Avanti Feeds

(sarmams) #1143

Further to my post above, I have been able to meet on the ground personnel working in an aqua farm in AP. Following are the details of my discussion:

a) there has been a huge expansion of aqua farms in the region over the last few years. With an initial investment of INR 6 Lakhs per acre and with with min 5 acres of total land, a farmer is able to make INR 10 mln in a year. While he could not share the exact operational expenses incurred by the farmer, final profit margins to the farmer are expected to be in the range of 30% in the first year (could not confirm this estimate). In subsequent years, returns would be much higher as there is no initial investment required and only operational expenses are incurred to run the farm. Returns would come down in a year to the farmer, if there are any adverse climatic conditions due to which one entire batch of shrimp gets wiped out due to some virus attack. And obviously, returns would be higher for a farmer with own land rather than leased land used for farming.

b) in a calendar year, Jan to July/August remains busy months. With the onset of monsoon, output slows down gradually. Climatic conditions are extremely important for the crop (with higher temperatures being quiet favorable) and hence the business in this area is thriving in a big way.

c) farm I visited, was started 3 years ago and has total 40 acres of area dedicated to aqua farming. Owner apparently has other farms as well in other regions and is a very experienced hand. Their godown has been stacked up with Avanti’s feed completely and no other competitor product. When I enquired about other companies product, I was told they have been using Avanti product for many years and they are satisfied with the output. He mentioned, large established farms in the region generally go with Avanti.

d) due to the ongoing monsoon and adverse climatic conditions, 2 crops of shrimp have completely been destroyed by a virus attack in the region (all the farmers in the region have been impacted by this virus attack). In fact, second crop has been washed out after reaching 70 count . Many farms in the region have stalled the culture for a while, as they will undertake cleaning of the pond/tank before putting in new crop (new crop expected to start by end of this month and first batch of shrimp are expected to come out by mid Jan).

e) In a day, feed is provided to the shrimp 4 times initially . As the shrimp grows in size, feed consumption volume rises with a faster turnover of feed inventory. So, farmers stack up at least 2 months of feed inventory at a time. Farmers get a credit period from distributor (though I think, for distributor there is no credit period from Avanti at least during peak season).

f) while going around the area, I have noticed large areas have now been converted to aqua farms. With the rise in demand for Indian shrimp from US, in my opinion, Avanti’s incremental feed capacity is coming at an appropriate time next year.

g) enquired about usage of antibiotics, I have been told it is strictly prohibited. If any farmers gets caught using antibiotics they are black listed and cannot do further business. Hence, large and established farmers do not risk losing complete business and remain highly vigilant. They are also continuously made aware of this risk by Avanti (as they are one of the off takers of final shrimp from the farm).

h) I have been told by few locals that, aqua farming is being taken up in a big way by some of the politically connected personnel and their relatives . And when they are starting this in a new area, they are doing it on a very large scale (like 50+ acres) at one shot. In my opinion, these kind of business men who have the money and muscle power may go with a tried and established brand like Avanti’s feed, while setting up the farm rather than try other brands (though, I may be wrong in my assessment here).

Due to some operational issue in the farm, my contact had to cut short the meeting with me. Hopefully, next time I will try and connect with owner of the farm to get a better picture.

Disc: invested in Avanti and hence biased views. Pls do your own due diligence before investing.

(Raman) #1144

Thank you very much @sarmams. for the detailed information.

(naravi2011) #1146

Promoter sold shares in open market. But the quantity is very less. One can check BSE website http://www.bseindia.com/stock-share-price/stockreach_insidertrade_new.aspx?scripcode=512573&expandable=2

(Vivek Gautam) #1147

Indian exports have dominated the international shrimp trade in the first quarter of 2017, even as farmed shrimp production across the world remained low.

India emerged as the top exporter with a 34 per cent rise in sales volume at 96,921 tonnes, followed by Ecuador with sales at 93,370 tonnes, up 17 per cent.

“The lunar New Year celebration in January and February and spring festivals during April and May in East Asia kept the international shrimp trade steady during the first quarter of 2017, even though farmed shrimp production was seasonally low during the period,” said a report by Globefish, a unit within the Food and Agriculture Organisation (FAO) of the United Nations.

The report Moderate and Positive Production Trends for Farmed Shrimp analysed the market situation until May 2017.

Exports from both the countries (India and Ecuador) to East Asian markets of Vietnam, Japan and China, as well as to the US increased during this period, it added.

Ecuador’s exports to the European Union (EU) were higher, supported by its duty-free status, despite a decline in total shrimp imports in the EU during the first quarter of the year compared with the corresponding period in 2016.

During the first quarter of 2017, shrimp imports faltered in the traditional western markets of the US (minus one per cent) and of the EU (minus six per cent) over the year-ago period.

A strong Lunar New Year demand in the East Asian markets during January and February led to good trading during the first quarter of this year. There were higher imports in Vietnam, China (with direct imports from Canada, India, Greenland, and through border trade with Vietnam) and Malaysia, where local consumption remained high during January and February.

Import trends were positive in Japan (five per cent rise), Canada (two per cent), Russian Federation (seven per cent), South Africa (13 per cent) during the reporting period over a year ago.

The report stated that current supplies of vannamei shrimp are dominated by India, where the full-scale harvests started in June and consisted of large sizes (13/15 and 16/20).

Indian vannamei production had reached 406 000 tonnes in 2016, with total harvest of farmed shrimp at 500, 000 tonnes.

(Vivek Gautam) #1148


(nil_71) #1149

The Marine Products Export Development Authority (Mpeda) is looking at a 10-12 per cent growth in seafood exports in the current fiscal.

According to Mpeda Chairman A Jayathilak, seafood exports in 2016-17 reached a record $5.8 billion and the trends in the ongoing financial year are just as encouraging.

Speaking at the first-of-its-kind interaction with stakeholders from the seafood sector in Gujarat, he said Mpeda has formed 600 farmer clusters across the country under the National Centre for Sustainable Aquaculture. These clusters are completely under the guidance of Mpeda and they will help the agency to export quality marine products.

Moreover, the set up is such that it provides 100 per cent traceability to quality issues in the farms. Such initiatives will help give a major fillip to the export of quality seafood, he said.

The meeting organised in Somnath in Gujarat assumes significance at a time when Mpeda stepped up its efforts to increase the share of value added products in total marine exports from 17 per cent to 30 per cent. According to him, such meetings will benefit farmers directly and avoid the intermediaries from the scene.

Gujarat state government officials, aquaculture farmers, exporters and hatchery owners were among those who participated in the meeting.

As many as 20 aquaculture farmers participated in the event, which also offered a platform for them to establish direct linkages with exporters

(sarmams) #1150

Marine exports continue to rise in September 2017 as well. Growth of ~ 32% y-o-y.


(nil_71) #1151

Benchmark starts trials of disease-resistant shrimp in Southeast Asia

By Matt Craze Oct. 13, 2017 16:42 BST
UK aquaculture technology group Benchmark Holdings says specific pathogen resistant (SPR) shrimp acquired through a company it purchased in Colombia can solve key illness issues such as white spot and early mortality syndrome (EMS)

(Amit Aggarwal) #1152

In my view, it is always better to specify the source when pasting text from a link.


A FB video on how semi-cooked shrimp is made:

(lohiyaakshay08) #1155

Few Observations:

  1. In last quarter promoter sold total 10,000 Shares.

  2. In this month too, promoters are trimming their holding frequently, on every new highs. They sold around 35,000 Shares in last 3 weeks.

  3. Malabar Investment Fund had halved its shareholding from 2.59% in Q1 to 1.20% Q2

  4. Retail Investors increased from 18377 in Q1 to 25353 in Q2.

(gks) #1156

@lohiyaakshay08 how did you get this data? (sorry for not being entirely relevant to the thread)

(Saji John) #1157

Isn’t it what we do(in fact all stakeholders) when valuations get stretched and it’s pf % gets outsized? For business quality, we have to wait for results and management commentary.

(lohiyaakshay08) #1158

You can get that on BSE website

(madhavikkutti) #1159

Here is the exact link: http://www.bseindia.com/corporates/Insider_Trading_new.aspx?expandable=2

(Ankush Rajput) #1160

Peter Lynch once said his weakness was not holding onto winners for long once they became multibaggers. The people here (promoters or directors selling) are not that great investors so they will make this mistake even more. Let us focus on fundamentals, if they remain strong then we can continue to hold and add during correction.

Avanti Feed is one of the few stocks that justify the 50 PE for the amount of growth it delivers.

Disc: Invested, will add more in near term

(hbpank) #1161

Ankush ,
But we need to think about what Promoter knows that we don’t know.

I doubt Promoter would be that naive. Considering the way they have steered company till here.

Disclosure : Invested

(tbhavesh) #1162

Any idea if there is any impact on Avanti?

Disc : invested and no transactions in last 1 year

(Ayush Naulakha) #1163

As per my knowledge about Shimp culture, this shouldnt be of impact as Andhra Pradesh is the leading state in aquaculture.

Hope this helps.

(Tejas Chachcha) #1164

India targets USD 15 billion from shrimp exports by 2022