Seafood Stocks Surge Amid Shifts in Global Trade Routes Through Strait of Hormuz

India's Seafood Exports Show Resilience Amid Global Disruptions

At a time when geopolitical tensions and trade disruptions have pushed investors away from export-focused sectors, seafood exporters are emerging as a pocket of resilience on Dalal Street. Even as fears around the choked Strait of Hormuz amid the West Asia war weighed on broader export plays, investors bet that the sector's limited exposure to the Gulf and diversified global demand could help cushion the impact of higher logistics and energy costs.

The numbers are telling. Stocks such as Apex Frozen Foods, which has surged nearly 62% year-to-date, Avanti Feeds, up 65.6%, Coastal Corporation, up 32%, and Essex Marine, up 87.5%, have significantly outperformed the broader benchmark Nifty Smallcap 250, which is merely up 1.7%. For perspective, world's top gold processor Rajesh Export saw its shares fall about 34% over the same period, while shares of Gokaldas Exports, which has exposure to Africa and partners top Fortune 500 apparel retailers and premium brands, are down 3.4% year to date.

Comparison of Stock Performance

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The Street had largely been avoiding export-oriented companies over fears that the Strait of Hormuz blockade could disrupt operations and hurt earnings. However, market participants believe the risk for seafood exporters is relatively contained. India's seafood exports rose to a record ₹72,325.82 crore in FY26, the commerce & industry ministry said in April, citing provisional data from the Marine Products Export Development Authority.

Frozen shrimp anchors India's seafood exports, comprising over two-thirds of export value and more than 40% of the volume. India also exports fish, squid, cuttlefish, dried seafood, and live and chilled products.

Most seafood exports to China, the US, Europe, and Japan move through Sri Lanka and Singapore, making West Asia that is directly impacted by the US-Iran war a relatively small revenue contributor for these firms including Avanti Feeds and Apex Frozen Foods, said Sonam Srivastava, founder and fund manager at Wright Research. The impact of the Strait of Hormuz disruption is more indirect than it appears for the sector, as India's seafood exports to China and Southeast Asia bypass the Gulf region via the Malacca Strait in Southeast Asia, while Europe-bound shipments are more prone to the Red Sea-Suez disruption issues, she said.

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The bigger financial risk from the war in West Asia is rising energy costs, said Srivastava, pointing to crude oil prices topping $100 per barrel after the closure of the Strait of Hormuz. "For a sector already operating on thin margins of 4-12%, a sustained increase in crude prices directly affects fuel surcharges, cold chain costs, and reefer freight rates," she said. An extended disruption at Hormuz could lead to an increase in freight and energy costs for exporters worldwide, said Sharat Reddy Sabbella, executive director of Sharat Industries Ltd.

Sabbella, however, said the Indian seafood industry's exposure to West Asia is limited compared to the larger markets such as the US, Europe, and East Asia. India's seafood exports hit a record in FY25, with the US and China continuing to dominate demand, offering the sector some protection from disruptions in the Gulf region, he said. The US is India's largest seafood export market, though shipments to the country declined after the reciprocal tariffs kicked in, but the weakness was more than offset by growth in alternative markets such as China, the EU, and Southeast Asia, according to a release by the commerce & industry ministry.

Sharat Industries is focused on broadening its export presence and keeping its supply chain flexible to handle uncertainties more effectively, said Sabbella. "At this stage, we believe the impact is likely to be moderate and mostly related to logistics and shipping costs. This assumption holds unless geopolitical tensions last for a long time and begin to affect global trade routes more significantly." Apex Frozen Foods and Avanti Feeds did not respond to Mint's queries.

Karthick Jonagadla, smallcase manager and managing director-chief executive officer at Quantace Research, says the investment case remains stock-specific. Avanti Feeds, according to him, remains the cleaner institutional play, with 9MFY26 consolidated PBT (April-December 2026 consolidated profit before tax) rising 33% to ₹698 crore, although elevated fish meal and soymeal prices continue to limit the optimism on margins. Apex Frozen Foods, meanwhile, is an operating-leverage recovery story, he says, with October-December revenue at ₹264 crore, Ebitda at ₹17 crore, margin at 6.5%, and non-US exports near 51%. Coastal Corporation and Essex Marine remain higher-risk small-cap bets rather than core portfolio holdings, he added.

Jonagadla said the sector needs durable growth, high return ratios, clean balance sheets, and earnings visibility, not just a better export cycle. "Avanti is closest to quality, with 32.3x P/E (price-to-earnings ratio), 29.3% ROCE (return on capital employed), and 21.9% ROE (return on equity), but valuation already discounts a lot," he said. "Apex trades at 46.5x P/E despite 2.43% ROCE and 0.76% ROE. Coastal's 27.3x P/E, 5.8% ROCE, and 222-day cash-conversion cycle argue caution. Essex is growing, but from a small base."

Some participants believe much of the optimism on the sector has already been priced in, and making blind buys could be risky for investors who missed the early rally. Even as the marine product sector has diversified beyond the US, sustaining high growth will remain challenging amid weak demand, rising competition, and ongoing trade disruptions, said Ashwini Shami, president and chief portfolio manager at OmniScience Capital. He said shrimp price volatility, disease cycles, and currency risks add to concerns on steady earnings growth, while trade and tariff-related disruptions for the sector is a continued overhang.

"Forward revenue growth estimates remain in low double-digits, and the growth witnessed over the last 5-7 years, even before tariff restrictions, does not inspire confidence in the sector's ability to sustain consistently high growth rates in the future," Shami said. Some market participants believe marine food exports remain vulnerable to shipping disruptions due to their perishable nature and thin margins, with prolonged high freight costs posing a key risk to profitability despite record FY26 exports.