Avanti Feeds Ltd (NSE: AVANTIFEED) Q3 2025 Earnings Call dated Feb. 24, 2025
Corporate Participants:
C. Ramachandra Rao — Joint Managing Director
Santhi Latha — General Manager – Finance and Accounts
D.V.S. Satyanarayana — Chief Financial Officer, Avanti Frozen Foods Private Limited
Srinivas Reddy — Chief Financial Officer, Avanti Pet Care Private Limited
A. Nikhilesh — Executive Director – Avanti Frozen Foods Private Limited
Analysts:
Nitin Awasthi — Analyst
Kamal Sharma — Individual Investor
Unidentified Participant
Sameer Deshpande — Individual Investor
Presentation:
Operator
Good evening, ladies and gentlemen, I’m Filisiya the moderator for the conference call. Welcome to Avanti Feeds Limited Q3 FY ’25 Investors Conference Call. We have with us today Mr. C. Ramachandra Rao, Joint Managing Director; Mr. A. Sanjeev, Executive Director; Mr. Alluri Nikhilesh, Executive Director of Avanti Frozen Foods Private Limited. Mrs. Santhi Latha, GM Finance and Accounts; Ms. Lakshmi Sharma, Senior Manager, Corporate Affairs; Mr. D.V.S. Satyanarayana, CFO, Avanti Frozen Foods Private Limited.
As a reminder, all participant lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]
I would now like to hand over the floor to C. Ramachandra Rao, Joint Managing Director. Thank you and over to you, sir.
C. Ramachandra Rao — Joint Managing Director
Thank you, Filisiya. 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 statements for quarter ended financial year ’25. Mr. Venkata Sanjeev, Executive Director, Avanti Feeds; and Mr. Nikhilesh, Executive Director, Avanti Frozen have joined from the plants. Along with me are Mrs. Santhi Latha, GM, Finance and Accounts; Mr. D.V.S. Satyanarayana, CFO of Avanti Frozen Foods Private Limited and Mr K. Srinivas Reddy, CFO of Avanti Pet Care Private Limited.
To begin with, Mrs. Santhi Latha, GM, Finance and Accounts will present highlights of financial results for the period ended 31st December 2024 of division and also consolidated financials of the company for the same-period. Thereafter, Mr. D.V.S. Satyanarayana will present the financial highlights of shrim processing and export division. After that, Mr. Srinivas Reddy will give you the status of project as of as on-date. After presentation by all of them, we will take a question-and-answer session.
Santhi Latha — General Manager – Finance and Accounts
Thank you, sir. Good evening, everyone. Now I will take you through the consolidated and standalone financial performance highlights for the quarter and nine months ended 31st December 2024 FY24. Consolidated financial results for the quarter ended Q3 FY ’25. So the comparative performance of Q3 FY ’25 with that of Q2 FY ’25 and Q3 FY ’24 have been given in the presentation already circulated. Gross income in Q3 FY ’25 is INR1,405 crores as compared to INR1,397 crores in the previous quarter Q2 FY ’25, an increase by INR8 crores compared to Q3 FY ’24 gross income of INR1,287 crores, there is an increase of INR118 crores by 9.17%. The PBT is INR184 crores in Q3 FY ’25 as compared to INR162 crores in Q2 FY ’25, an increase of INR22 crores by 14% and compared to Q3 FY ’24 PBT of INR116 crores, there is an increase of INR68 crores by 59%. Comparison of performance for nine months ended December ’24 with nine months period ended December ’23.
In nine months FY ’25, the total income increased to INR4,343 crores from INR4,184 crores in nine months FY ’24. The PBT in nine months FY ’25 increased to INR526 crores from INR386 crores in the corresponding period of the previous year, mainly due to increase in revenue and decrease in raw-material costs and better overhead absorption. The consolidated results indicate net impact of several factors such as increase or decrease in income and expenditure relating to both feed and frozen divisions, which have been discussed in the following divisional performance individually. Standalone financial performance of feed division, Q3 FY ’25 results. The gross income for Q3 FY ’25 is INR1,077 crores as compared to INR1,118 crores in the previous quarter of Q2 FY ’25, a decrease of INR41 crores due to decrease in the quantity of fleets sold. The gross income in Q3 FY ’25 increased to INR1,077 crores from INR158 crores in the corresponding quarter of Q3 FY ’24 and increased by INR119 crores due to increase in sales quantity by 15,731 metric tons.
The PBT for Q3 FY ’25 is INR166 crores as compared to INR145 crores in Q2 FY ’25, an increase of INR21 crores, about 15%, mainly due to the increase in raw-material cost. The PBT in Q3 FY ’25 has increased by INR90 crores from INR76 crores in Q3 FY ’24, represented by 180%. So the feed sales decreased to 1,32,049 MTs in Q3 FY ’25 as compared to 1,34,897 in Q2 FY ’25 and 1,116,318 MT in Q3 FY ’25. Comparison of nine months performance of December ’24 and December ’23. In nine months FY ’25, the total income increased to INR3,493 crores from INR3,373 crores in nine months FY ’24 due to increase in-feed sales and other income. The PBT in nine months FY ’24 increased to INR465 crores from INR288 crores in the corresponding period of the previous year, mainly due to increase in sales and other income and decrease in raw-material costs and better overhead absorption. As you know, there are major raw-material prices are fish meal, soya bean meal and wheat flour.
The noticeable development in this quarter is softening of two major raw materials that are fish meal and soya bean meal prices resulting in improvement in the profitability. The prices of these raw materials keep fluctuating since their production is based on agriculture and fish patches from the ocean. The price of fish meal decreased in Q3 to INR93 per kg from INR1.5 per kg in Q2 FY ’25 and from INR128 in Q3 FY ’24. In case of soya me, their prices reduced to INR46 per kg in Q3 FY ’25 from 49 in Q2 FY ’25 and 53 in Q3 FY ’24. However, the wheat floor prices increased to 35 per kg in Q3 FY ’25 from 32 per kg in Q2 FY ’25 and 31 per kg in Q3 FY ’24. While on one-hand, the raw materials are instrumental in determining the margins, on the other hand, the status of aquaculture activity conditions such as climate changes, diseases, etc., determine the consumption of feed-in terms of volume, which will have an impact on the overall performance of the industry.
Favorable conditions supporting farmers to help make the farmers to reharvest from September the season up to December 2024, raising higher consumption of freed during Q3 FY ’25 compared to that corresponding period of the previous quarter year. To sum-up, in general, FY ’24-’25 was expected to be a challenging year for the aquaculture industry, both in respect of shrimp production as well as global demand for shrimp export. In-spite of the challenging conditions, your company had better capacity utilization. So the plants for 2025 and the shrimp freight consumption in 2024. On the basis of shrimp — estimated shrimp production of about 10.5 to 11 lakh metric tons of freed consumption is estimated in the year 2024. The company’s feed sales during the nine months FY ’25 is 4,225,537 MT as against 4,9689 MT in nine months period FY ’24. So shrimp processing and export. India seafood exports 17 lakh 81,6002 MT, an all-time high in volume during the fiscal year ’23-’24.
Frozen shrimp remained the major export item in quantity and value, accounting for a share of 40% in quantity and 60% of the total dollar earnings. The company’s shrimp exports during FY ’24 was 13,443 MTs as compared to 12,497 FY ’23 increased by 946 MTs. It is estimated that the exports during FY ’22 ’25 would be around 15,000 MT, an update of the fish feed plant. As-reported earlier, the company will import fish feed from Thai Union Feed Mill Limited and conduct trials of fish feed under Indian conditions. Once the product performance is approved and accepted in the market, the production in India will be taken-up for domestic sale of fish feed.
Now, I will hand over to Mr. D.V.S. Satyanarayana to present highlights of shrimp processing and export deep.
D.V.S. Satyanarayana — Chief Financial Officer, Avanti Frozen Foods Private Limited
Thank you, Madam. Good evening, everyone. Now I would like to take you through the financial highlights of Processing and Export division. Q3 FY ’25 results. The gross income for Q3 FY ’25 is INR328 crores as compared to INR284 crores in Q2 FY 2025, an increase by INR44 crores, representing 15% mainly due to increase in sales quantity by 420 metric tons, representing 12%. The gross income in Q3 FY ’25 decreased to INR328 crores from INR330 crores during Q3 FY 2024, a decrease of INR2 crores, representing 0.6% year-on-year. The sales volume during Q3 FY ’25 decreased to 3,843 metric ton from 3,990 metric ton in Q3 FY 2024, a decrease of 147 metric tons, although volumes decreased in Q3 FY ’25 compared to Q3 FY ’24, the sales value remained almost the same due to higher average selling price realization and favorable FX rates.
The profit before-tax for Q3 FY ’25 is INR18 crores as compared to INR43 crores in the last quarter, that is Q2 FY 2025, decreased by INR5 crore. The PBT decreased mainly due to increase in raw-material prices and also the ocean price rates. The PBT in Q3 FY ’25 is INR18 crores, a decrease from INR40 crores in the corresponding quarter, that is Q3 FY 2024, primarily due to increase in raw-material prices, impact of CVD, increase in washing price and also depreciation arise from the new plant. Comparison of performance of nine months ended 31st December 2024 with nine months ended 31st December 2023. The gross income for nine months during FY ’25 was INR855 crores as compared to INR820 crores in the corresponding Nine-Month period of previous year, that is FY 2024, an increase of INR35 crores in the gross income during nine months of FY ’25 is mainly due to increase in sales quantity by 428 metric tons, representing 4.3% growth. The PBT in nine months FY ’25 is INR68 crores as compared to INR104 crores in nine months FY 2024. A decrease in PBT by INR36 crores is mainly on account of CVD, increase in raw-material prices, higher ocean freight rates during the year and also new plant depreciation.
Now I hand over to Mr. Srinivas to update the status of project.
Srinivas Reddy — Chief Financial Officer, Avanti Pet Care Private Limited
Thank you, Mr. Satyanarayana. Good evening all. As you know, company has a global company in Thailand, a well-known pet food and pet scale product manufacturing company in Thailand for setting up a joint-venture company in India with an equity investment by them along with the transfer of technology. We are pleased to inform that PetCare has successfully commenced a trading in January 2025. It’s our first product range under the Avanti Pet Care brand, that is Avanti first starting with the catfood. This is a significant milestone in our strategy to enter a Indian pet food market as we have a plan to import a pet food product from the Blue Pell of Thailand till such time, Indian factory commence a production and sales.
Currently, our products are available in five cities in India, that is Mumbai,, Chennai, Bangalore and Hyderabad. And we are working diligently to expand our reach across the entire country, ensuring availability in-market in near the future. As informed in our earlier investor con-call, the company has purchased about 30 acres of planning to set-up the manufacturing facilities. The plan the planning for the state-of-art manufacturing facility in Hyderabad is in-progress.
Now I’m hand over into over to JMD sir for sharing a future outlook of the industry.
C. Ramachandra Rao — Joint Managing Director
Thank you Mr. Srinivas. Ladies and gentlemen, see, just I would like to give a brief of what is happening in this year, the — both shim culture as well as the shim processing and export. To start with, the season has started the first season, which is the major aquaculture season for India that is started from most end of middle of January and it is progressing really very well. So the climatic conditions and other factors have helped to the take-off very smoothly. And with the good farm gate prices, the farmers are very much interested to increase the area cultivation and also total, there will be — the we are expecting that the production will continue successfully throughout the first season without any.
As we see today, we do not have any major hurdle as far as the culture is concerned. So we expect that the production would be on the same levels as in the last year and maybe slightly about 5% more than what was in the last year. As regard the value-added processing, we move — as we move to value-added products, we see value-creation as not many competitors are focusing and people will have ready-to-eat as. However, the levy of CVD, which is at 5.77% now by US is an additional burden to the export of shrimps to US, which is the largest export market for the company. Keeping this factor-in view, the company — the endeavor of the company is to expand its global markets to other destinations like Japan, Korea, EU, Middle-East for which all efforts are being made by the company. So overall, the global market was Shim expected to be safe to stable in 2025 compared to ’24 maybe with a marginal increase by about 5%. The focus is on-demand for value-added products, which is gradually increasing and processes not see better margins in value-added products. The company is working with this objective to maintain its margin.
I think with this conclusion, I now we will take-up the questions from you. I think can start with the question-answer session.
Questions and Answers:
Operator
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from Nitin Awasthi from InCred Equities. Please go-ahead.
Nitin Awasthi
Hello, sir. Few questions from my side. Firstly, could you share the timeline for the pet food plant in Hyderabad?
C. Ramachandra Rao
Yeah, see, we are expecting that the land has been purchased and we are in the process of getting the approvals as survey and other things. And also we are in consultation with Bluefellow, Thailand. We are preparing the drawings of the factory and list of plant and machinery in the gas imported and other civil works, all these piling work is progressing. So once we start — we are expecting that by end of ’26, we should be able to come out with the our own production by end of December ’26.
Nitin Awasthi
Okay. Understood, sir. Sir, second thing I wanted to ask you was what is our total capacity as of now in the processing segment? And with all — because right now, if I’m not wrong, all our capacities have come on-stream, right?
C. Ramachandra Rao
Yes, which one you are saying process in processing. Yeah, I think in English, yeah. Please your question, Mr Nitin.
Nitin Awasthi
Yeah. So in the processing side, we were working on additional capacity. So if I’m not wrong, all our capacities are completely on-stream right now. So cumulatively, what would be our total capacity on the processing side?
C. Ramachandra Rao
Hi,, would you like to take this question?
A. Nikhilesh
Hi. Hi, Nitin. Right now, like we’re scaling up the production this a labor-intensive process. We have like over 2,000 workers working at these facilities, so we need to train them and everything. So I would say currently, during the season, they’re at full capacity off-season because there’s no raw-material during — it’s a very seasonal business, so we would say about 50%. Net-net through the year, we’re about 60% to 65% and this will be scaled-up to at least 80% in the next four to four to five quarters.
Nitin Awasthi
Understood. Could you give the number over your metric ton wise.
A. Nikhilesh
Yeah maybe like it’s a difficult number to give, Nitin because there are different products that we have like if you say like a tempura would require a lot more manpower and the production would be much slower. So maybe we can have a separate discussion if you send an email to give an exact number on the metric ton. It’s a lot of assumptions.
Nitin Awasthi
So I don’t — I agree with you or the nature of the industry and the variation in the product wouldn’t have an impact on the final output. I agree with that. Hence, even if you cannot give a number, if you can give a range, that would also work.
A. Nikhilesh
So we’re talking raw-material about 28,000 to 30,000 tons in the next four to five quarters. On the raw-material side, on the raw-material side. Okay. So of course, there’ll be deduction from this and the final product will be made depending on what product will correct additionally.
Nitin Awasthi
Okay. Understood. Understood. Sir, last question from my side. You had in the beginning of the call, there was a commentary in which the major raw materials used in the shrimp feeds that were discussed. So if you could just shed some light on the current on all the three products.
Santhi Latha
So the fish meal price is slightly going up, but is expected around INR96 to 97 and remains stable, whereas what we are worried about is the weak floor, but we are expecting the fresh crop So the weak flow is around INR36 rupees right now. We are expecting a fresh crop in March. So we are expecting it to little bit reduce. That is the only thing which has been increasing trend. Otherwise, the rest remain stable, right?
C. Ramachandra Rao
As you know, I may add to what said, but as you know that the fish meal is majorly dependent on the fish catches and also export market. These are the two criteria for the major pricing influencing factor. So we have been seeing that catches have been pretty good. And also the — because in-production in Chile and Peru, which are the major supply in countries of fish meal to the world, they are producing more and there is no demand for exports from India. So that is one of the reasons where the prices are looking more stable with maybe around INR100, we are expecting that it should be varying between INR95 to INR100 that’s what we are looking for as far as the fish meal is concerned.
As far as the — as rightly said by that we are worried about wheat because India has been producing substantial quantities of wheat. But however, the policy of the government to — for food security reasons, the — all the crop is being purchased by the FCI, by the government by making MSP, minimum support price and the have been given only a limited quota per building and making the floor and we are mostly the floor. So the prices of these plot are dependent of the pricing by the FCI. So earlier the policy of the government was that FCI was allowed to sell a portion of their total restock at our open-market sale. That was the policy that the government of India had given to the food corporation. But now the government has stopped that open sales and the entire production — the entire portion of which is being purchased by them. And we are hoping that the — somewhere in this — this year, the government may look for a portion of it to be for open sale, then we have — when the meat is available in the open-market, the prices are likely to be lesser compared to the FCI prices.
We’ll have to wait-and-see how the number-one, the total production, how much FCI policy to — for procurement on behalf of the government and what is going to be open sale. So this is one area where we are really worried. But we looked at — we’ll see that it should not go up normally, I think it should be around INR36 it should be 35 to INR40. It should be between that. But it’s really a bit of concern. And as far as the solar is concerned, we are pretty stable and we have been able to get the quantities. And as you know that our margins are mainly dependent on these raw materials and as long as we see good margins as long as the prices remain at this level. I think this answer will you — answer your question.
Nitin Awasthi
Yes, sir. Understood, sir. Thank you.
Operator
Thank you. Next question comes from Kamal Sharma, an Individual Investor. Please go-ahead.
Kamal Sharma
Yeah. Thanks, ma’am. Sir, my question is about the fish — sorry, the pet feet business. So earlier you had indicated that you will share the numbers related to the overall market size and maybe just to add-on that, do we have the visibility on what is the kind of revenue that we are targeting this business segment and kind of margins that we would get.
C. Ramachandra Rao
I think — you have or do you have yeah, are you having readily? I think we are also looking for it. We have the greater we can share with you. And you will read it out.
Santhi Latha
The pet population in India is around 40 million. So out of that dogs are 32 million, which is 80% and the cats are 8 million, which is 20%. The market size is expected to be around 50,000 million Indian rupees, growing at a 20% CAGR year-on-year, so it is expected to go between 15% to 20%. So the total market size is around INR2,21,000 or around to 3 lakh metric tons. So we are expecting to make a entry into the market. So we are as of not sure, but the market size is 3 lakh metric tons overall.
C. Ramachandra Rao
Can you throw some light on what is the present market situation and what are our objectives to get the entry into the market and whatever strategy that we are going to have.
Santhi Latha
Because on this 3 lakhs also 50% is an imported feed but more than 50% is imported feed.
C. Ramachandra Rao
Yeah.
Kamal Sharma
So as of now as Ms. Lata said, the market size has been increasing at 20%. We’ve just launched our cat food recently. It’s been a month. The acceptance of the cat food is very good. We are placing it in-stores in Mumbai, Hyderabad, Chennai, Bangalore. We are looking to further expand to the north of the country after consolidating in the south. And also we’re going to launch — we have only launched one flavor as of now and we’re going to launch a few more flavors in the coming months and also the dog food maybe by July. How much — how — what will be the turnovers and the revenue we have to look at after the first-six months because we are also very new to the market and just entering, we have to see the acceptance of the market and etc.
C. Ramachandra Rao
Yeah. I may add to what and just said that it is true that because we are the new entrants into the market and we are very confident that because the first launch has given us a very promising entry beginning. So we’ll be working on that. And gradually by July, we will get into the dog food also, which is exactly the volume-wise, which is higher, 80% total consumption of feed. So that is where the value comes from. And the — our endeavor is that our brand should be established before we start the production on our own that makes us much easier to get into the market at higher volumes that we are down the line by end of December — by end of ’26. That is what our target has been and we are very confident of it.
Kamal Sharma
And sir, does it offer a better margin than our other business lines? Or is it similar, lower? Yeah. What is the expectation?
C. Ramachandra Rao
Yes. Please go-ahead.
D.V.S. Satyanarayana
As of now, we are importing, so the margins would be lesser and also we are spending a lot on marketing. So as the volumes go up, the margins would go up, but as of now, the margins I think would remain low. We have to look at the first few months-to understand how much is the margin.
C. Ramachandra Rao
Okay. Yeah, the market is something like super stock is stock is retail retailers and although the chain is very, I know big, very long. So we have to see how much the total margins available, how much sharing among the stakeholders that we’ll have to see in there. We only as rightly told by Mr, only our experience in next six months or one year will get more clarity on that.
Kamal Sharma
Okay. Thanks. Thanks, sir.
Operator
Thank you. The next question comes from Palia from Clockwind Capital. Please go-ahead.
Unidentified Participant
Sir, thanks for taking my question. Sir, in the feed business, export is what percentage of sales as of now? And do you see scope to increase exports in the feed business going-forward in the next three to five years?
C. Ramachandra Rao
Yeah. The feed — the export to feed, we are making lot of efforts, they even to the Middle-East and we are exploring the markets there. So these are — see, there are Bangladesh, there is a little always some trouble state which is getting and Sri Lanka is like that. So initially we have a very good response from Bangladesh, but still simultaneously we have in Middle-East also, we should be able to increase our export sales and they are giving good results there. Can you throw more light on this export to our Middle-East.
Unidentified Participant
So we’ve already importing a bit to the Middle-East and we have gotten good results. We are searching for new partners. We are getting a lot of inquiries that for the feed, I think will start increasing in the coming year. So what are exports as a percentage of volumes in the feed businesses at what level as of now?
Unidentified Participant
As of now I take around 1% to 2%, okay. Got it. And any target you have there to increase this number to some level in the next three to five years?
Santhi Latha
Yeah, around 10% we would like to reach.
Unidentified Participant
Okay. Got it. And sir, could you also throw light on what’s — what has been happening in Ecuador you know and what’s your sense on whether they will keep on increasing production or there are some, let’s say, issues there on-the-ground on you on account of which we expect that the production is going to be a little bit subdued in the next year or so.
A. Nikhilesh
Yeah,, hi. So right now, Ecuador is by the largest producers of you say on raw-material basis but however, India and Ecuador differ in the products that we offer. We specialise in-field and cut material, whereas Equidor specializes in head-on and headless material. So when we go into India is moving more into value-added products and you will see that happening in the next two, three years that produces more value-added products and gets on to the map. Where Ecuador because of the limitation of population, their population is about 20 million, if I’m not wrong, whereas India is INR1.5 billion. So then they just don’t have enough of the force to do value-added and field and cut material. Even though they do a small quantity, that’s not a bulk of their production.
D.V.S. Satyanarayana
So the answer to my question was not on the shrimp processing business. My question was on just the shrimp production part that also. How do you — so the shrimp production scenario in Ecuador as of now? It’s quite stable right now. They won’t be like increasing scaling up their production like 30%, 40% like they were doing in the past. So we have to see what will happen. But I think it’s going to be a fairly stable year for them and not much increases.
Unidentified Participant
Got it. Got it, sir. And sir, also could you tell us when is your fish feed plant coming online and what are your — what kind of investments have gone and what kind of peak turnover can that plant produced?
A. Nikhilesh
As of now, we just started going to start our trials so after the trials are done they are going to t plan the investment into the plant.
Unidentified Participant
Okay. So there is no formal investment proposal for putting a plant on-the-ground as of now. We’re just testing the market. That’s it.
A. Nikhilesh
So we’re testing the feeds or testing the seeds or we’re importing the feed from Thailand and testing it so we are testing the results.
C. Ramachandra Rao
Yeah, that is acceptance and adoptability of the feed from to Indian and culture. So only once we get — once we get a foolproof because there are many spaces also. It’s not one. Am I right when they say there are other spaces also, we have to nearly identify which feed, which species are going to be more profitable, more than more in-demand and there’s a lot of work that is going on that front to see that the fish feed really, you know when we started, it should make a very successful project. That is where our endeavor is that we are working for that, where in fact, some samples have already come and we are now — we want to start as soon as possible.
Unidentified Participant
So once this testing process will be complete, then you would think about what kind of you want to put into this business.
C. Ramachandra Rao
Exactly. So we have identified certain fish culture farms and which are different species and we are trying to test the fields of different types for each of these them. Over a period, we will see the results and how it is in cost results, what is the benefit that is going to come. All these factors have to be taken into consideration. An estimate of the market also is required to be did, what pricing compared to the local prices that feed manufacturers are offering. So all these aspects we are working on that. And when we come out, we should come out with a good feed where the farmer gets a benefit out of it. That is the work which we are doing on now.
Unidentified Participant
Got it, sir. Thanks a lot, sir. That’s all sir.
Operator
Thank you. Next question comes from Mitsun from Advisors. Please go-ahead.
Unidentified Participant
Just wanted to understand on the pet food division, you mentioned that right now we are importing and selling in the market. What brand is this under? And when do you expect the food plant to be ready? And how much of that will be used for domestic and exports?
C. Ramachandra Rao
The first question I it, can you come back on that? The plant to which we are expecting this will be ready by end of ’26 — December ’26 where the project will be — we are working for that. It will be completed by ’26 and start December ’26 and commercial production will start then. But the first question which you asked, I didn’t get it.
Unidentified Participant
I just wanted to understand what is the brand under which we started.
Operator
Okay, I’m sorry to interest hello your participants kindly stay connected while we connect Mister Sanjeep on the call sorry, the line, sir.
D.V.S. Satyanarayana
The brand-name is first will be launched the food has already been launched and the dog will also be launched on the same name.
C. Ramachandra Rao
Okay and just wanted to understand this plant that you are putting up is for how much capacity. What is the metric ton we are working on those details because we want to see what type of feed, how it should be — how much capacity depending upon the market. So what — what is the optimum capacity, what we can produce and what type of machinery and all those things we are working on that. Maybe next year it will take about minimum like 60 to six months-to come to complete you know numbers on that. So — and we have started just now the cat. We will also see the market reaction, how much we are able to take and all these things, what is the requirements and then we decide what is the numbers because there are already well-established placements in the market. So we need to compete with them. So these are — it will take some time to give you the numbers.
Unidentified Participant
And sir, that’s not the pet food plant, that is mainly for the domestic youth itself. We will not export it is —
C. Ramachandra Rao
It is for the present, it is only for domestic market because as just now my colleague told, so there is a lot of demand for pet food in India itself. There is the growth of pet population and also the demand for feed ready-made food that we are giving it. So the — I think we need to have — need to concentrate more on the domestic market now and establish ourselves that we can think of exports. As of now, we don’t have plans to export.
Unidentified Participant
Got it. And during the nine months, we’ve seen good margins on the shrimp feed business because the shrimp processing business has not remained under pressure. So just wanted to understand what is the outlook for the coming year?
C. Ramachandra Rao
See that I think I made this remark in my earlier question that the margin mainly depends on the raw-material prices. We have seen that. I think more. If you look at our track-record for even nearly past three, four years, we have seen that the prices going up-and-coming down because of the raw materials. So the raw materials really have softened and the — it is now like fishmeal and soyal, these prices are good because all the three products, fishmeal, soya and wheat flower constitute the major portion of the raw-material If the raw materials where the prices are stable, we continue to maintain the percentage. Maybe it is ranging from maybe 7% to 10%, we keep our margins. It all depends on how the raw-material prices are.
Unidentified Participant
And some are more on the processing side, we’ve averaged between 13% to 15%, but I think this year nine months, we are at 11%. So just — yeah, just wanted to get a sense on that part of the business. I’ve seen on the shrimp speed side, you’ve seen —
A. Nikhilesh
I’ll answer that question. So see, the duty, the that was imposed by the US government, it’s a new duty, right? If you remove that duty, I think it’s that benefits the margin to move-up. So that’s a important factor, but this duty is periodically reviewed where we give our arguments to the US Department of Commerce, etc. And it’s usually like in the past, we’ve seen that they revise it depending on the quality of information given and it includes the government, the association, the different stakeholders, etc. So in the short-term, even though it’s — there is a margin pressure in the long-term, this will slowly stabilize, point number-one. And point two, see like price increase is a gradual process, the price transfer into the consumer. It doesn’t happen overnight. So slowly the price transfer to the consumer is happening. We can see that by higher — like higher prices in the US market and buying levels at a higher price currently. So this is a slow step-by-step process. So short-term, there might be pressure, but long-term again it’s going to be again stabilized and get back to normal.
Unidentified Participant
Great. And just my last question is just on the feed, the production and sales. We’ve been offering from FY ’18 about INR4 lakh30,000 to now 5 lakh30,000 in FY ’22 was 5 lakh30. I’m just trying to understand what is the kind of growth that one can envisage over the next three, four years. Is it going to be little cyclical up-and-down or is it going to be at least a high single-digit growth on a year-on-year basis?
C. Ramachandra Rao
See, I think there are several factors to answer this question. What is that the basic thing is the area of culture on the year-on-year basis. So once the area of culture increases, automatically the freight consumption also increases. That is number-one. Number two, even in the culture also, it is not necessary that every farmer who has a farm, the bond will go for culture. It depends upon the market price, what is the farm gate price? And the third one is the climatic conditions which will have a great influence on the culture. So see the — there is always these factors keep the entire agroculture activity in more or less the same level stable with 5% to 10% up-and-down.
We will not be a serious — I mean the big jump of 20%, 25% year-on-year basis. It will be stable because the India is more or less the stable and the climate collections keep changing and the market prices are volatile. All these things into consideration, we do not exactly say that this is going to be the trend, which is going to increase. And as Mr said, the global market is also there. So with this practice, we’ll actually rather work influence the total production of the shrimp fleet in the country year-on-year basis. So we normally expect see the next year, we are expecting about a 5% or 10% increase that because this year the culture is good, the prices are good. So this year we are expecting that it will be better by 5% than last year. That is how the projections and okay.
Unidentified Participant
Right, sir. So I’m just trying to say longer-term for the company as a growth driver, obviously, just these businesses of shrimp processing and shrimp feed will be stable, would the growth driver be your pet food and the fish speed foray that you’re looking to enter, those would be the growth drivers.
C. Ramachandra Rao
The philosophy of the company is that we should focus more on the areas where we have — we are strong, like organic growth, let us say, feed, feed related food processing, these are the areas where we have lot of experience, expertise and good collaborators with us so that like Thai Union, which can in association with them, we can only grow in these areas. For example, in the marine products, we have already the export market, value-added products, we are increasing on that front. And simultaneously, we are also working on the domestic market and this is going to be a very good business, but it requires a lot of work because it has to be on par with the pricing levels in the local markets. So it is our endeavor to keep on these things expanding and also pet is another very big and very good area where we can really achieve because we have the experience in our dealership network or in the field manufacturing and raw-material, economies of raw-material, all these factors go a long way in really strengthening the pet food also. So I think fish feed, pet food, then the domestic market will be the future growth drivers for us to — so that we can strengthen our value to the company and shareholders, of course. Thank you.
Operator
Thank you. [Operator Instructions] Next question comes from Sameer Deshpande, an Individual Investor. Please go-ahead.
Sameer Deshpande
Hello, sir, congratulations for the excellent results. And from your commentary, it seems the outlook seems to be good for the coming quarter and the next year also based on the current raw-material prices and the culture season which has become on a good note. So I wanted to know what is the exports as a percentage of our sales because last year we had INR5,500 crores of revenues. So total exports were how much that?
C. Ramachandra Rao
20% will be the export.
Sameer Deshpande
And out-of-the USA continues to be a large market for us about 70% of that.
C. Ramachandra Rao
Yes, yes.
Sameer Deshpande
And so as you mentioned that this counterwheeling duty, which was labeled on our Indian product was higher. So currently the margins may be under a bit of a pressure in the short-run of till the prices improve in the US market or we are in a position to reduce our costs by some means. Is it correct?
C. Ramachandra Rao
Can you answer this question, please?
A. Nikhilesh
Yeah. There are two things that we’re doing. First, we’re reducing and try to optimize our costs that process has already started. Yeah, that’s point number-one. Apart from our general cost optimization efforts like we’re putting it as one of our main goals for this year. Second, we are concentrating on higher-value products, which don’t attract PVC. So those are — that is the second. We’ve always told in the past several quarters that value-added products is what we’re focusing on. So that’s what we’re doing right now. So to mitigate that risk. And the third one is also that we’re focusing on other markets. In the past, we used to have a lot more focus into us but now we’re looking a lot more into other markets as well. And we can see it over the past few quarters that the US market share has been coming down slowly from what it was averaged in the previous years. So those are concentrating exactly.
C. Ramachandra Rao
Europe and Europe and Middle east and etc which you mentioned.
A. Nikhilesh
Exactly. In Asia.
Sameer Deshpande
Yeah. Okay. And the custom duty in the budget was reduced on two products significantly from 30 to 5% or 15 to 5%. Does it help us in any way reducing our raw material cost?
C. Ramachandra Rao
As you referring to the raw materials. But the raw materials did really affect not much because the effect was in fact the reduced reduction of customs duty on feed import is actually a disadvantage for us because the 15% to 5% reduction. So the imported feed competition will go up. So in fact we have made a representation to the government because India has more than adequate the capacity to produce shrimp feed so much, much more than five, six times annual consumption. We have got the production capacity. We told them that there is no need and already most of the foreign companies which are known for this feed are already present in India and so they are already producing the feed and supplying to the market. So we need not have to import and at a concessional rate the prices which we have brought to the notice of the government. It will take its own time to realize that and take corrective action. As far as the sum, most of the products, raw materials nowadays we have started when we are using domestically and very limited items are being imported. We have got good fish meal, good fish oil, good fish lipid oil. We have got mineral, vitamins and premixes. Everything is available in India now. So there is not much of imports involved and it does not really make much difference by reducing the duties on that.
Sameer Deshpande
Okay, can I ask a last question? It is regarding this PLR benefits which we have been receiving. So did we receive anything in this quarter and were it likely to be anything in the coming quarter also?
A. Nikhilesh
Yeah. Second and, and if we’ll. So PLA is not a quarterly benefit. Basically it is an annual incentive which is given by the government on incremental sales as per the guidelines of P&L. For the last financial year we have filed the application with the government. It is under review so which is being expected to be released in. In the month of April 2025.
Sameer Deshpande
April ’25. So it is not likely to receive received in this year. And is it quite substantial, around 2030 or 2030 crores?
A. Nikhilesh
No, no, it is not substantial.
Operator
Thank you. [Operator Instructions] Next question comes from Sachin Paul from MC Research. Please go ahead.
Unidentified Participant
Yeah, hi sir. I just wanted to understand what’s the scenario….
Operator
Your voice is not audible so I request to speak it louder.
Unidentified Participant
Yes, so I was saying that I just wanted to understand what’s the outlook on the production as well as the farm gate sizes on the domestic. So since you’ve had a pickup, we had a slow start in terms of shrimp feed volumes in Q1 and that has kind of picked up a 14% growth in feed volumes in Q3. So how does that translate into probably the farm gate prices and the production on the domestic front.
C. Ramachandra Rao
See, we are expecting that 2025 should be a stable year without much, at least for the first crop. Our expectation that it should go on smoothly because the farm grade prices are as of now, it’s good and the feed prices are also good and the climatic conditions are also good. They are able to really go on stocking very, I mean aggressively in the last one month. So we expect that the first crop which will go up to June, July will be very good. That’s what we are expectation. But of course always with a reasoning that anything can happen. Like climatic conditions may change, farm gate prices may change. But by and large we see that first crop will be very good. And if the same levels of prices are maintained, even the second crop also will be good total making the year 2025 definitely stable than last year and maybe slightly more than last year.
Sameer Deshpande
Okay, okay. Could we see some softening on farmland domestic consumption?
Santhi Latha
Your voice is again breaking.
Unidentified Participant
I was saying that should we see some softening of the prices on this farm gate side since that the volumes are picked up on the shrimp feed side.
C. Ramachandra Rao
So it is very difficult, I think Nikhilesh.
A. Nikhilesh
Could you repeat the question?
Unidentified Participant
Could there be some softening of the farm gate prices since feed volumes are picking up and the overall production levels are anticipating to pick up in the next three to six months?
A. Nikhilesh
We don’t have any, we. We don’t anticipate any major price decrease. Our policy as a company is to ensure that the farmer gets a fair price and we sell at a fair price at the market as well. So we don’t anticipate any large price decrease that the farm gets.
Unidentified Participant
Okay, understood. And the second thing is again the shrimp processing side, we’ve had a spike in these trade for internationally. So how is that shifting? I’m sorry, I’m not able to hear you. I was saying that on the shrimp processing side the margins have been impacted by higher state courts. So how have they been trending recently considering that there were some opening of the Suez Canal and there have been some reduction in the freight internationally.
A. Nikhilesh
So I don’t think still there’s large number of shipments passing through the Red Sea Suez Canal area. The prices are still firm, but we hope to get a lower reduction this year when things normalize. You know, like the Middle east has been quite turbulent the last year with the Israel war and everything. So nothing really changed in that part. But we hope that this year the price has been softer on the freight. Okay, and what would be the freight cost as a percentage?
Operator
Your voice is not audible, sir.
Unidentified Participant
What would you say cost as a percentage at this point of time?
A. Nikhilesh
Do you want to answer that, D.V.S?
D.V.S. Satyanarayana
Yes, it is around 8% to 9%.
Unidentified Participant
Okay, sir. Thank you so much.
Operator
Thank you. The last question of day comes from Tom from Jyot Nanshu. Please go ahead.
Unidentified Participant
Hello. Regarding the pet food, do we have any planned capex and what is the total capex already done or what is the planned capex for FY2526 capex.
C. Ramachandra Rao
So capex, we have already incurred a land purchase about around 36 crores. Further the plant and missionary will be around 60 crores. The major expenditure so far has been on the land. We have acquired about 30 acres of land near Hyderabad. So we have bought the land and we’re now getting it surveyed and all those things are happening. But the work of preparing the drawings and civil work, planted machinery, imported and domestic machinery, all these details are being worked out in consultation with the Bluefellow Limited Thailand. So it will take some time to give the exact numbers as to the cost. What is going to be the cost of the project? How much is the civil works, how much is it in other units, other utility buildings, all these things. I think it will take at least four, three, four months for us to come to a definitive numbers there. Projected numbers we’ll be able to share with you maybe next or after that quarter meeting.
Unidentified Participant
Okay. Okay. And one more question was regarding the cbd. You had mentioned that some higher value products will not attract cbd. Is it RTE products?
C. Ramachandra Rao
Nikhilesh?
A. Nikhilesh
No, it’s not RT products per se, but it’s a higher value product. Like value added products like ready to fry, something like that. Yeah. See it’s value added products is the category, right? Like you look at breaded shrimp or like something like a tempura or something like that. It’s not just commodity, it’s value added.
Unidentified Participant
Okay. Okay. Thank you.
Operator
[Operator Closing Remarks]