Avanti Feeds reversed stance on US tariff refunds: now expects $15-20 million
Six months ago management said refunds would go to customers. Now it says it will keep $15-20 million as importer of record, with no explanation.
What's new
- FY26 frozen shrimp exports up 20% to 16,976 MT; FY27 target 19,000 MT.
- Feed division Q4 PBT fell to ₹139 cr from ₹194 cr YoY as fishmeal prices doubled.
- Company expects $15-20 million US tariff refund as importer of record.
- Pet food Q4 sales ₹1.51 cr; capacity expanding from 53 MT to 150 MT.
Themes from the call
Demand
Shrimp exports rose 20% in FY26; FY27 target implies 10-12% growth, but management calls the season challenging.
Margins
Feed margins squeezed by raw material inflation: fishmeal up 43% YoY, soybean meal up 34% YoY, with partial price hikes.
Capital allocation
No major capex planned for next 2 years; focus on utilization; pet food facility under development without timeline.
Guidance watch
- FY27 feed volume guided at 580,000 MT (+3.2%) assuming shrimp production of 8-9 lakh MT.
- Consolidated growth target 10-15% for FY27 positioned as significant achievement.
- Feed price increase imminent within 10 days; quantum depends on market acceptability.
Risk flags
- The $15-20 million refund reversal without explanation undermines guidance credibility.
- Raw material costs structurally elevated (fishmeal ₹240/kg, soybean meal ₹72/kg) may not be fully recovered.
- Pet food early-stage with higher-cost imports; own facility has no commissioning date.
Key quotes
-
"In terms of refund, see, as Avanti, we've been able to pass on the tariff. So, whether getting this refund, I'm not sure. I don't think we'll actually get the refund. We have to give it back to the customer, I guess."
— Avanti Feeds management, Nov 2025 call -
"Avanti Frozen Foods Private Limited is the importer of record in the US. We handle customs clearance and delivery. We are currently validating the figures, but the refund should be approximately $15 million to $20 million. We have already opened the necessary US account to receive these credits."
— Avanti Feeds management, Jun 2026 call
The brief
Avanti Feeds' latest concall reveals a quiet reversal on US tariff refunds. In November, investors were told any refund would go to customers. This quarter, management says the company is the importer of record and expects a $15-20 million windfall directly. No explanation was given for the pivot.
The numbers are a mix of strong export growth and raw-material pressure. Shrimp exports rose 20% to 16,976 MT, and the FY27 target of 19,000 MT implies 10-12% growth. The processing division delivered standout performance, with gross income up 43% to ₹1,741 crore and PBT surging ₹92 crore.
The feed division tells a different story. FY26 feed volumes were flat at 562,060 MT, and Q4 PBT fell to ₹139 crore from ₹194 crore a year ago. Fishmeal prices have doubled to ₹240/kg, and soybean meal is up 34% YoY. Management announced two price hikes — one in February that only applied for a month, and another imminent within 10 days. But the quantum is contingent on market acceptability, which is guarded language for 'we are testing how much we can pass on'.
Working capital is improving — the company now takes advances against LCs. Pet food is scaling slowly: ₹1.51 crore in Q4, 31 distributors, and an 800 MT year-end capacity target from a current 53 MT. The Hyderabad facility is still in design.
None of this changes the base business. What it changes is the trust in management's word on tariffs. Avanti is a solid shrimp exporter with a respectable feed franchise, but a $15-20 million surprise without acknowledging the contradiction is not how you build credibility.
Avanti's refund pivot adds a credibility question to an otherwise solid export story.