Hello Sir,

Hope you are doing well.

Recently, I was going through the con-call of Apex Frozen Foods which exports processed shrimps to US, EU, China and other markets.

The demand from US continues to be low. However, as per the management, they believe both the supply and demand should be better in FY 25 in comparison to FY 24.

In general, we like looking at companies which have done well in the past but currently going through a tough phase as a lot of times one can get good companies at cheaper valuations in such scenarios.

To understand the company better, we have shared notes from the Q3 FY 24 con-call of the company:


Before that, a few days back, we released our new stock recommendation for our Alpha and Alpha + Members

Company’s main growth and profit driving segment has grown more than 10x in terms of sales and profit in the last 10 years. We believe it has the potential to double its PAT in the next 3 yrs

For details on the stock click HERE


APEX Frozen – Notes from Q3 FY 24 con-call

– Sales

  • Total volumes sold: 2,117 metric tons (down from 2,869 metric tons in Q3 FY23)
  • Net revenue: Rs 148 crore (down from Rs 230 crore in Q3 FY23 and Rs 240 crore in Q2 FY24)

– Reasons for lower sales

  • Lower volumes sold to the United States (key market) due to subdued demand
  • Weakness in the U.S. market, impacted overall RTE sales in Q3FY24
  • Global shrimp price decline (weak demand and supply)
  • In Apex’s case, lower contribution from RTE (Ready-to-Eat) products due to a shift in geographical mix (more EU, less US) impacted the realization
  • Average realization for Q3 FY24 came in at around Rs 663 per kilo as against Rs 748 per kilo in Q3FY23

– Positive signs

  • Shrimp prices have stabilized after a downward trend
  • US market situation is slowly easing, inventories at customer end are decreasing
  • Company taking up steps for setting up wholly owned subsidiary in the U.S., mainly for support with regard to logistics and also market development in the U.S.A
  • EU sales are growing (50% YoY in Q3 and 9M), but mainly for RTC (ready to cook) products due to pending regulatory approvals for higher-value RTE products
  • Share of EU in overall sales mix increased to 36% in Q3FY24 & 30% in 9MFY24 from 17% last year
  • The management is optimistic about Chinese demand for the Spring Festival and potential new inquiries in March/April 2024

– Supply side

  • Ecuadorian shrimp supply puts pressure on realizations
  • Indian shrimp has a cost and value-added product advantage (both RTE and RTC)
  • Stable farm gate prices and increased stocking of shrimp seed in India are expected to improve supply in FY25
  • Anti-dumping duty (AD/CVD) petitions filed against Ecuador and Indonesia in the US market could create a more level playing field for all shrimp exporters

– Balance sheet

  • Debt continues to decline due to deleveraging efforts (Rs 83 crore debt as of Sep 30, 2023)

– Guidance

  • The company is positive about achieving its original sales volume target of 15,000-18,000 metric tons in FY25




Disclaimer: This is not a recommendation to buy/sell Apex Frozen Foods. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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