­Extensive experience of promotors in seafood industry 
Malpefresh Marine Export Private Limited (MMEPL) was incorporated in 2014 by Mr. Moulana Ibrahim, Mr. Prabhakarshetty Sureshshetty, Mr. Satish Prabhakarshetty Shetty, Mr. Krishna Prasad, Mr. Sidga Mohammed Ibrahim and Mr. Antonio Luisfelix Rodrigues. The promotors have experience of more than two decades in seafood industry, which has helped them in maintaining healthy relationship with suppliers in Udupi region, Karnataka. The major product line of MMEPL includes squid, cuttle fish, mackerel, ribbon and octopus. MMEPL procures its products from Udupi region, process them and sell to its customers. It primarily caters to export markets (~90% in revenues in FY24) in Southeast Asia and Middle East Asia, with some domestic customer base as well.

Healthy growth in revenue and profitability 
MMEPL has witnessed steady growth in its turnover to Rs.164.60 Cr. in FY2024 up from Rs.148.99 Cr. in FY2023, better than projection. The major reason for a steady and increasing revenue trend is due to increase in exports of frozen fish- extra 20 tons/day production for FY2024. The company has dedicated 260 containers and have exported ~2500kgs/container totalling ~65lakh kgs of export;along with higher number of catches during fishing season – majorly in the months of August to November .Margins of the company have been increasing consistently due to better cost realisation and increase in revenue with lower expenses (as a percentage of revenues). The EBITDA margins have increased to 6.46% in FY2024 as compared to 4.58% in FY2023. The PAT margins have increased to 4.21% in FY2024 from 1.77% in FY2023. Variation in prices of fishes is very minimal as they have strong and long-lasting relationships with customers which enables them to buy in bulk and pass on minimum variation via prices on to customers.

Moderate financial risk profile 
MMEPL’s financial risk profile is marked by moderate capital structure and debt coverage indicators. MMEPL’s net worth stood Rs. 21.78 Cr. as on FY2024 as against Rs. 14.85 Cr. as on FY2023. Debt-equity ratio stood at 0.89 times as on FY2024 as against 1.42 times as on FY2023 due to prepayments of GECL loans  and no new loans availed during the period. Total outside liability/tangible net worth (TOL/TNW) stood at 1.52 times as on FY2024 as against 2.37 times as on FY2023. Interest coverage ratio stood comfortable at 6.50 times as on FY2024 and 4.56 times as on FY2023. The net cash accrual (NCA) to total debt (TD) is 0.41 times as on FY2024 and 0.17 times as on FY2023. DSCR stood at 3.30 times as on FY2024 as against 1.79 times as on FY2023.

Efficient working capital management
MMEPL has an efficient working capital cycle as reflected by its gross current asset (GCA) days of 82 days in FY2024 as against 93 days in FY2023. The debtor days generally range between 30-60 days for international customers and 120-130 days for domestic customers. Different customers have different credit terms including Cash against document financing (CAD), Telegraphic transfers (TT), Documents against payment(DP). The inventory days of the company stood at 31 days in FY2024 as against 37 days in FY2023. The inventory days are high since there are specific months during which fishes are caught and then stored. Also, depending upon customer demand, inventory days tend to get stretched as MMEPL have a large variety of fish products which might not have demand from customers year long. Debtor days of the company stood at 36 days in FY2024 as against 47 days in FY2022. Creditor days of the company stood at 30 days in FY2024 and 34 days in FY2023. The utilization of working capital limits has been around 85% over the past seven months ended October 2024.
 

Regulatory risk and highly competitive industry 
The business is regulated by certain agencies such as - Export Inspection Council as well as The Marine Products Export Development Authority both of which come under the Ministry of Industry & Commerce, Government of India. The seafood market is characterized by uncertainty, which is more pronounced in supply side than from demand side. Seafood is a depleting commodity and increased severity of regulations on excessive fishing has rendered supply more irregular. Thus, the governments around the world regularly put-up new regulations regarding international trade of seafood. The seafood industry is exposed to intense competition as there are several small and large players. The players also face intense competition from Indian exporters impacting the realizations. 

Exposure to volatile raw material prices and forex risk 
MMEPL substantially exports its products and hence it is susceptible to the fluctuations in foreign exchange fluctuation. The raw material prices are also highly volatile depending on its availability, and the company is not able to pass on the price rise in entirety to its customers due to heavy competition from peer players. This keeps the margins exposed and volatile. The company hedges its position by using Forward contracts availed from banks.