terms of volume which will have an impact on the overall performance. As you notice, the first half of the year 2025 has been a good profitable period. However, the forecast for the second half of this year is challenging due to factors like gradual increase of raw material prices and levy of reciprocal tariffs by us at the rate of 50% which will have a significant impact on the performance of the company, particularly the second season.
To sum up in general, FY25 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, global demand for shrimp exports, shrimp production and feed consumption in FY 2025 and company plans for FY 2026 shrimp feed consumption on the basis of estimated shrimp production of about 10 to 11 lakh metric tons in calendar age 2025, the feed consumption is estimated to be about the same level. The company’s feed sale during the FY 2025 was 5.55,247 metric ton against 5.31,967 metric ton in the financial year 2024.
It is estimated that the feed sale during FY 2026 would be around 5.60,000 metric tonnes. Shrimp Processing and Export India’s shrimp exports touched 7.45520 metric tonnes in financial year 2025 generating a revenue of $5.17 billion. Frozen shrimp remained the major export item in quantity and value, accounting for a share of about 40% in quantity and 66% of the total dollar earnings. The company’s shrimp exports during the FY 2025 was 14,149 metric tonnes as compared to 13,444 metric tons in the year 2024 and increase by 682 metric tons. It is estimated that the exports during FY 2026 would be around 17,000 metric tons.
So now I will run through the shrimp processing division Q1FY 2026 results the gross income for Q1FY 2026 is 378 crores as compared to 364 crores in Q4FY 2025, an increase by 14 crores representing 4% mainly due to increase in sales quantity by 123 metric tonnes which represents 3%. The gross income in Q1FY 2026 increased to 378 crores from 243 crores during Q1FY 2025, an increase of 135 crore representing 56% year over year growth. The sales volume during Q1FY 2026 increased to 4223 metric tonnes from 6783 metric tonnes in Q1FY 2025, an increase Of 1440 metric tonnes.
Higher sales in Q1FY 2026 was driven by majorly volume growth, an increase in average selling price realization and of course favorable foreign exchange rates. The PBT before exceptional item for Q1FY 2026 stood at 25 crores from 18 crores in Q4FY 2025. Due to higher sales volume increase in average sales price realization and increase in RM price, the PBT in fuel FY26 was 25 crore a decrease from 27 crores the corresponding quarter I.e. q1 FY 2025 primarily due to marginal increase in raw material prices. So now I will update on the fish feed business. As reported in earlier, the company has imported fish feed from Thai Union Feed Mill Co.
Ltd. And is conducting trials under Indian conditions. Once the product performance is approved, the production in India will be taken up for domestic sale. So with this feed and frozen divisions are completed. Now I hand over to Mr. Keith Srinivas Reddy to update the status of pet food project. Thank you Mr. DVS Satyana Rena now I would like to update the pet food project. As already informed you, the company successfully commenced trading in cash food from January 2025. It’s our first product range under the Auntie Pet Crate brand that is our first in cat food ocean fish flavor.
The response from the Fed owners is highly positive as on date we cover the 60% of pan India. During Q1FY25 26 the company recorded sales rupees 38.17 lakhs showing a showing steady growth from the rupees 25.79 lakhs in Q4 2425 in one cat food flavor. In July 2025 the company expanded its cat food portfolio with the launch of second flavor Suna. In addition the company launched a dog food chicken and vegetable flavor trading started in August 2025 which construed the largest share of the pet food industry around 65% on the market expansion. The company expanded its presence in Tier 1 cities and initiated expansion in Tai 2 and Tier 2 cities market.
In addition to this, E Commerce operations are planned from September 2025 followed by quick commerce from December 2025. Enable wide reach and faster consumer connect. The company continues to focus on creating a strong branded feasibility offer. Our the digital marketing campaigns and Instagram and Facebook that is aimed at increasing consumer awareness and or brand engagement. As you know, company has purchased and converted from agriculture to non agriculture approximately 30 acres of land near Hyderabad, proposed a state of art manufacturing facility and present the survey and land development for construction is in progress. The company is planning to commence the construction by end of this year.
After obtaining Necessary government approvals. This is about the update of Pet Care. Now I hand over to Jam with us for closing remarks.
C Ramachandra Rao — Joint Managing Director, CFO and Company Secretary
Thank you, Jay. As I have already seen, the performance has been so good. Let me just give you update on the current quarter which is in progress now. Initially the culture started very well and it was progressing. But due to heavy rains there was the fast, I mean premature harvest and some diseases here and there. Actually. Temporarily slowed down the aquaculture activity. And now again it has started and going very well. So we expect that this trend would continue throughout September and October so that we get good production by this season, by October November. So that will take care of the production requirements whatever that we have anticipated in respect of peace sales. That being the case about the feed, the other important aspect about feed is the increase in raw materials raw material prices. It is little bit surprising that some of these prices have gone up which has been more or less stable throughout this year right from the beginning.
For example, fish meal which has been quite long at the rate of around 9394 has now come up to 105 now. Similarly soya bean meal which is around 3839 has gone up to 47 now. So these prices have gone up. One of the reasons being that the government has announced minimum support price which is effective from October. That is one of the major reasons. And we expect that the fresh crop of soya bean meal would arrive the market in the month of October. So we expect that the prices of soya bean meal could stabilize by then because as of now the crop is growing well and we are expecting a good crop this year also just as in the last year.
Similarly in the wheat flour. Wheat flour was about 31 rupees in the Q1, 26 but now it is around 35 rupees. So this price has also gone up and the fresh crop comes around end of February and March. So we expect that some stabilization would take place in respect of wheat flour. So as you know, and we have been saying almost in every con call that the raw material prices are very crucial in determining the profitability and margins of feed divisions. So we look for stable prices in the rest of the financial year also so that we end up with the volumes more or less the same marginally increased.
It is about five 60,000 metric tonnes we are expecting. And if we achieve the that the volume and price being stable, we should be able to make reasonably good returns. Now coming to the most important aspect, this is the burning topic of today, that is the US living reciprocal tariffs from the 50% is effect from 37. It has come into effect now. Several efforts have been made by the governments and export promotional organizations to arrive at a reasonably good level so that it will be beneficial for both the countries for bilateral trade. However, as of now there is no such development which has taken place and the effective 50% has come into force.
That having realized the reality then we have now working and we have been in fact working for some time to develop our markets to other destinations like Japan, like Europe and Canada and other countries where we want to expand. And we have been able to achieve reasonably good results over the past one year. Gradually we are increasing and decreasing dependence on the US market. That is a positive development. And also we are expecting the government also would come into the help of these industries, particularly the three sectors which have been severely affected by his 50% tariff.
That is textiles, then German jewelry and aquaculture. So we have learned that the government is already been seriously working on the modalities, how these industries can be supported for survival and to look for other markets by way of increasing the exports instead of us. And simultaneously the government is also working on promoting the domestic market so that as an alternate to the export market we have a big population in India and the consumption of shrimp is very, very low. So this is the one opportunity that has come in the way. So we want to, with the government support we hope that we will be able to promote the domestic market sales also.
And we have already started and we have achieved reasonably good success. And in course of time Mr. Nikhilesh will explain you the steps that we have taken for this promotion of the domestic industry. So the coming to the specific rates, I think India has the highest. I think there are only two countries in the world which has got one is Brazil and India have 50% the highest. Thailand has 19%, Vietnam has 20%, Indonesia has 19%, Ecuador 15%. So these are the rates. Of course we are nowhere near any of these countries. But nevertheless we are very confident and we should be able to get back into our sales to other countries and also domestic sales.
We don’t see any big challenge in the long run. It is only a short lived and a temporary phase. By I think maybe about three to six months time we should be able to get back to our original position. There should not be any problem. So of course there’s the details of how this 10% before 17 September arrival in US rate is 10%. Between 17 September and 5 October arrival in US it is 35%, 10% base line time is 29% or total 35% after 5 October it is 50% goods loaded on a vessel for final transit between 7 August and 27 August before 17 September in US 25% on or after 17 September 50% goods loaded onto a vessel for final transit after 27 August arrival in US resort of arrival date 50% in addition to the tariff rate of reciprocal tariffs of 50%, the Navy of CVD which is at the rate of 5.77% presently is always an additional burden to the export of Shims to US which is the largest export market for the comparative date.
Keeping this factor in view, the endeavor of the company is to expand its global market to other destinations like Japan, Korea, European Union and Middle East. It is pertinent to mention that we know the reciprocal tariffs by US having come into effect, the Company and in India are focusing on export to agriculture market and also promote domestic market for shooting sales. Further, it is reliably learned that Government of India is also working on steps to support the varying products export sector at this danger of three year hardship cost to exports to US. We do hope that the government will roll out an appropriate measure to mitigate the adverse impact on account of the reciprocal duty.
Overall, the global market consumption is expected to be stable 2025 compared to 2025, maybe with a marginal increase by about 5%. The focus is on demand for value added products which is gradually increasing and processes see better margins in value added products and the company is also focusing more on value to get a better margin. Where the company is working with this objective to maintain the best margin. I think with this I will now open the notification for question and answers.
Questions and Answers:
operator
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If we have a question, please press Star and one on the telephone keypad and wait for your turn to ask request. If you would like to withdraw your request, you may do so by pressing Star and one again. Ladies and gentlemen, if you have any question, please press Star and one on your telephone keypad. First question comes from Nitin Abashi from Encrypt Capital. Please go ahead.
Nitin Abashi
Hello, I have two questions. Firstly on the volumes front and this is not on the feed volumes but not for the company. For the industry as such. For the shrimp industry as such. Do you expect a fall or stability within the shrimp feed volumes?
C Ramachandra Rao
I think the shrimp feed there will not be any fall. We are expecting that it will be the same level as in the previous Year even slightly better. We are expecting about 5,60,000 petrific tons of feed this year. As far as the shrimp is concerned, the production is also likely to be there more or less the same level. Yeah. We do not expect any, you know, reduction, steep fall in the production of shims this year because of these tariff changes.
Nitin Abashi
Understood, sir. The second question I think Niklesh sir, would be most suited to answer this question. It’s on the processing side of things, but broadly because of these tariffs which has come out and because the whole industry is getting disrupted, do you see any positive developments coming out of this? When I say positive, what do I mean? I’ll just clarify that. So, you know, we have that thought process narrowed down that do we see. The price inflation of this commodity within us, you know, making it very expensive for the US consumer to actually have this produce by which that whole conversation that keeps happening that India is dumping. Will stop happening and the US consumer. Will realize and the market will realize. That we have a necessity to provide. Shrimp at an affordable cost to the. US.
C Ramachandra Rao
Hi Nitin, I hope all is well. Yes, I think you’ve been consistently the first person to ask the question the last few quarters, but that’s a good question. So to answer that very. I think that’s a very broad question and it’s. That’s a lot. There would be a lot of speculation and everybody’s opinion would differ. In my opinion, yes, there will be a lot of inflation. Like there’s definitely going to be an inflation in the price of shrimp in the US because all the producers have duty. So the minimum is 15% for Ecuador and going up to almost 50% for India, which is the major supplier to the US so there is definitely a price increase.
But in my understanding on the dumping viewpoint, we need to see what the regulator looks at. Basically they usually look at whether we are selling to the US at a much lower price than what we’re selling to other markets, thereby dumping the product. So that’s something that the doc will have to review. But right now it would be too early to speculate how they would view this. But on the inflation point, definitely there will be. We’re already seeing that in the market that the price of shrimp is going up not gradually, but quite drastically.
Nitin Abashi
Understood, sir. So all the shopping for from the US importers for this year’s holiday season would have been done or would a part of it be still stalled because of the tariff?
C Ramachandra Rao
I think a good portion of it is completed, at least for Avanti. We did ship out a considerable amount of product in the first quarter. That’s why you see a huge jump in revenue. So but there are always parts of it which need to be shipped out. So we continue to ship at the moment to the US market and I believe that’s also for the industry. The November December period is the holiday season in the US where they require shrimp a lot, where people are eating out and preferring to eat seafood. So the retailer, from what I understand would like to continue having product on their shelves.
So there are shipments continuing. So the short term impact is not as large as we anticipated.
Nitin Abashi
Understood sir. Thank you.
operator
Thank you. The next question comes from Yash Chandorkar from Vivog Commercial Ltd. Please zoom in.
Yash Chandorkar
Yes. Hi. Yeah. Yes, thank you for giving me opportunity. I have two questions. First, want to understand overall how this. Tariff will impact on our company. And second one is I want to know is any rerouting of our shipments is happening or in general also like shame shipments, we are from some other countries or like that.
C Ramachandra Rao
Yeah. So. So on the impact of the industry generally I would say that the 50% tariff on India impacts almost 55% of the total exports into the US market covering several sectors including seafood, textiles, gems and jewelry, etc. So on that front definitely there’s an impact on the volume. So at the moment, like I answered in the previous question, the immediate impact is not as much as we thought because we continue to ship because they cannot replace their supply chains almost immediately. Especially since India is one of the largest producers of shrimp. So on a short term basis we don’t anticipate as large of an impact as we first saw when the tariff of 50% will introduced on Avanti itself.
As you know, our feed business is about 50% of the market share. So all the products, all the farmers that we sell to who are selling to non US markets also are part of the system. So the impact over there is not as large the impact that it would be on the processing business where we derive more than 60% of our revenues from the US business. So that’s the first part of the answer. Could you repeat the question? Second question again, just want to know.
Yash Chandorkar
Any rerouting in our shipments.
D. V. Satyanarayana
I’m sorry about that. So that’s completely illegal. So that we don’t definitely do anything like that. We don’t read out any of our shipments.
Yash Chandorkar
Okay. And industry wise if you see like from any other countries, is this happening?
C Ramachandra Rao
I again like I said that this, this is, this is not elite, this is illegal in the US Government signs out Then we’re talking about the complete ban on the company and like severe federal penalty. So definitely I don’t think and advise anybody to look into that. Okay.
operator
Okay. My questions. Thank you. The next question comes from Ronaksha from Aquares securities. Please go ahead.
Raksha
Thanks for the opportunity. So my first question is regarding to the processing business or the export, both from the industry and a one piece viewpoint. So once our shipment have started reaching to the territory where the tariffs are taking place at 50 odd percent, are we seeing discounts or some sort of passing of that carry from the customer and to the companies in India. And secondly as highlighted that there cannot be a near term impact. However if we assume the status will take a time to get a update how we think with the impact in terms of the sales and the margin.
C Ramachandra Rao
Okay, so the first question on tariff passing on see the tariffs of 1550% is something that we cannot absorb. So we’re definitely passing it on to the customer. And the customer in turn is averaging out their total purchases from different countries at different tariff rates. Because as you know the US policy has been extremely volatile in the past eight months. So right now even the customer is taking the wait in view approach. Things can change overnight in the current situation with the volatility that we’ve experienced in the past few months. So they continue to do business as usual.
So they are averaging it out and putting it on their shelves. So that we need to see what is the impact on sales in the next probably in early 2026. So that said on the second question, like you said, the short term impact is not as large as we anticipated. But of course this will have long term repercussions on the short term. As you know, Abanti as a company has been diversifying from the US market actively in the past few years. So we do have other customer base outside the US which is continuing to support our manufacturing.
So currently we have not stopped production. We’re continuing to produce to our customers around the world on the margin. I think in the short term we still look at stable margins and look to have the same profile in the next quarter at least looking at things today.
Raksha
Okay. And my first second question is regarding to the overall guidance. So when we look through the conversation which we had till now, so we are seeing the higher tariff it can be the second crop is looking difficult on top of that current heavy monsoon and all which has infected some crops. So how management is confident of achieving 5.6 lakh ton of sales in FY26 and on top of it 17,000 metric ton of exports where we are seeing such kind of volatility and the heavy dependence on US market.
C Ramachandra Rao
Yeah, I think it has two parts. Let me just tell you as far as the production is concerned. So we believe that the production this year is about 5.6 lakh metric tons because the same level as in the last year. Previous year, in the first season we started very well and in between we had some setbacks because of the untimely and heavy rainfall and also some spread of diseases and premature harvest. But now again it has picked up and now the culture is growing well and we keep continuing to grow shrimps. And as far as the market is concerned we have a strategy and Mr.
Nikleshe would explain you that how we are trying to find the markets for the total production that the capacity utilization of our plants and how to make use of the production that we get it. Nikilesh, could you just give a highlight on that?
Alluri Nikhilesh
Could you repeat that question please?
Raksha
The question what you are saying that because we are going through, we said that the second crop, that is what is going on now also will have a few good crop. We are expecting this question is that how will you find the market for this increased production because of these tariffs, Am I right?
C Ramachandra Rao
Okay, yeah, just refining my question. So I just want to understand when management is giving a guidance of five and half lakh tons of the feed sales and on top of that 17,000 of exports of the product. So how confident we are? Because as highlighted, yes, in short term we are not seeing any impact but in longer term it may impact.
D. V. Satyanarayana
So how I understood your question, sir. So basically see at 50% tariff it is like quite a difficult situation for India as an export market, not only for shrimp but for all products that are going towards the U.S. that said, because 50% of the total seafood in India is exported to the US There are definitely lot of work that the that the country is doing like signing FDA’s and with UK and also trying to work with other countries. But it is definitely an impact. So the confidence level is not at a high 90%. Definitely. Right.
Because we are battling a sort of volatility and a high tariff rate in the short term. But on the long term we hope that India and US can conclude onto some kind of understanding because it’s impacting the whole country. But as a company we are actively diversifying into other markets. We have good clientele. On the first quarter we reported a 50% jump in sales. So that’s a huge amount of sales that we already covered. In the first quarter, second quarter is also looking good. I wouldn’t say that there’s a big problem but on the long term, if this tariff continues to stand, definitely there’ll be a shortfall in the volumes.
What we did last year and this is not consistent only to Avanti. It would be consistent to the whole industry and it would be consistent to the whole country as well in other industries also. So that said, like I said, we are quite confident that in the long term we will be able to diversify into other markets. We would be able to work in the domestic market where there’s a lot. There’s a huge consumer base of more than 1.4 billion people. And we also looked at the India US relations normalized in the long run. So I hope that answers your question.
Raksha
For the last one. So lastly, from the margin viewpoint, so we are sitting on the 29th of August it’s like a 60% completion of the quarter. And on the margin front how you are saying? Because I guess we are absorbing, we get our part. So considering the current RM price and the volatility, are we expecting around 6 to 7% on kind of.
D. V. Satyanarayana
That we need to see and that we need to see at the end of next month. Right. So because we can’t disclose it right now.
Raksha
Okay, that’s it for my. Thank you.
operator
Thank you ladies and gentlemen. If you have any question please press star and one on your telephone keypad. The next question comes from Kumar Divyanshu, an individual investor. Please go ahead.
Kumar Divyanshu
Thank you for giving me opportunity. And for the very good question is first question like the your business upstream feed manufacturing. So I would like to ask from this aspect that how much domestic market produces of your revenue? Like would you suggest me in the percentage then because it is a one of the largest part of your business. 99 would be the domestic market.
D. V. Satyanarayana
Are you asking through feed or.
Kumar Divyanshu
No, sir, I’m asking. I’m asking about green feed manufacturing.
D. V. Satyanarayana
Because 99% as Mr. Niklesh said it’s 99% domestic market.
Kumar Divyanshu
Okay. So according because this is the largest part of the business. So I think the impact due to the tariff will not much on your revenue.
C Ramachandra Rao
No, see we are expecting as I told you 5.6 lakh metric tons of peat. We are planning to produce and sell this year. So the not only the US market shims but also there are other markets also the production keeps going on for other markets also. Though the production will not stop, the shrimp production will go continues and we are confident that the production will be Production of shims will be on the same level as in the last previous year and similarly the feed also consumption will be on the same level. We do not see any fall or decrease in the sale of shim feed or sim sales.
Kumar Divyanshu
Okay sir and so next question is from the ratio section that is days payment in March 2025 has been increased but rest out on the things have been reduced so could you please comment on that?
D. V. Satyanarayana
Please repeat again can you please repeat.
Kumar Divyanshu
The question Page number in the ratio section the days paid in March 2025 has increased as compared to the March 2024 but rest on the ratios are fair good they are decreasing so could you please comment on the days payment?
C Ramachandra Rao
Yes, please hold on. Yeah, just the ratios on 2024 give me the page number please. Can you please give me the page number?
Kumar Divyanshu
Actually I’m just checking one of the from the source data which I have fetched from the online it is mentioning over there that base payable in March 2024 was 27 but in March 2025 it ends to 34 but the debtor days, inventory days, cash conversion cycle, working capital days or are in decreasing same. That is very good. Just this is a confirming point which I want to have.
D. V. Satyanarayana
No, we don’t know where from you where did you get? I think can you please send the mail we will answer you because we are not able to get hold of the numbers which you are speaking about.
Kumar Divyanshu
And the next question is how did you see or how you are seeing upcoming quarter result of September and December. Is concerned we will have to wait.
Kumar Divyanshu
This is September is not yet over? No, it has not yet started so we will see wait for one more month. I think next quarter Kanpal will be able to discuss more about this quarter’s performance.
C Ramachandra Rao
Actually because of the tariff and. Also do you see any decline in the sales or in part of the revenue? Niklesh, could you please take this call.
Alluri Nikhilesh
This question could you repeat that question please?
Kumar Divyanshu
I’m telling that in the coming quarter of September and December so could you be suggested that what will the effect of tariff on your revenue like? Will it get hampered so much or is there any trend to overcome on it?
Alluri Nikhilesh
I think as of now if the tariff continues at this rate I would feel that the impact would be seen not in Q3 but probably in Q4 because according to our accounting whatever we’re shipping today only when it delivers into the warehouse of the customer we recognize it as revenue. So which takes a lead time of 50 days. So I don’t think there’ll be significant impact in Q3, but you would see more impact in Q4 if the tariff continues to hold this way. And if you asked about Q4, I would just say it would be better to answer this question next month because I mean next con call because things are changing every day so it’s difficult to speculate for the last quarter right now.
Kumar Divyanshu
Okay. And the last question is from your business, from H3 and pet care. So is there any planning to increase the revenue from both the two segments of the business.
C Ramachandra Rao
We want to increase? There is no. I know we are not yet. We don’t have any immediate plans for expansion or this thing. We are just watching. You know, there’s so much of volatile in the market. We want to keep watching this year and take decision and the Q4. Maybe at that time we get a clarity on the future prospects and how things are going. We are now for the present we are focusing on the other picture and other diversified products.
Kumar Divyanshu
Okay, thank you. Thank you so much. Thank you very much.
operator
Thank you. The next question comes from Ayush Mittal from Mittal Analytics Private Limited. Please go ahead.
Ayush Mittal
Good afternoon everyone. Am I audible? Hello.
D. V. Satyanarayana
Yes sir. Yes, you’re audible.
Ayush Mittal
First of all, my application to the. Company for a very good performance. When we compare a performance to other. Peers, Avanti always stands out in terms of what our company has delivered, maintain its leadership in the shrimpy segment. The margins we have done all those things are very commendable to the entire team. Now coming to the current challenges that. We are seeing, I think this tariff. Thing is a big issue. When we are reading the newspapers, amount. Of tariffs which we have been put. Though we all would be hopeful that. Things revert to normal or these reverts. But as of now, given the negative environment, have we been asked to cut down the feed prices by the government or something?
C Ramachandra Rao
No, not nothing like that because at this point of time, you know, we have recently cut our prices by 4 rupees. So there is no such request from the government nor from the the farmers. We don’t have the cut was there. When was that done? April. Okay. Okay.
Ayush Mittal
So if we see a feed segment, I think the operating margins are at a very high side versus the normal. Margins we used to do. And now that RM prices are also rising. So we should be coming back to the normal margins of 10, 12%. Is that the right number?
D. V. Satyanarayana
Yeah, but you know, these things are highly volatile. As I just mentioned in my the initial remarks that the prices are slowly going up. We wish that it will get Stabilized again once the new crop of soya and also we get a wheat price, the fish catch is also good. So then the prices, if they remain, definitely will have the good margins. But having said, this is not in our hands. It is. The raw material prices are dependent on so many factors because they are agri products, soya and wheat and fish meal depends on fish catches.
We cannot say that suddenly it drops. Catches the drop. It has happened about 15 days back. The catches started declining very fast, so the prices went up. Then when the catches come good, the prices come down. So it’s highly volatile. Yes, we only wish that it will be stable. So we should be able to give you better margins.
Ayush Mittal
Got it. So like you mentioned that this crop was impacted due to very heavy rains. So is that the reason that we are seeing a very sharp drop in. Export data for the industry in these recent months? Like after Q1 was very good. But the articles that the volumes of. Shrimp exports have been very much impacted from India.
C Ramachandra Rao
Please go ahead. Nicholas. Yeah, could you repeat the question?
Ayush Mittal
After a very strong Q1, there are certain reports that the shrimp export volumes have fallen dramatically in last one or two months from India. Is that due to the crop issue.
Alluri Nikhilesh
We mentioned earlier or is it due to the tariff or temperature? So it’s primarily due to the season. It’s monsoon season. So when it’s monsoon it’s low season. So the exports will be quite low in that period. There’s low availability of raw material simply because like if it’s raining so much, the shrimp will come out of the pond. Right. So generally we consider that as off season point number one. Point number two, President Trump announced it. Tariff people were just more cautious on putting product out on the water and then again talk to the customer, get some guidance on what to do with the product.
Both these things coupled together would have put an impact on the total export. Got it, got it. And did you, like you mentioned earlier.
Ayush Mittal
That you expect a revival in coming months?
C Ramachandra Rao
What do you mean the revival in total export? Yeah, I think currently, right now. I did not say that I expect a revival. I said that we hope that things would normalize in terms of our relationship, India as a country with the U.S. sure, sure. On the animal seed like the pet venture that we have started, is there.
Ayush Mittal
Certain revenue numbers or targets that we have set for this year? Yes.
C Ramachandra Rao
Venkat.
Venkat Sanjeev
Yes, sir. We have a target of 10 crores for this year.
Ayush Mittal
Okay. And given that we are doing a. Very large expansion in this segment, would we also try to get into some contract Manufacturing and other things for MNCs. Or foreign companies because that is how we will be able to utilize our. Plan given the large investment we are doing.
Venkat Sanjeev
Any, any thoughts on that? Yes, we’re looking at all the possibilities that we can do for the bigger players to export or when the plant. Is ready and any timelines for that. It will take a year and a half or so. We’re going to start construction of plant by end of this year. So it should take a year and a half or so from this.
Ayush Mittal
Okay? Okay, got it. Thank you. One more question from my side. Niklesh, if you can also talk about the shrimp processing segment. Like I think we were doing some more expansion on that side and we were looking to ramp the volume sizer given the current environment. How you thinking about that part going forward?
Alluri Nikhilesh
So that currently we are doing a wait and see approach. Right now we put on hold any further expansion because of the current talent situation. But in the long term view, personally, in my personal opinion, I feel that things will normalize. The only question is when and then we still enjoy a good customer clientele confidence on our products mainly based on our quality and our range of offerings. So when things normalize we can quickly get back onto those, put those plans back on track. So right now they’re on hold temporarily. They’re also like kind of planning long weighted maintenance projects etc.
It’s the right time to do those. So I. I guess some. One of the. One of the investor in the previous questions asked is there anything good that we’re looking at it. It’s good for us to focus on some R and D work, maintenance works, etc. In this situation. So I hope that answers your question.
Ayush Mittal
Yeah. Thank you.
operator
Thank you. The next question comes from Rahul Rati from Khalil. Please go ahead.
Unidentified Participant
Yeah. Hi. Congratulations on a great set of numbers. I had a question on the supply side. Given the tariffs and the fact that you might start, you know, capex as you get visibility. How does our quality can it be replicated in any other geographies and is there a moat around our geography and quality at the volume that we are looking at?
C Ramachandra Rao
That’s a good question. Generally in the markets Indian product is very good for food service. So this means that when a restaurant chef picks it up, they really enjoy Indian product because of the workspend ships, the quality parameters and the overall quality control over the other peers. So I wouldn’t say that it’s a moat but I would say that there’s definitely a preference that’s why? India accounts for more than 40% of the exports to the U.S. market. Second, you know, shrimp processing itself is a highly labor intensive work profile. So like, think about a country like Ecuador with probably right, I think the population is about 50 million or 60 million and US is about 1.4 billion.
So there are lots more manpower that’s available to do those higher value products compared to competing nations. But that said, at a 50% Paris definitely there is going to be a shift in the consumer preference on consumption or even the restaurant buying decisions. So on the short term, I think like I said in the previous question, this mode is probably will save us on the short term. On the long term, definitely there would be re shaping of the supply chain to the US if it continues at this tariff levels.
Unidentified Participant
Right. Does volatility in electricity also play a role in quality of shrimps? So I was just looking at Ecuador and I’ve seen that, you know, there are a lot of power outages. Does that have a role to play?
Alluri Nikhilesh
Yes, generally electricity like you see, like you need to run your cold stores or you need even your, or even the farm you need. People need continuous electricity. So if there is outages then people are running them on diesel engines like we used to do back in the day. So definitely it affects the cost of production and everything.
Unidentified Participant
All right, but, but what you’re saying is that even with electricity outages, if they have the adequate power, they should be able to maintain quality. And electricity is an important part.
Alluri Nikhilesh
Yeah, it’s perishable product, so it’s important, it’s an important part.
Unidentified Participant
Oh, and, and, and a certain temperature is important to quality. That’s why.
Alluri Nikhilesh
Yeah, it’s all cold chain. Right. It’s all cold chain based. And even in the farm like you’re, you’re using aerators to feed oxygen into the water for the ocean. So that’s also an important part.
Unidentified Participant
Okay, and, and is there a time if, if you don’t get it into cold storage when then it starts deteriorating? So is there a certain part of the process that is also a certain reason why India is 40% of exports to the US and yeah.
Alluri Nikhilesh
I would, I would say yes, definitely. There is no electricity available and there’s no diesel genset that is on a backup. That means your whole inventory will be written down. Right. They don’t have the power. But that’s an extreme case. I would say that that doesn’t, I mean I wouldn’t go into that direction towards electricity. People would generally have a diesel genset with enough fuel to power the plant if they’re running that kind of operation.
Unidentified Participant
In terms of quality consciousness, is Japan the most quality conscious?
Alluri Nikhilesh
Yes, Japan for sure is up there. On the quality conscious customers I would say generally in Japan, Korea, highly quality conscious. But again you have these stacks of customers everywhere in the US there are certain customers that are highly quality conscious. But overall as a country I would say Japan is because they eat food with low seasoning, no sauce, so they tend to just steam it and eat it. So they have a higher quality standard for that reason.
Unidentified Participant
And are we exporting to Japan also?
Alluri Nikhilesh
Yeah, we have a good plant in Japan.
Unidentified Participant
And is that increasing too?
Alluri Nikhilesh
If you see our Asia sales generally we’ve been increasing quarter on quarter.
Unidentified Participant
Is it more than the volume growth in Japan or is it similar?
Alluri Nikhilesh
I would generally club all these together. The reason being we just want to keep our markets more confidential. So I would say yes, Japan is part of Asia and overall Asia is performing well.
Unidentified Participant
The other thing is in terms of, you know, in terms of operating cash flows and Capex. So right now it is on hold for shrimp feed and shrimp processing. But any, any guidance on, you know, what kind of Capex would you be doing for fish feed and you know, pet feed over the next two years?
Venkat Sanjeev
Yeah, the fish feed. As we told you, the trials are going on and if we find a suitable feed appropriate for Indian fish culture then we’ll be able to set up the manufacturing facility that they will have a Capex. It will not be very much, it will be a medium level industry and as far as the pet care is concerned, we have purchased the land and we are in the process of preparing the DPR and we’d be able to finalize the numbers by next quarter. I think maybe we’ll be able to give you the numbers the next quarter investors call.
Unidentified Participant
Sure. So thank you. So any Capex guidance would be generally helpful in thinking.
C Ramachandra Rao
Certainly, certainly we will share with you as and when we decide on Capex.
Unidentified Participant
Thank you. Thank you.
operator
Okay, next question comes from Vincent Andrew from Geog Financial Services Ltd. Please go ahead.
Vincent Andrew
Hi, good evening. Thanks for the opportunity. So most of the questions have been answered. So I have two questions. Just give me the data of export instant that you accounted for this quarter. And the second question is, see considering the private situation, since you have already mentioned the 50% not may not be able to pass on to the customer. So are we able to or is it possible for you to pass on some percentage on the supply side and what is the average for this quarter and currently.
C Ramachandra Rao
This incentives Pli. Okay. I think we don’t have any long term now as of now. Niklesh.
Alluri Nikhilesh
Yes, sir. So I’m, I’ll, I’ll answer the second part of the question. On the market as such. So currently they’re able to pass on the increase in duty. So, so that’s been good. Some of the hump. Some good customers who continue to take product, especially because they want products on the shelves of the Christmas New Year period. So that’s one thing. And again to add to the same thing that I was telling everybody else that we’re looking to actively, we’re working very diligently to expand into other markets on the raw material price. We see that there was some, as soon as the tariffs were announced, there is some softening in the raw material price.
So there is some uptake by the farmer, some kind of softening. But again that was centrally. And this farm gate prices again started normalizing. So we need to look at this at the long term. So I would say, I would say that everybody can agree that 50% is a very big number. I don’t think this is just on some kind of calculation, but it’s some kind of duty levied on India to come to negotiate with the US government. So we need to really see where it stands in the long term. But in the short term there is some softening on the raw material, some customers supporting the tariff increase.
So there is all kinds of, you know, support. But 50% is too much for the supply chain to take in. You know, everyone combined together can’t put in 50% margin.
Vincent Andrew
Yeah, thanks for that. Hour average. If you can send an email to us, maybe we can discuss that more in detail over there. Because when we’re talking about 20 different sizes and pricing variants.
D. V. Satyanarayana
Okay, and Rotor. What was the question on road tab?
Vincent Andrew
How much was the amount of incentives received?
D. V. Satyanarayana
Oh, can you please drop an email so that we will check and confirm?
Vincent Andrew
Thanks.
operator
Thank you. That would be the last question for the day. Ladies and gentlemen, on behalf of Avanti Speech Limited, this concludes your conference for today. Thank you for your participation and for using doorsabhar conference call service. You may disconnect your lines now. Thank you and have a good day. Thank you. Your conference is no longer being recorded.