Shares of Indian seafood exporters rallied on Tuesday as investors welcomed news of the India-European Union trade deal, which promises to eliminate tariffs on marine products over a phased timeline. The agreement represents a significant opportunity for the sector, which has faced headwinds from increased US tariffs in recent months.

Trade Deal Impact on Marine Products

Under the India-EU trade agreement, the European Union will cut tariffs on 99.5% of goods traded between the two sides over seven years. Most significantly for seafood exporters, duties on Indian marine products are set to be reduced to zero, potentially opening up substantial market opportunities in European markets.

Stock Performance Highlights

Seafood companies posted strong gains during Tuesday's trading session, with several stocks touching significant intraday highs before settling at elevated levels.

Apex Frozen Foods emerged as the standout performer, initially jumping 18.85% to an intraday high of ₹312.75 per share before paring some gains to close at ₹290.25. Avanti Feeds opened with a gap-up gain of approximately 2% and touched an intraday high of ₹786.40 during the session.

Sector Challenges and Opportunities

Indian seafood exporters have encountered significant pressure from higher tariffs imposed by the United States since last year. The US remains the largest market for India's shrimp farmers and exporters, making the diversification opportunities presented by the EU trade deal particularly valuable for the sector.

The elimination of EU tariffs could provide Indian marine product exporters with enhanced competitiveness in European markets, potentially offsetting some of the challenges faced in the US market.

Year-to-Date Performance

Despite Tuesday's gains, the seafood sector has shown mixed performance on a year-to-date basis:

The varied performance reflects the sector's ongoing adaptation to changing trade dynamics and market conditions. The India-EU trade agreement could serve as a catalyst for improved performance as companies capitalize on new market access opportunities in European markets.

Apex Frozen Foods , a leading seafood exporter, reported a robust performance in Q2FY26, showcasing resilience amid challenging market conditions. The company's strategic market diversification efforts have yielded positive results, offsetting the impact of U.S. tariff uncertainties.

Financial Highlights

• Net revenue increased by 19% year-on-year to INR 238.00 crores
• Gross profit surged 76% year-on-year to INR 96.00 crores
• EBITDA grew 284% year-on-year to INR 18.00 crores
• Profit after tax improved to INR 12.00 crores from a loss of INR 1.70 crores in Q2FY25

Market Diversification Success

Apex Frozen Foods has successfully diversified its business, with non-U.S. exports now accounting for 56% of sales in Q2FY26. This strategic shift has helped the company mitigate the impact of U.S. tariff-linked trade uncertainties. The European Union market, excluding the United Kingdom, continued its growth momentum with a year-on-year sales growth of 18% and quarter-on-quarter growth of 21% in Q2FY26.

Improved Realizations and Margins

The company achieved higher realizations at INR 870.00 per kilo, marking a 25% increase year-on-year. This improvement, coupled with favorable exchange rates, contributed to the revenue growth. Gross margins improved significantly to 39%, up by 1,200 basis points year-on-year and 552 basis points quarter-on-quarter.

Volume and Market Challenges

Sales volumes declined marginally from 2,710 metric tonnes in Q2 last year to 2,606 metric tonnes in Q2FY26, primarily due to U.S. tariff-related uncertainties. However, the company's diversification strategy has helped offset some of these challenges.

Future Outlook

Apex Frozen Foods is optimistic about the ongoing India-U.S. trade deal talks and looks forward to improving export trade with the U.S. and other major markets. The company is also awaiting the conclusion of the India-EU Free Trade Agreement, which could further boost its export potential.

The management expects to increase capacity utilization to at least 50% over the next year, aiming for a production of 14,000 to 15,000 metric tonnes. The company is also focusing on value-added products, including ready-to-eat offerings for the European market, which could potentially improve margins in the coming years.

Conclusion

Despite facing challenges in the U.S. market due to tariff issues, Apex Frozen Foods has demonstrated resilience through effective market diversification and improved operational efficiency. The company's focus on expanding into new markets and increasing value-added product offerings positions it well for sustainable growth in the coming quarters.