Avanti Feeds


(Hiral) #858

I was reading an annual report of Avanti feed. I have noticed few red flag

• Srinivas Cystiner Ltd is one of the Promoter and holding 26.62% shareholding in Avanti Feeds. Kindly refer to Annual report 2015-2016 in related party transaction, Rs. 1.80 lakh per annum for the lease of office space has been taken from Avanti feeds by Srinivas Cystiner Ltd.
• Mr. Indra Kumar is also director with Srinivas Cystine Ltd which means he is running other business by misusing Avanti feeds funds
• Mr. Indra Kumar remuneration is 12.30 cr which is 7.78% of net profit ( 158cr) which is on the much higher side. For a moment we may ignore the higher salary considering the fact that he is the one played a major role in the turnaround of the company. Earning such a high salary which means he should concentrate 100% on this business, Kindly refer to below link, He is a director with more than 11 companies other than Avanti Feeds and associate company. His high remuneration in Avanti feed is not justified as he is more keen on other business.

https://www.zaubacorp.com/director/INDRA-KUMAR-ALLURI/00190168


(Sandeep Patel) #859

Shrimp export from India to the U.S. by volume

  • up by 28% YoY in Jan 2017. A good start of 2017.
  • up by 14% YoY in CY 2016. Exported total 1.54L MT.
  • Is 1.54L MT nearing max? Thailand exported 2.02L MT to the U.S. in CY 2010.

Source: https://www.st.nmfs.noaa.gov/apex/f?p=169:2:0::NO


(nil_71) #860

http://www.indexmundi.com/commodities/?commodity=soybean-meal&currency=inr

Input cost price is at Q22016 level. Margin will get a hit for sure


(Raj) #861

If you look at a 5 year chart…it seems it is still in the middle. 2016 it seems saw the lowest levels for RM prices in last 5 years. Also, as I understand they pass on the cost with a lag of a quarter. Hence FY18 should be good in my opinion even if RM prices remain at this level.

Regards,
Raj

Disc: Invested


(eyesice) #862

Has anyone taken a look at this company (Coastal Corp - https://www.screener.in/company/501831/). They seem to be doing a very similar business and their earnings have been stupendous at least on paper and is available at dirt cheap valuations.

I don’t have any further info on this company and hence not creating a new thread for the same.


(reddygvsb) #864

Hardly ever traded. ‘Not so great’ promoters. Best to stay away.


(Sandeep) #865

different perspective… Please elaborate


(nil_71) #866

I remember Avanti saying RM cost is 81% of COGS. Surely will have an impact. But in case they can show top line growth…


(Ayush Mittal) #867

Finally some Mutual Funds getting interested in Avanti - http://www.moneycontrol.com/mf/user_scheme/mfholddetail_sec.php?sc_did=AF21#AF21


(tbhavesh) #868

US cut in anti-dumping duty on shrimps to boost exports - this will be a big positive for Avanti…


(Yogesh Sane) #869

Data from Commerce Ministry shows that Marine Products exports are rising close to 30% in first 2 months of this year.

Source: http://commerce.gov.in/writereaddata/UploadedFile/MOC_636252005102396148_QUICK_ESTIMATES_Feb_2017.pdf

figures for Jan 2017 are 29% also.
http://commerce.gov.in/writereaddata/UploadedFile/MOC_636227776477491263_QUICK_ESTIMATES_Jan_2017.pdf


(Ayush Mittal) #870

Summary from the recent interview of Avanti on ET Now:

The aquaculture is increasing.
The processing plant will start end of this month and we will be concentrating more on Value-added products. We are targeting big food stores of US & Europe.
We are growing at the rate of 25% YOY. We have completed the new feed plant with 100 Cr capex and processing plant with 100 Cr capex. Will be investing 20 Cr in a new hatchery plant.
What about your aim of $1 bln turnover in 5 years from now - Yes, we have target to achieve $1 bln revenue. We are focussing on shrimp industry and are looking at new markets. We are planning to expand in other areas of India like we don’t have processing plant in Gujarat. We want to increase revenues and profit of the company.

http://www.avantifeeds.com/Interviews/Avanti%20Feeds-Interview_of_CMD_with_ETnow_23-03-2017.mp4.zip


(Vivek Gautam) #871

Avanti getting good press coverage now.


(tbhavesh) #872

I did see Dalal Streel Investment writing on it a year back as well…Overall I Agree - after the Investor presentation there has been lot of interest…


(Saji John) #873

Reco by CNBC as a trading bet. So more volatility? Wish it doesn’t succeed as a trading bet:grin: Glad that it being noticed though:smile:


(Sandeep Patel) #877

Shrimp export from India to the US for this Feb and for the two month of 2017 has grown 40% and 33% respectively over the same periods last year.

Source: https://www.st.nmfs.noaa.gov/apex/f?p=169:2:0::NO:::

Note: Trading at rich valuation currently. If you are thinking to enter/add, then please please scroll up and read risks highlighted in Avanti_Risk_Perceptions.pdf by Donald and others in the post above. Everyone must be aware of these risks, should you choose to invest in Avanti at high valuation.


(rvetri) #878

Hi Sandeep

Good you pointed out the valuations. I am not sure how to place Avanti as
an industry category. If you put it as a food product category, then the
valuations become cheap. Just a different perspective.


(kkarimyusuf) #879

Is this a PE re-rating underway / value unlocking / industry reclassification or just bull market froth? How do the esteemed senior investors see this development?


(Mridul) #880

P/e will come down once profits start kicking in from capex from q4. So, don’t look at the trailing p/e. This isn’t p/e re-rating, but just discounting future bigger profits and cash flows imo.


(rvetri) #882

Religare’s latest research report on Avanti