Coastal Corporation Ltd Management Discussions

Industry Structure & Developments Indian Economy

India continued to maintain its position as one of the worlds leading producers and exporters of shrimp during FY 2025-26. The shrimp processing and export industry is characterized by an integrated value chain comprising hatcheries, aquaculture farms, feed manufacturers, processors, cold chain logistics providers, and exporters, catering to major international markets such as the United States, Europe, Japan, China, and the Middle East.

During the year, the industry operated in a dynamic environment influenced by changing global trade policies, evolving consumer preferences, and fluctuating international demand. Despite these challenges, the demand for value-added and high-quality seafood products remained resilient. The industry continued to focus on product diversification, operational efficiency, traceability, food safety, sustainability, and compliance with stringent international quality standards. Indias strong aquaculture base, modern processing infrastructure, and competitive production capabilities continue to position the sector for long-term growth in the global seafood market.

India exported 19,72,018 metric tonnes (MT) of seafood valued at Rs. 73,890.46 crore (USD 8.46 billion) during FY 2025-26, registering an all-time high in both volume and value despite challenging global market conditions. The United States and China continued to be the principal importers of Indian seafood during the year.

Frozen shrimp remained the leading export item, contributing Rs. 49,037.93 crore (USD 5,624.48 million). It accounted for 40.19 per cent of the total export quantity and 66.52 per cent of the total export earnings in US dollar terms. During FY 2025-26, shrimp exports registered a growth of 13.16 per cent in rupee value and 8.64 per cent in dollar value.

A total of 7,92,647 MT of frozen shrimp was exported during the year. The United States remained the largest market for frozen shrimp imports from India, importing 2,56,128 MT, followed by China (1,69,505 MT), the European Union (1,35,599 MT), Southeast Asia (83,810 MT), Japan (40,776 MT), the Middle East (30,478 MT), and other countries combined (76,351 MT). Exports of Litopenaeus vannamei (L. vannamei) and Black Tiger shrimp recorded growth in both volume and value.

The table below presents Indias seafood and frozen shrimp exports over the last five financial years.

(Source: Marine Products Export Development Authority (MPEDA)

Global Economy

The global seafood industry continued to experience significant shifts during FY 2025-26, driven by changing trade policies, geopolitical developments, evolving consumer preferences, and increasing demand for value-added seafood products. India continued to maintain its position among the worlds leading shrimp exporters, supported by its robust aquaculture ecosystem, advanced processing infrastructure, and strong quality standards.

During the year, the industry experienced challenges arising from reciprocal tariff measures imposed by the U.S. Government. However, the subsequent reduction of reciprocal tariffs to 10% provided considerable relief to Indian exporters. Furthermore, the order directing the refund of reciprocal tariffs paid by Indian companies has significantly improved the outlook for exporters with substantial exposure to the U.S. market.

Despite continued competition from Ecuador and other low-cost producing countries, Indias strength in value-added shrimp processing, stringent quality systems, and diversified product portfolio continues to provide a sustainable competitive advantage. Increasing consumer preference for ready-to-cook and convenience seafood products across developed markets is creating attractive opportunities for Indian processors to improve product realization and operating margins.

In terms of overseas markets, the United States remained the leading importer of Indian seafood in value terms, with imports worth Rs. 20,263.27 crore (USD 2,328.74 million) and a total volume of 2,79,193 MT. Exports to the United States declined by 10.82 per cent in rupee value, 14.22 per cent in dollar value, and 19.51 per cent in volume. Frozen shrimp accounted for 93.55 per cent of the value of Indias seafood exports to the United States.

China emerged as the largest destination for Indian seafood exports in terms of quantity, importing 4,90,369 MT worth USD 1,611.32 million.

The European Union remained the third-largest destination in value terms, importing 2,97,518 MT worth USD 1,592.09 million. It was followed by Southeast Asia, which imported 4,51,756 MT valued at USD 1,348.97 million. Japan continued to be the fifth- largest importer, with imports of 1,05,228 MT worth USD 452.91 million. The Middle East ranked sixth, importing 76,743 MT valued at USD 283 million.

(Source: Marine Products Export Development Authority (MPEDA)

• Financial Performance

On a consolidated basis, Coastal Corporation Limited recorded its highest-ever turnover of Rs. 995.28 crore, representing an impressive 55.67% growth over the previous years turnover of Rs. 639.32 crore. The substantial increase was primarily driven by the successful commercial operations of our ethanol business and continued growth in seafood exports.

On a standalone basis, the Company achieved a turnover of Rs. 707.06 crore, compared with Rs. 623.47 crore in FY 202425, registering a healthy 13.40% year-on-year growth despite challenging international market conditions.

The Company reported a standalone net profit of Rs. 9.56 crore, an increase of approximately 24% over the previous years profit of Rs. 7.69 crore. On a consolidated basis, the Group achieved a net profit of Rs. 22.63 crore, a significant improvement over Rs. 4.65 crore reported in the previous year, reflecting the growing contribution from our diversified businesses.

Despite a challenging year marked by global trade uncertainties and temporary disruptions arising from the increase in U.S. tariff rates, the Company successfully maintained its profitability through effective inventory management, prudent cost optimization, and disciplined operational execution.

Key Financial Ratios:

Pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:

• Navigating Global Trade Challenges

The global seafood industry continued to face a dynamic operating environment during FY 2025-26. The principal challenges included reciprocal tariffs imposed by the United States, continued geopolitical uncertainties, volatile international demand, intense competition from major exporting nations, foreign exchange fluctuations, and elevated financing costs following the withdrawal of interest subvention.

The Company also experienced the impact of reciprocal tariff payments during the year, resulting in additional costs. However, the subsequent reduction of reciprocal tariffs to 10% and the expected refund of tariffs paid to the U.S. Government have significantly improved the industrys outlook and strengthened confidence in future profitability.

In response to these challenges, Coastal Corporation adopted a proactive and diversified strategy focused on operational efficiency, cost optimization, market diversification, and product innovation. The Company strengthened its presence in Europe, Japan, China, South Korea, and other international markets while continuing to enhance its portfolio of value- added seafood products to improve margins and reduce dependence on commodity exports.

The successful commencement of Coastal Biotech Private Limiteds ethanol plant has further diversified the Groups revenue base, reducing dependence on the seafood business and enhancing overall business resilience. Continuous investments in technology, quality assurance, renewable energy, and sustainable manufacturing practices have also strengthened the Companys long-term competitiveness.

• Renewable Energy

Our 3.6 MW Solar Power Plant continued to support our sustainability initiatives by generating 48.15 lakh units of renewable energy during the year. A total of 65.50 lakh units were adjusted against our power consumption, while the remaining units were banked for future utilization, reinforcing our commitment to energy efficiency and environmental stewardship.

• Key Business Drivers

Product Portfolio & Global Reach

Coastal Corporation continues to strengthen its position as one of Indias leading exporters of premium seafood products. Our diversified portfolio comprises raw, cooked, IQF, butterfly, peeled, breaded, skewered, ready-to-cook, and value- added shrimp products, including premium Vannamei and Black Tiger shrimp.

Our flagship brands·Coastal, Coastal Premium, Coastal Gold, Jewel, and President·continue to enjoy strong customer acceptance across major international markets including the United States, Europe, UK, Canada, Japan, China, Hong Kong, Korea, and SriLanka. The Company remains focused on increasing the contribution of value-added products, which provide superior margins and align with evolving consumer preferences.

Sustainable Processing Facilities & Diversified Growth Our wholly owned subsidiaries

1. M/s. Coastal Biotech Private Limited successfully completed its first full year of commercial ethanol operations during FY 2025-26. The subsidiary produced Rs. 3.51 crore litres of ethanol, generated a turnover of Rs. 244.73 crore, and reported a net profit of Rs. 13.79 crore during the FY 2025-26. The successful stabilization of the ethanol plant marks a major strategic milestone in the Companys diversification into renewable energy and biofuels, creating a strong additional revenue stream beyond seafood exports.

2. M/s. Continental Fisheries India Limited continued to strengthen its export operations and achieved a turnover of Rs. 23.71 crore, more than doubling its previous years revenue of Rs. 9.98 crore. Although the subsidiary reported a marginal loss due to foreign exchange fluctuations on export financing facilities, its underlying business operations remained profitable, and management remains optimistic about its future growth prospects.

3. M/s. Seacrest Seafoods Inc. (USA) delivered a significant turnaround during the year, achieving a turnover of Rs. 90.59 crore, compared with Rs. 71.00 crore in the previous year. The subsidiary reported a profit of Rs. 4.84 lakh, reversing the previous years loss of Rs. 2.67 crore. With the expected refund of reciprocal tariffs paid to the U.S. Government, Seacrests financial position is expected to strengthen further, providing additional momentum to its future operations.

• Strategic Initiatives

The Company continues to strengthen its seafood processing operations through modern facilities, advanced technology, and internationally recognized quality and food safety standards. The diversification into renewable energy and biofuels through Coastal Biotech Private Limited, along with the 3.6 MW captive solar power plant, reflects the Companys commitment to sustainable growth and operational efficiency.

Going forward, the Company will focus on expanding value-added products, improving operational efficiencies, strengthening its global market presence, and creating long-term value for all stakeholders.

• Outlook for FY 2026-27

The outlook for Coastal Corporation Limited remains positive despite continuing global uncertainties. Improving demand for value-added seafood products, expanding opportunities in international markets, and the expected contribution from Coastal Biotech Private Limited are expected to support sustainable growth and enhance the Companys overall financial performance.

The Company will continue to focus on:

• Expanding value-added seafood exports and strengthening its presence in key international markets.

• Improving operational efficiencies through technology and process optimization.

• Maintaining the highest standards of quality, food safety, and regulatory compliance.

• Promoting sustainability through responsible sourcing and energy-efficient operations.

• Maintaining prudent financial discipline and delivering long-term value to shareholders.

With its strong operational capabilities, diversified business portfolio, experienced management team, and established customer relationships, Coastal Corporation Limited is well positioned to capitalize on future growth opportunities in both the seafood processing and biofuels businesses.

Indias aquaculture and seafood sector continues to offer strong long-term growth prospects, supported by favorable government policies, increasing global demand for high-quality seafood, and the countrys competitive advantage in aquaculture and seafood exports.

The Company remains committed to strengthening its market position through operational excellence, value-added products, sustainable sourcing, and customer-focused growth initiatives. With its integrated business model and experienced management team, the Company is well positioned to capitalize on emerging opportunities and create long-term value for its stakeholders.

Barring any significant adverse developments in global market conditions, trade policies, or climatic factors, the outlook for the aquaculture and seafood industry remains positive.

• Opportunities & Threats

The Company benefits from modern seafood processing facilities, strong quality and food safety standards, established customer relationships across key international markets, and a growing portfolio of value-added seafood products. Its diversification into renewable energy and biofuels further strengthens business resilience and supports sustainable growth. Rising global demand for value-added seafood products, expansion into new export markets, supportive government initiatives for the aquaculture sector, and continued investments in technology and sustainability provide significant growth opportunities.

The business remains exposed to changes in global trade policies and tariffs, increasing competition from other seafood exporting countries, disease outbreaks in aquaculture, climate-related risks, and volatility in international demand and currency markets.

• Internal Control Systems and Their Adequacy

The Company has established a robust and comprehensive internal control framework commensurate with the size, nature, and complexity of its business operations. The internal control systems are designed to ensure the safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, operational efficiency, compliance with applicable laws and regulations, and the timely preparation of reliable financial information.

Given the nature of its shrimp processing and export business, the Companys internal controls also encompass procurement, inventory management, production processes, quality assurance, cold chain management, export documentation, statutory and regulatory compliance, and adherence to international food safety standards. These controls are periodically reviewed and strengthened to ensure operational excellence and business continuity. The Company has appointed an independent firm of Chartered Accountants as its Internal Auditors to evaluate the adequacy and effectiveness of the internal control systems and to review compliance with statutory, regulatory, and internal policy requirements. The Internal Auditors conduct periodic audits across various functions and submit their observations and recommendations to the management and the Audit Committee.

The Finance Department, in coordination with the Internal Auditors and other functional heads, undertakes periodic risk assessments covering both internal and external business risks. Based on these assessments, potential risks are identified, evaluated, and appropriate mitigation measures are implemented to strengthen the Companys risk management framework and internal control environment.

• Human Resource

The Companys shrimp processing and export operations require specialized expertise in the procurement of high-quality raw shrimp, processing, quality assurance, packaging, cold chain management, and compliance with stringent international food safety and regulatory standards. These critical functions are carried out by a team of qualified, skilled, and experienced professionals. The Companys procurement and technical teams work closely with shrimp farmers and suppliers to ensure consistent quality, traceability, and adherence to global customer requirements.

The Company places significant emphasis on developing its human resources through regular technical training, food safety and hygiene programmes, skill enhancement initiatives, and awareness sessions on quality and regulatory compliance. Performance-based incentives, periodic increments, and comprehensive employee welfare measures contribute to a motivated workforce and foster healthy industrial relations. As on 31^st March, 2026, the Company had a total workforce of 1353 employees.