Avanti Feeds Ltd Management Discussions

Caveat

This section of the Annual Report has been prepared in accordance with the spirit of Corporate Governance requirements prescribed by the Securities and Exchange Board of India ("SEBI"). The discussion herein reflects the Managements perception of the Companys operating environment, industry developments, opportunities, risks, performance, and outlook as at the date of this report. Statements made in this section may include forward-looking views based on current assumptions and available information. Actual results may differ materially due to changes in economic conditions, trade policies, tariffs, input costs, foreign exchange rates, geopolitical developments, climatic conditions, disease outbreaks, logistics disruptions, and other external factors. The Company undertakes no obligation to publicly update or revise these statements, except as may be required under applicable laws.

Global Economy

The global economy in FY 2025-26 demonstrated unexpected resilience in the face of persistent trade tensions, heightened policy uncertainty, and intensifying geopolitical risks. The IMF projected global growth at 3.1% in 2026 and 3.2% in 2027 (market-exchange-rate basis), reflecting moderate expansion but below pre-pandemic trends. The World Bank projected global growth to ease to 2.6% in 2026 before recovering to 2.7% in 2027.

The dominant feature of the FY 2025-26 macro-economic landscape was the sweeping recalibration of global trade policy by the United States, which announced an across-the-board reciprocal tariff structure in April 2025 and subsequently raised tariffs on Indian goods to 50% from 27th August 2025 (a 25% baseline plus an additional 25% penal duty linked to Indias purchases of Russian crude oil). The tariff regime was challenged in U.S. courts, and on 20th February 2026 the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorise the U.S. President to impose tariffs on imports. Separately, on 2nd February 2026, the U.S. and India concluded a bilateral trade understanding under which the reciprocal tariff on Indian goods was reduced from 50% to 18%.

Alongside the tariff disruption, escalating geopolitical tensions in West Asia resulted in continued disruption to the Red Sea–Suez Canal shipping corridor. Ocean freight rates, container availability, transit times, and marine insurance premiums all remained volatile through the year. For perishable cargo such as frozen seafood, this translated into extended lead times, elevated cold-chain costs, and more complex logistics planning at destination markets. However, demand for quality seafood and protein-rich food products continued to remain structurally relevant across developed and emerging markets.

Global Economy Vs Indian Economy

Compared with several advanced economies, India continued to remain one of the more resilient and fastest-growing major economies globally. The World Bank and the IMF both noted India as the fastest-growing large economy, supported by strong domestic consumption, sustained public investment, digital adoption, infrastructure development, and a stable financial system. The Ministry of Statistics and Programme Implementation (MoSPI) estimated Indias real GDP growth at around 7.4% for FY 2025-26 and the projected growth for FY 2026-27 is from 5.7% to 6.9%. The S&P sovereign rating upgrade in August 2025 — Indias first in 18 years — reinforced confidence in Indias macroeconomic trajectory.

Indias relatively strong macroeconomic position supported sectors linked to consumption, agriculture, food processing, and exports. However, the economy also remained exposed to external risks, including crude oil volatility, geopolitical developments, global trade barriers, currency movements, and weather-related uncertainty. For the seafood sector, Indias long coastline, established farming base, processing capabilities, skilled manpower, and export infrastructure continue to provide a strong structural foundation, while tariff exposure in key markets and logistics disruptions underline the need for diversification, value addition, and operational efficiency.

Salient Features of the Indian Economy

• Fast-growing major economy: India continues to remain among the fastest-growing large economies, supported by consumption, services, infrastructure, and public investment.

• Strong domestic demand: Rising income levels, urbanisation, and consumption growth continue to support domestic market expansion.

• Infrastructure development: Investments in roads, ports, cold chains, logistics, and digital infrastructure are strengthening the competitiveness of manufacturing and export-linked sectors.

• Landmark trade agreements: FY 2025-26 saw the conclusion of the India-EU Free Trade Agreement (27th January 2026) and the India-UK CETA, which provides 100% duty-free access for most Indian seafood products. The India-US tariff understanding of 2nd February 2026 reduced the reciprocal tariff from 50% to 18%.

• Export diversification: India achieved record seafood exports in FY 2025-26, supported by the industrys active diversification into the European Union, South East Asia, Japan and other non-U.S. destinations.

• Policy support: Government schemes such as the Pradhan Mantri Matsya Sampada Yojana and the Export Promotion Mission (Rs. 25,000 crore, announced 12th November 2025) continue to support fisheries, aquaculture infrastructure, and exports.

Global Aquaculture and Seafood Industry Overview

The global aquaculture and seafood industry passed through a year of transition. Demand conditions improved gradually after a period of subdued consumption, but recovery remained uneven across regions. Trade policy changes, tariff uncertainty, shipping disruptions, freight volatility, and geopolitical tensions influenced global seafood flows.

The most significant structural development in the global shrimp market during the year was the moderation of Ecuadors aggressive pricing. Ecuador, which had long maintained a cost advantage built on fiscal subsidies — including on electricity, tax waivers, and preferential financing – saw this advantage erode following fiscal corrections. For the first time in nearly four years, farmgate prices between Ecuador and India converged, materially improving pricing discipline across the global shrimp market and supporting better realisation prospects for Indian exporters.

Demand from markets such as Europe, Japan, Korea, and other non-U.S. destinations gained increasing importance. Market diversification became a critical priority for shrimp exporters globally. The year reinforced the importance of supply chain agility, cost discipline, quality assurance, traceability, and value-added product capabilities.

Aquaculture and Seafood Sector – Indian Scenario

India remains one of the leading players in global seafood exports, with frozen shrimp continuing to be the dominant product category. According to final data released by the Marine Products Export Development Authority (MPEDA), Indias seafood exports touched a record Rs. 73,890.46 crore (US$ 8.46 billion) in FY 2025-26, with shipments of 19.72 lakh metric tonnes. Frozen shrimp remained the leading export item, contributing Rs. 49,037.93 crore (US$ 5,624.48 million), accounting for 40.19% of export quantity and 66.52% of export earnings in dollar terms. Frozen shrimp exports stood at 7,92,647 metric tonnes in FY 2025-26, registering growth of 13.16% in rupee value and 8.64% in dollar value over the previous year.

Despite the strong long-term opportunity, the sector faced multiple challenges during the year — including U.S. tariff uncertainty, increased raw material costs, disruptions in West Asian shipping routes, higher logistics costs, freight volatility, and changing buying behaviour in global markets. However, Indias structural advantages remained intact: a large farming base, established processing capacities, skilled manpower, cost competitiveness, technical know-how, and growing focus on traceability and sustainability.

The following table sets out Indias seafood and frozen shrimp exports over the past six years:

Exports during the Year	Total Seafood (MT)	Value (Rs. crore)	Frozen Shrimp (MT)	Value (Rs. crore)
2025-26	19,72,000	73,890.46	7,92,647	49,037.93
2024-25	16,98,170	62,408.45	7,41,529	43,334.25
2023-24	17,81,602	60,523.89	7,16,004	40,013.54
2022-23	17,35,286	63,969.14	7,11,099	43,135.58
2021-22	13,69,264	57,586.48	7,28,123	42,706.04
2020-21	11,49,510	43,720.98	5,90,275	32,520.29

Company Overview and Performance

FY 2025-26 was a year of changing tides for Avanti Feeds Limited. The Company operated in an environment shaped by tariff uncertainty, evolving global demand patterns, geopolitical disruptions, higher raw material costs, and logistics-related challenges. Despite these headwinds, Avanti delivered a resilient performance, supported by its integrated business model, strong farmer relationships, diversified operations, and focus on value-added growth.

On a consolidated basis, revenue from operations increased to Rs. 6,065.86 crore in FY 2025-26 from Rs. 5,598.69 crore in FY 2024-25, reflecting growth of 8.34%. Total revenue from continuing and discontinued operations stood at Rs. 6,278.89 crore compared with Rs. 5,765.80 crore in the previous year, a growth of 8.90%. Profit Before Tax from continuing operations (after exceptional item) increased to Rs. 880.27 crore from Rs. 737.26 crore, a growth of 19.40%. Net Profit from continuing and discontinued operations stood at Rs. 656.80 crore compared with Rs. 557.05 crore in FY 2024-25. Basic Earnings Per Share (continuing and discontinued operations combined) improved to Rs. 44.48 from Rs. 38.81.

The year also saw a significant improvement in the performance of the Processed Shrimp segment, which delivered strong revenue and profit growth supported by improved realisations, favourable foreign exchange movements, an improved product mix, and better operating conditions. The Shrimp Feed business remained broadly stable in revenue terms while improving profitability. The Board has recommended a dividend of Rs. 10 per equity share of face value Re. 1 each, subject to approval of shareholders.

Segment-wise Performance

Shrimp Feed Division

The Shrimp Feed Division continued to be the largest contributor to the Companys business. On a consolidated basis, segment revenue stood at Rs. 4,366.81 crore in FY 2025-26 compared with Rs. 4,397.67 crore in FY 2024-25, a marginal decline of 0.70%, attributable to a price reduction of Rs. 4 per kg implemented in April 2025 in support of farmer economics. Segment results improved to Rs. 558.54 crore from Rs. 527.02 crore, reflecting growth of 5.98%. Segment margin improved from 11.98% to 12.79%.

The feed business faced pressure from rising raw material costs through the year. The Company managed this environment through weighted-average inventory management, operating discipline, and sustained farmer engagement. The feed divisions PBT margin for FY 2025-26 stood at 15.50% compared with 14.34% in FY 2024-25, supported by the fuller impact of stabilised raw material prices through most of the year. Feed volumes increased to 5,62,060 MT in FY 2025-26 from 5,55,248 MT in FY 2024-25.

Avanti reinforced its position in the shrimp feed market through consistent feed quality, field-level technical support, farmer advisory services, disease management guidance, and strong distribution reach. The Companys estimated market share remains approximately 51% to 53% of the Indian shrimp feed market. During the Q2 monsoon period, heavy and untimely rainfall in key shrimp-producing regions caused premature harvest and localised disease outbreaks; the Companys technical teams worked closely with affected farmers on remedial measures, and cultivation activity recovered through the latter part of the year.

Processed Shrimp Division

The Processed Shrimp Division — operated through the Companys subsidiary, Avanti Frozen Foods Private Limited (AFFPL) — delivered a strong performance in FY 2025-26. On a consolidated basis, segment revenue increased to Rs. 1,689.46 crore from Rs. 1,180.27 crore, registering growth of 43.14%. Segment results increased to Rs. 128.25 crore from Rs. 48.61 crore, a growth of 163.81%. Segment margin improved from 4.12% to 7.59%.

This performance was driven by improved price realisations, favourable foreign exchange movements, growth in value-added products, better product mix, improved operating leverage, and the Companys success in passing on the reciprocal tariff cost to U.S. customers during the peak duty period. The performance validated the Companys strategic focus on value-added products and market diversification. During the year, Avanti continued to expand its customer relationships across Japan, Europe, Canada, Korea, the Middle East, and domestic markets, while maintaining its presence in the U.S. This calibrated diversification helped reduce concentration risk and aligned the business with a broader demand base. The Companys shrimp export volumes grew to 16,976 MT in FY 2025-26 from 14,149 MT in FY 2024-25, an increase of 2,827 MT. The Divisions installed processing capacity is approximately 26,000–28,000 MT per annum, and the strategic focus for FY 2026-27 is on improving capacity utilisation and expanding value-added product offerings rather than incremental capacity addition.

Further, the shrimp processing plant at Gopalapuram, Andhra Pradesh, has been renovated with state-of-the-art machinery and modern processing systems. These upgrades are expected to enhance operational efficiency, improve product quality, and strengthen the Companys manufacturing capabilities.

Despite ongoing geopolitical challenges, the Company continues to maintain a strong order book, driven by the superior quality and diverse range of its product portfolio. Encouraged by robust demand, the Company is also focused on increasing capacity utilisation during FY 2026–27 to meet the growing demand and support its future growth plans.

Shrimp Hatchery Division

The Shrimp Hatchery segment — reported as a separate segment in FY 2025-26 — recorded revenue of Rs. 12.46 crore compared with Rs. 21.68 crore in FY 2024-25. The segment reported a loss of Rs. 5.52 crore against a profit of Rs. 3.13 crore in the previous year. The performance was affected by challenging market conditions and subdued activity in the segment. The Company continues to monitor the business environment and will take suitable steps to improve performance through better productivity, brood-stock management, and cost efficiency.

Strategic Diversification Initiatives

Value-added Products

Value-added products emerged as a key strategic focus area during the year. The strong growth in Processed Shrimp segment revenue and profitability reflects the increasing importance of moving up the value chain. Value-added products support better realisations, improved customer stickiness, reduced commodity exposure, improved margin resilience, and stronger market positioning. The Company continues to expand its value-added offerings across suitable export markets, supported by its processing capabilities, customer relationships, and quality systems.

Pet Care Segment

The Companys entry into the pet care segment represents a significant strategic extension of its core expertise in nutrition, sourcing, processing, and quality management. Through Avanti Pet Care Private Limited, a subsidiary established in joint venture with Bluefalo Petcare Co. Ltd., Thailand, the Company is entering a fast-growing domestic consumer category aligned with rising pet ownership, urbanisation, and increasing willingness to spend on pet nutrition.

The Company has initiated market development under the "Avant Furst" brand. Cat food (Ocean Fish and Tuna flavours) and dog food (chicken and vegetable flavour) have been introduced in the market. Distribution coverage has expanded to 31 distributors across 13 cities, with the Company progressively entering Tier-2 and Tier-3 markets. E-commerce channels including Amazon and Supertails supplement the distribution network. Revenue scaled progressively through the year, with Q4 FY26 sales reaching Rs. 151 lakhs, up from Rs. 136 lakhs in Q3 FY26, reflecting growing product acceptance. Production volumes have ramped from approximately 53 MT to 100 MT and are targeted at approximately 800 MT by end of FY 2026-27. Products are currently sourced from Thailand in accordance with the Companys own formulations and quality specifications; the transition to in-house manufacturing is expected upon commissioning of the dedicated facility. Approximately 30 acres of land near Hyderabad has been purchased and converted for a state-of-the-art manufacturing facility; commercial production is scheduled to commence in early 2027.

Response to Trade and Logistics Disruptions

FY 2025-26 highlighted the importance of agility in global seafood trade. The U.S. tariff escalation during FY 2025-26 — beginning at 26% in April 2025, escalating to 50% from 27th August 2025, and ultimately reduced to 18% on 2nd February 2026 following a bilateral trade understanding — materially affected Indian shrimp exports to the U.S. before subsequent easing restored market visibility. In addition, geopolitical tensions in West Asia affected shipping routes, increased transit times, and raised freight and insurance costs.

The Company responded through six key pillars:

• Active market diversification: The Company accelerated its expansion into Japan, Korea, the European Union, the Middle East, and Canada. Industry-wide non-U.S. exports grew 30% year-on-year to US$ 1.38 billion in the first five months of FY26 from US$ 1.06 billion in the corresponding period.

• Acceleration of value-added product strategy: The Company strengthened its focus on cooked, breaded, and ready-to-eat shrimp — categories where margins are higher and pricing pressure is comparatively less acute.

• Supply chain and freight management: Against the backdrop of the Red Sea–Suez Canal disruption, the Company strengthened logistics planning, vessel routing, container management, and marine insurance arrangements. Moderation in freight rates in certain trade corridors during the year contributed to the improvement in processing-segment margins.

• Capital expenditure discipline: The Company exercised prudent capital allocation, placing further expansion of shrimp feed and processing capacity on hold during the year while continuing to invest in maintenance, R&D, and the new pet food and fish feed verticals.

Following the reduction of the U.S. reciprocal tariff to 18% in February 2026, and the conclusion of the India-EU FTA and India-UK CETA, Indias export market outlook has improved materially from the conditions prevailing in the middle of the year. Separately, following the U.S. Supreme Courts ruling on 20th February 2026 (6–3 majority) that the IEEPA does not authorise the imposition of tariffs, U.S. Customs and Border Protection (CBP) discontinued the collection of IEEPA-based tariffs with effect from 24th February 2026 and initiated refund proceedings. To facilitate large-scale refund processing, CBP launched the Consolidated Administration and Processing of Entries (CAPE) functionality within its Automated Commercial Environment (ACE) on 20th April 2026. Avanti Frozen Foods Private Limited, as the importer of record in the United States, is in the process of filing entries through the ACE portal to claim refunds on IEEPA tariffs paid. The quantum of potential refunds is estimated at approximately USD 15–20 million; however, since most entries relating to frozen shrimp from India remain suspended pending completion of anti-dumping and countervailing duty reviews (expected to conclude over 12–18 months), the actual processing and crediting of refunds is expected to follow the lifting of those suspensions.

Financial Performance

The following discussion is based on the audited financial results for the year ended 31st March 2026.

Consolidated Performance

Revenue from operations increased to Rs. 6,065.86 crore in FY 2025-26 from Rs. 5,598.69 crore in FY 2024-25, a growth of 8.34%. Other income increased to Rs. 210.61 crore from Rs. 165.48 crore, reflecting higher treasury income and foreign exchange gains. Total income from continuing operations stood at Rs. 6,276.46 crore compared with Rs. 5,764.17 crore in the previous year.

Profit Before Tax from continuing operations, before exceptional item, stood at Rs. 893.24 crore compared with Rs. 737.26 crore in FY 2024-25, a growth of 21.16%. The Company recognised an exceptional item of Rs. 12.97 crore, representing an impairment provision on its investment in Patikari Power Private Limited (see Power section below). After this exceptional item, Profit Before Tax from continuing operations stood at Rs. 880.27 crore, a growth of 19.40%. Profit After Tax from continuing operations stood at Rs. 655.76 crore compared with Rs. 556.88 crore, an increase of 17.76%. Net Profit from continuing and discontinued operations combined stood at Rs. 656.80 crore compared with Rs. 557.05 crore, an increase of 17.91%. Net Profit attributable to the owners of the Company stood at Rs. 606.06 crore compared with Rs. 528.82 crore, an increase of 14.61%.

Basic Earnings Per Share from continuing and discontinued operations improved to Rs. 44.48 from Rs. 38.81. Other equity (consolidated) increased to Rs. 3,272.43 crore from Rs. 2,787.34 crore, reflecting the Companys strengthened financial position. The Board has recommended a dividend of Rs. 10 per equity share of face value Re. 1 each for FY 2025-26, subject to approval of shareholders.

Standalone Performance

On a standalone basis, revenue from operations stood at Rs. 4,375.06 crore compared with Rs. 4,419.09 crore in FY 2024-25. Profit Before Tax from continuing operations, before exceptional item, stood at Rs. 725.38 crore compared with Rs. 658.51 crore, a growth of 10.16%. The standalone exceptional item of Rs. 10.65 crore represents the impairment provision on the Companys investment in Patikari Power Private Limited. After the exceptional item, Profit Before Tax from continuing operations stood at Rs. 714.73 crore, a growth of 8.54%. Profit After Tax from continuing operations stood at Rs. 536.81 crore compared with Rs. 492.13 crore, a growth of 9.08%. Net Profit (including discontinued operations) stood at Rs. 537.86 crore compared with Rs. 492.30 crore. Basic EPS (continuing and discontinued operations combined) stood at Rs. 39.48 compared with Rs. 36.13.

Balance Sheet Position

The Companys balance sheet position as at 31st March 2026 remains robust. On a consolidated basis, total assets stood at Rs. 4,260.40 crore. Total equity of the consolidated Group stood at Rs. 3708.00 crore, of which Rs. 3,286.05 crore is attributable to the owners of the Company. The Companys borrowings remain negligible — total consolidated borrowings stood at approximately Rs. 10.46 crore as at 31st March 2026. The Company has a strong financial base, low debt levels, and the ability to fund future growth initiatives through internal resources.

Subsidiary and Associate Structure

The consolidated financial results include the results of the following entities:

Name of the Entity	Nature of Relationship	% Holding
Avanti Frozen Foods Private Limited	Subsidiary	60.00%
Srivathsa Power Projects Private Limited	Subsidiary	100.00%
Avanti Pet Care Private Limited	Subsidiary	60.00%
Sealuxe B.V., Netherlands	Subsidiary	100.00%
Patikari Power Private Limited	Associate	25.89%

Strengths, Weaknesses, Opportunities and Threats

Strengths

Avanti Feeds Limited is one of Indias leading shrimp feed companies with more than three decades of experience in the aquaculture sector. Its strong farmer relationships, technical expertise, distribution reach, and long-standing collaboration with Thai Union have enabled it to build a trusted and differentiated position in the industry. The Companys integrated business model — covering feed, processing, exports, and emerging adjacent areas such as pet care and fish feed — provides resilience and flexibility. Its focus on quality, feed performance, farmer support, and value-added products strengthens its competitive position. An estimated market share of approximately 51% to 53% in the Indian shrimp feed market underscores its leadership position.

The Company also has a strong financial base. Total consolidated equity stood at Rs. 3,707.99 crore as at 31st March 2026. Standalone borrowings are negligible (total finance cost for FY 2025-26 was Rs.

0.64 crore), and the Company has the financial flexibility to pursue strategic diversification opportunities without external borrowing.

Weaknesses

The Company operates in an industry exposed to external variables beyond its control — climatic con ditions, disease outbreaks, raw material price volatility, shrimp price fluctuations, export dependency, tariff changes, and logistics disruptions. The feed business is sensitive to raw material costs, while the export business is exposed to currency movements, freight costs, and global demand cycles. The full extent of cost increases cannot always be immediately passed on through price increases, creating periods of margin compression. The Company manages these challenges through inventory discipline, forex hedging, and continuous engagement with the Government on supportive policy frameworks.

Opportunities

The long-term opportunity for aquaculture and seafood remains strong, supported by rising global demand for protein-rich and healthy food products. Indias record seafood exports in FY 2025-26 underscore the strength of the sector and the opportunity for organised players with quality and processing capabilities. Key opportunities include:

• India-EU FTA: Expected to enter into force in early 2027, will progressively eliminate tariffs of 12% to 26% on Indian shrimp into the EU — the worlds largest single seafood market.

• India-UK CETA: Grants 100% duty-free access for most seafood products to the UK market, eliminating tariffs of up to 21.5%.

• US-India tariff improvement: The reduction of the U.S. reciprocal tariff on Indian goods from 50% to 18% effective 2nd February 2026 has materially improved Indias price competitiveness in the U.S. market.

• Ecuadors competitive correction: Convergence of India-Ecuador farmgate prices for the first time in nearly four years supports better global pricing discipline.

• Pet food and fish feed: Fast-growing consumer categories that leverage Avantis core expertise in nutrition, sourcing, processing, and quality management.

• Export Promotion Mission: Governments Rs. 25,000 crore mission announced 12th November 2025 provides priority support to tariff-affected sectors including marine products.

Threats

The industry continues to face risks from global trade barriers, U.S. tariff uncertainty, West Asia logistics disruption, freight volatility, insurance and war-risk costs, disease outbreaks, climate risks, and raw material price increases. Additional regulatory risks include:

• Market volatility and tariff uncertainty: The U.S. Administration introduced a temporary global import surcharge under Section 122 of the Trade Act of 1974, effective 24th February 2026 for up to 150 days, initially fixed at 10%, with indications of a possible increase; the final position is awaited.

• Patikari Power impairment and associate risk: The cloudburst on 1st July 2025 severely damaged PPPLs 16 MW hydel plant; the Company has recognised an impairment provision accordingly.

• Labour Codes — Regulatory Impact: On 21st November 2025, the Government of India notified four Labour Codes consolidating 29 existing labour laws. The Company has assessed and recorded the incremental financial impact of Rs. 10.90 crore (consolidated) and Rs. 8.51 crore (standalone) for FY 2025-26, pertaining to gratuity and leave encashment provisions.

• Domestic feed competition: The customs duty on imported shrimp feed has been reinstated at 5% in the FY 2026-27 Union Budget; monitoring competitive intensity remains important.

The Company continues to address these risks through diversification, cost discipline, farmer engagement, forex management, value addition, and operational controls.

Future Outlook for Indias Aquaculture and Seafood Sector

The outlook for Indias aquaculture and seafood sector remains positive over the medium to long term. India achieved record seafood exports in FY 2025-26, reflecting the sectors underlying resilience despite trade and logistics challenges. Growth is expected to be supported by improving global demand, value-added product opportunities, market diversification, government support, traceability and sustainability initiatives, and Indias cost and quality competitiveness.

The combination of the India-EU FTA expected to enter into force in early 2027, the India-UK CETA granting 100% duty-free access, the U.S. tariff rollback, Ecuadors competitive correction, and sustained domestic policy support — together represent a structurally favourable confluence that has not been seen by the Indian shrimp sector in recent memory.

For Avanti, the focus will remain on strengthening the shrimp feed business, expanding value-added products, improving processing profitability, diversifying exports, developing pet care and fish feed businesses, and sustaining long-term shareholder value. The Company believes that its integrated business model, strong farmer relationships, technical expertise, and prudent financial management position it well to navigate changing market conditions and capture future opportunities. Feed sales in FY 2026-27 are estimated at approximately 5,80,000 MT; shrimp processing export volumes are targeted at approximately 19,000 MT. The Company does not foresee any significant capital expenditure in the next two years, with the focus remaining on improving capacity utilisation and value-added product expansion within existing facilities. However, FY 2026-27 is expected to be a challenging year for the aquaculture industry. The prices of major raw materials — fish meal and soya bean meal — have risen steeply since May 2026, attributable to the geopolitical situation in West Asia and the threat of El Ni?o conditions impacting agricultural output. Fish meal prices, which stood at approximately Rs. 100 per kg at the start of the current year, rose to approximately Rs. 240 per kg by June 2026, representing a near-doubling within two months. Soya bean meal prices have also increased by approximately 45% over the same period, compounded by a Government of India increase in the Minimum Support Price of soybean by approximately Rs. 380 per quintal to Rs. 5,708 per quintal. A significant contributing factor to the fish meal shortage is the diversion of 75–80% of domestically manufactured fish meal to exports, incentivised by higher export price realisation and Government export incentives, while local buyers face a 5% GST on domestic purchases not applicable on exports. The Company, along with the Feed Manufacturers Association and CLFMA, is actively representing to the Government to regulate fish meal availability through limiting export quantities and withdrawal of export incentives; it is also approaching the Government for permission to import soya bean meal on a limited basis to stabilise prices. The Company intends to increase feed prices to compensate for higher raw material costs to the extent feasible while preserving farmer economics.

POWER

The Company sold its windmill asset during the year as part of its strategy to streamline non-core assets. The discontinued wind power operation recorded Profit After Tax of Rs. 1.05 crore in FY 2025-26 compared with Rs. 0.17 crore in FY 2024-25. The divestment has had no material impact on the ongoing operations of the Company.

Srivathsa Power Projects Private Limited (SPPPL), a wholly-owned subsidiary, operates a 17.2 MW gas-based independent power project in Andhra Pradesh. The plant remained non-operational during FY 2025-26 due to non-availability of APM gas, following the Ministry of Petroleum and Natural Gas directive (issued in July 2022) under which APM gas from the KG basin allocated to power plants was diverted to CGD entities.

Patikari Power Private Limited (PPPL), in which the Company holds a 25.89% equity interest as an Associate, operates a 16 MW Hydel Power Project on the Beas River in Himachal Pradesh. On 1st July 2025, the plant sustained severe damage following a cloudburst that destroyed major infrastructure including the approach road, dam site, and powerhouse. After assessing the facts and applying the relevant accounting standards, the Company has recognised an impairment provision on its investment in PPPL. The consolidated exceptional item stands at Rs. 12.97 crore and the standalone exceptional item stands at Rs. 10.65 crore for FY 2025-26.

Internal Control Systems and their Adequacy

The Company has adequate internal control systems commensurate with the size and nature of its operations. These systems are designed to ensure safeguarding of assets, proper authorisation of transactions, accuracy of accounting records, compliance with statutory requirements, and reliability of financial reporting. The Company has engaged an Independent Chartered Accountant firm as Internal Auditor, responsible for ensuring compliance with all the statutory requirements. The Company continues to review and strengthen its systems and processes through internal audits, management reviews, risk assessments, and corrective actions.

Discussion on Financial Performance with Respect to Operational Performance

(i) Operational Performance

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, and Indian Accounting Standards. The Companys financial performance during FY 2025-26 reflected the strength of its integrated model and disciplined execution. Revenue growth was supported mainly by the Processed Shrimp segment, while the feed business remained stable despite input cost pressure. Profitability improved due to better performance in Processed Shrimp, improved segment margins, higher other income, and disciplined cost management. The exceptional impairment relating to Patikari Power Private Limited was recognised during the year and has been appropriately accounted for.

On a standalone basis, the Company reported Profit Before Tax (before exceptional item) of Rs. 72,537.74 lakhs as compared to Rs. 65,850.57 lakhs in the previous year. After the exceptional item of Rs. 1,064.52 lakhs, standalone Profit Before Tax stood at Rs. 71,473.22 lakhs.

(ii) Segment-wise Performance

The segment-wise performance of the Company during FY 2025-26 is disclosed in the Notes to Accounts in the Financial Statements.

Key Financial Ratios

The key consolidated financial metrics and standalone ratios are set out below:

Particulars	FY 2025-26	FY 2024-25
	(Rs. in Crore)	(Rs. in Crore)
Consolidated Revenue from Operations	6,065.86	5,598.69
Consolidated PBT from Continuing Ops (before exceptional)	893.24	737.26
Consolidated PAT from Continuing Operations	655.76	556.88
Basic EPS – Continuing & Discontinued Operations	44.48	38.81
Feed Segment Revenue (consolidated)	4,366.81	4,397.67
Processed Shrimp Segment Revenue (consolidated)	1,689.46	1,180.27
Feed Segment Result (consolidated)	558.54	527.02
Processed Shrimp Segment Result (consolidated)	128.25	48.61

Standalone Key Financial Ratios (pursuant to Schedule V(B) to the SEBI LODR Regulations, 2015):

Particulars	FY 2025-26	FY 2024-25
Operating Profit Margin (%)	16.61%	14.93%
Net Profit Margin (%)	12.29%	11.14%
Debtors Turnover (No. of times)	23.37	19.13
Inventory Turnover	8.34	7.69
Current Ratio	5.03	5.62
Return on Net Worth (%)	20.74%	20.61%

Human Resources / Industrial Relations

As Avanti charts a steady growth trajectory, we continue to proactively navigate evolving macroeconomic and business challenges. In order to sustain long-term competitiveness, we have successfully deployed several strategic corporate initiatives, including:

• Kaizen change management programme in order to achieve operational excellence.

• Business Process Automation to scale digital capabilities.

• Leadership Training & Talent Recognition Initiatives to build a robust leadership pipeline.

Several of these initiatives are yielding positive results. We are confident that the investments in our human capital and process frameworks will deliver dividends in the years to come. Ultimately, our progress remains entirely powered by the dedication, resilience, and excellence of our people.

Conclusion

FY 2025-26 was a year of changing tides for the aquaculture industry. Avanti navigated tariff uncertainty, logistics disruption, input cost pressures, and shifting global demand with discipline and consistency. The Companys performance reflected the strength of its core feed business, the growing contribution of the Processed Shrimp and value-added segments, and the promise of emerging growth platforms such as pet care and fish feed.

With a resilient business model, strong farmer relationships, diversified export strategy, healthy financial position, and future-ready initiatives, Avanti is well positioned to chart growth across changing tides.

	For and on behalf of the Board
	AVANTI FEEDS LIMITED
	A. Indra Kumar
	Chairman and Managing Director
	DIN: 00190168
Place : Hyderabad
Date : May 28, 2026