Apex Frozen Foods targets volume-led growth as RTE mix and FTAs expand

Investment View and Valuation

Geojit Investments Limited maintained its BUY recommendation on Apex Frozen Foods Ltd. in its October 6, 2026 report and revised its target price to Rs 430. The broker believes the company delivered robust Q1 FY27 earnings despite weak volumes, as improved realisations lifted profitability. The next phase of growth is expected to be led by volumes.

Geojit expects revenue and EBITDA to grow at compound annual growth rates of 19 per cent and 42 per cent, respectively, over FY26 to FY28E. It values Apex Frozen Foods at 17 times FY28E EPS to derive the Rs 430 target price.

Q1 FY27 Operating Performance

Apex Frozen Foods is a South India, Andhra Pradesh-based exporter of processed shrimps with processing capacity of 34,240 MT. Q1 FY27 revenue was broadly flat year-on-year at Rs 257 crore. Shrimp volumes declined 13 per cent year-on-year to 2,624 MT because of labour shortages during April and May and war-related shipping disruptions.

A 14 per cent rise in realisation offset the volume weakness. Average realisation was about Rs 930 per kg, supported by a weaker rupee, firmer dollar prices and a better product mix. Management expects Q2 realisation to remain at a similar level.

The Q1 FY27 EBITDA margin of 11.8 per cent was above the pre-Covid range of 10 to 11 per cent. The US tariff was settled at 10 per cent and is borne by customers, helping American buyers return. The US revenue share rose to 70 per cent from 54 per cent in Q1 FY26. The EU and UK share declined to 25 per cent because testing and customs-clearance delays deferred shipments into Q2.

Volume Growth and Product Mix

Management retained its FY27 volume guidance of about 12,000 MT, supported by an order book extending into mid-Q3. Ready-to-eat products accounted for 16 per cent of Q1 FY27 volumes, and management targets at least 18 to 20 per cent in FY27, compared with 12 per cent in FY26.

Ready-to-eat products earn at least US$0.50 per kg more margin than ready-to-cook products. Capacity utilisation was 38 per cent, and management intends to maintain utilisation at 35 to 40 per cent during the year. It sees 14,000 to 15,000 MT as the next volume milestone, depending on free-trade agreements.

Exports to Japan have restarted, Russia could commence by the end of Q2 or Q3, and Australia awaits customer audits.

Growth Catalysts and Risks

Medium-Term Catalysts

• The India-UK FTA, effective from July 15, 2026.
• The expected India-EU FTA around early 2027.
• A potential reduction in the US countervailing duty in the December review.
• The anti-dumping duty final review, with the duty currently at 3.4 per cent, is due in September.

Margin Risks

Risks to margins include farm-gate prices, which rose 6 to 7 per cent in recent weeks, and ocean freight, which has more than doubled since Q4 FY26 because of war-related disruptions. Geojit has therefore factored in moderation from the Q1 FY27 margin levels.

Earnings Estimates

Geojit raised its FY27E revenue estimate to Rs 1,111 crore from Rs 974 crore, EBITDA estimate to Rs 83 crore from Rs 59 crore and adjusted PAT estimate to Rs 58 crore from Rs 31 crore. Its FY28E estimates are revenue of Rs 1,320 crore, EBITDA of Rs 111 crore and adjusted PAT of Rs 79 crore.