Avanti Feeds


It is PBT because the Rs.16,182.82 number matches between the PBT in consolidated results and the profit before tax as mentioned in the segment results. Please see these two sections in the two tables.



(Rajarshi) #1315

Some positive points on the engagement that Avanti has with shrimp farmers–clearly states how the farmers have benefited by knowing how to handle diseases from their engagement with Avanti…

Farm level engagement
In Andhra Pradesh, publicly-listed Avanti Feeds, India’s largest shrimp feed company which also has a separate joint venture with Thai Union Group called Avanti Frozen Foods, is working more closely at the farm level.

Avanti Feeds employee handles a shrimp at a partner farm in Andhra Pradesh

At one of its ‘partner farms’ Undercurrent visited last week several Avanti employees were based semi-permanently on the farm, carrying out a range of farm duties, such as feeding shrimp, monitoring water quality, and farm upkeep. The owner of the farm had done “very well” financially due to “extreme care” he had taken with farm management, Nikhilesh Alluri, business development manager at Avanti Feeds said. Despite an outbreak of whitespot syndrome at a neighboring farm, his farm had been unaffected.

“They know how to handle it [whitespot] now,” said Alluri. Since building the farm two and half years ago and achieving annual production of 800 metric tons, the owner intends to expand the farm.

(Ayush Mittal) #1316

Super article! highlights several important points as to why Avanti has done so well + due to government regulation and control, the industry has been less exposed to the virus and disease (though the challenges continue due to lack of awareness and un-organised nature of industry/farmers).

@Sandeepg - Apex’s margins are probably higher due to the farming activity. Farming has the highest margins in the whole chain but so are the risks and volatility. For Avanti - the margins would also be a function of utilization rate and their ability to do more of value-added products in coming years (as of now the utilization would have been really low as this quarter is sort of off-season)

Good results by Avanti once again (much above my personal expectation) especially when we compare with the results of relevant peers. Going forward the margins in the feed segment should come down as the raw material prices have been going up. Lets see how much will get negated by the growth in coming times.

(sarmams) #1317

Jan 2018 marine export figures show a growth of ~10% over Jan 2017 levels. Good start for 2018.


(Dheeraj) #1318

(Yogesh Sane) #1319

Company submitted revised segment results.

Revised Segment Results (17 Feb)

Source: https://www.bseindia.com/xml-data/corpfiling/AttachLive/953a0625-2e03-4c82-9d04-12e0fe555006.pdf

Segment Results submitted earlier (9 Feb)

Source: https://www.bseindia.com/xml-data/corpfiling/AttachHis/be3a2dda-1866-48d1-a506-439fdb3fc6ff.pdf

As per the latest revised results, processing business did well in Q3 but these results are still slightly different from the ones submitted 1 year ago.

Segment Results Submitted 1 year ago

Source: https://www.bseindia.com/xml-data/corpfiling/AttachHis/F7CA6AD0_8D96_4DEB_A251_DE77F1F939B8_175248.pdf

(shikhar mundra) #1320

can u please post the gist of the article here…its asking to register otherwise

(learner619) #1321

Avanti con call today or 21st Feb @4pm ist. More details on BSE site

(shikhar mundra) #1322
  1. expansion in margins mainly due to decrease in RM prices and volume growth.
  2. fish meal prices have increased by 20-30 percent from November. Current pricess – 120 -125 /kg
  3. soya prices have increased by 20- 30 % from January , Current prices – 43-44 /kg
    4.with increasing RM prices do we have a price hike on our cards?
    Ans- We will be careful about the increase in final product( feed) prices as viability from farmers point of view is important
    5.what have we done diff?- typical question , answer known
  4. hatchery segment what are we doing – setting up phase 1 – 200 mn seed capacity plant followed by phase 2 of same capacity. Wont be much revenue or profit accretive, just for establishing Avantis name in seed business., seed market is 80 bn seed, they are capturing up an insignificant amount as of now
    Why are we not aggressive in hatchery? - Want to prove the product first and establish good quality
    Hatchery to be watched out next year…
    Margins expected in this business – 8- 10 %
  5. competitors are undercutting prices and giving credit , have done huge expansion , what will be adverse eefect on us? – couldn’t here answer due to line cut
  6. processing side – will do 60 -65% capacity utilization in next year for the new unit , and 90 % for the older unit
  7. plan to achieve 90 % capacity utilization for feed in FY19 , therefore vol targeted = 5.4 lac MT.(6 *0.9)
    Can sustain 15-20 % growth in feed business
    Can even achieve 95-98% peak utilization in our facilities
  8. industry growth rate expected 10-15 % easily.
  9. huge tailwinds in industry, only 14 % of land available for aquaculture is used . Hence great scope for industry to expand with greater gov focus also.
  10. sea food consumption increasing gradually , farmed seafood is increasing rapidly.
  11. economics for farmers – it cost Rs. 360 to produce a 30 count shrimp , ( 40 -45% is cost of feed)
  12. in exports – 91 % was product sales , 9 % export incentives.
  13. over capacity prevails in feed segment, consumption was around 11 lakh last year. , many plants are running at low utilization.
  14. do we have any secret formulation? Anyone can make std formula but nutrition is important for feed growth. We have the best feed conversion ratios in industry.
  15. in feed segment what is the customer profile
    Ans- 30 % belong to corporates, ( 15-16 customers are present) , 70 % - belong to retail farmers( 185 farmers are present)
    We don’t see any risk even if the corporates are setting up new feed capacities for themselves.
    Need to dig more for the above threat, will buying feed from Avanti will be more economical for corporates or setting up their own feed plant. Need to evaluate the cost saved by using better quality Avanti feed vs cost saved by manufacturing their own feed.
    Disc - Invested

(Sandeep) #1323

With no risks acknowledged even by the management, it looks a great ooportunity to invest more during this phase of correction. Any other thoughts?

(@AnyBodyCanFly) #1324

Few thoughts on Avanti Feeds - stock price & earnings:

  1. Potential to end FY18 & FY19 with an EPS of 110-120 & 140-150 respectively.
  2. Becoming an integrated player in aquaculture covering seeds, feeds, shrimp
  3. Candidate for another stock split in time to come, though its not advisable unless very strong growth visible
  4. China market could set the trend for the sector which has potential to give considerable pricing power to the integrated players
  5. Strong cash situation could give it a great opportunity to grow beyond India which can become a trigger over within next couple of years.

Disc: Invested.

(ValueInvestorAP) #1325

Too many moving parts to this. But any kind of trade war between two of the biggest economies can certainly have some price impact on price of soybean (25% of RM cost of Avanti Feeds).