Q1 2027 Apex Frozen Foods Ltd Earnings Call Transcript
Key Points
- Average shrimp realization grew 15% year-on-year to INR930 per kilo, driven by improving global shrimp prices and a favorable USD-INR conversion rate.
- EBITDA increased 79% year-on-year to INR33 crores, with EBITDA margin expanding to 12.7% from 7.1% in Q1 FY26.
- Profit after tax surged 138% year-on-year to INR22 crores, with PAT margin improving to 8.4% from 3.5%.
- Shrimp sales to the USA increased 13% year-on-year and 121% quarter-on-quarter, supported by easing tariff-related uncertainties.
- The company maintains a lean financial profile with prudently managed debt levels and a focus on disciplined working capital management.
- The company is expanding its product mix with a higher share of value-added products (RTE), which garners higher realizations and margins, with RTE realization improving to $12.05 per kilo.
- The order book is strong, with orders booked through the middle of Q3, indicating robust demand visibility.
- The company has initiated business in Japan, a market it had not served for over a decade, and expects to start shipments to Russia in Q2 or Q3.
- The UK-India FTA, effective July 15, 2026, is expected to boost volumes, with the EU FTA anticipated by end of 2026 or early 2027.
- Farm gate prices have remained stable, providing comfort to farmers and supporting the company's cost structure.
- Total shrimp sales volumes declined to 2,624 metric tons in Q1 FY27 from 3,015 metric tons in Q1 FY26, impacted by labor shortages and war-led transportation disruptions.
- Sales to the EU and UK were negatively impacted during the quarter due to war-led transportation disruptions and regulatory testing/certification requirements at origin in India.
- Freight costs have more than doubled compared to Q4 of last year due to war-led disruptions, posing a margin risk.
- Farm gate prices are beginning to rise, which could pressure margins if not offset by higher realizations.
- The company faces uncertainty regarding potential refunds of US tariffs paid earlier, with no clarity on timing or amount.
- Capacity utilization remains low at around 38-39%, and the company expects to maintain only 35-40% utilization through the year, limiting growth potential.
- The company has not yet received any refunds of US tariffs, and the outcome of CVD and ADD reviews is uncertain, with potential for increases.
- Labor shortages in April and May led to production setbacks, impacting Q1 volumes.
- The company's guidance for FY27 volumes is around 12,000 metric tons, which is conservative and may not fully capitalize on improving market conditions.
- The realization increase is partly due to a depreciating rupee, which may not be sustainable if currency strengthens.
Ladies and gentlemen, good day, and welcome to the Apex Frozen Foods Limited Q1 and FY27 earnings conference call. (Operator Instructions)
I now hand the conference over to Mr. Hrithik Hattiangadi from Stellar IR Advisors. Thank you, and over to you, Hrithik.
Thank you. Good morning, everyone, and thank you for joining us today. We have with us today the senior management team of Apex Frozen Foods Limited, Mr. Karuturi Chowdary, Managing Director and Chief Financial Officer; and Mr. Durga Prasad, Senior Manager Accounts, who will represent Apex Frozen Foods on the call. The management will be sharing the key operating and financial highlights for the quarter ended June 30, 2026, followed by a question-and-answer session.
Please note that this call may contain some of the forward-looking statements, which are completely based upon the company's beliefs, opinions, and expectations as of today. These statements are not a guarantee of the company's future performance and involve
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