Avanti Feeds


(Ayush Mittal) #1578

Very interesting data. Thanks for promptly putting it up all the time. It has been very helpful

Data gives more credence to claims of the managements in this industry that probably things are not affected and as bad as reported in media. Or may be we need to see the data of may also. But what a panic it was!

Like rightly mentioned by you, the evaluation from here has to be based on normalized margins, growth prospects and valuations.

Disc: I don’t like to discuss my trades but just because I have been very active on this thread thought of mentioning…have reduced a bit of my position today given the high allocation i had. It was very uneasy to go through such wild swings
Please take your own call or consult an investment advisor


(Rohit) #1579

Even if volume growth continues , prices are down by 15-20 % , both will offset each other, and we may not see good revenue growth and due to higher RM prices , net profit margins may come down (approx 10 %). So obviously the EPS would be down 10-20% from current year EPS of 98. If we consider EPS of next year around 80-90 , stock is trading at 20 PE @ 1800 rs. which seems fairly valued ,considering no growth.

Please correct me if you find any flaws in my understanding. Thanks


(Abhishek) #1580

I must say well played Ayush Mittal …u were a guiding force throughout the journey… hats off to ur courage & conviction…


(rajput.delhi) #1581

The only flaw is that you are assuming a few variables only and assuming they would stay constant for the rest of the yr/beyond. Some people say that after a sharp correction things usually revert to mean and if that happens then RM prices can fall and end user pdt prices can rise and the extent of both can vary. I have heard people say incl the management that last year was an exception but can anyone say with a high conviction that it won’t be repeated in future!!! Apart from prices there are many other variables which can also play a key role in future in deciding what happens to the performance of the industry and its key constituents. This thread has captured almost all at various points. If your investment horizon is short term then estimating Avanti’s performance can be quite risky like you have mentioned based on a few variables but if it is long term then the probability of going wrong is less even with a flawed analysis…just like it happens in the case of any strong company bought at reasonable valuations. And Avanti is a very strong company. Rarely do you find a company as an indisputable leader in its industry with such phenomenal ratios and an ideal combination of quality parameters. Yes, these could change in case of a structural disruption but are we seeing one!!

PS: It’s interesting to see existing long terms holders getting rattled some have sold a bit, some completely (means superinvestors are also human :grinning:) and some others using the bright light of hindsight saying it was wrong to see Avanti as an FMCG company. But I am glad that they all know just like I do that we can all be wrong and in such forums it is always good to share a balanced view.

Rgds
RR
Disc: Biased, invested and added more


(Ayush Mittal) #1582

Of-course! I agree with your thoughts. I still maintain that its an excellent and rare company with a superior product which has a good recall and market share of over 45% (and they continue to gain market share) and superb leadership, execution etc. In a span of just 7-8 years or so, the company has scaled up from 100 Cr turnover to 3300 Cr turnover with net cash on balance sheet of 500 Cr+. For FY18 they are paying out a dividend of 80 Cr+ and yet people often call it a commodity etc.

My action has been more from the perspective of high allocation and the underlying risks of the industry. And I continue to remain invested :slight_smile:

Regards,
Ayush


(Rakesh ) #1583

Avanti is seeing huge volumes in last 2 days, which are highest in last one year.

https://blog.marketsmithindia.com/chart-day-comeback-sight-avanti-feeds-soars-20/

@rajput_delhi
“PS: It’s interesting to see existing long terms holders getting rattled some have sold a bit, some completely (means superinvestors are also human :grinning:) and some others using the bright light of hindsight saying it was wrong to see Avanti as an FMCG company. But I am glad that they all know just like I do that we can all be wrong and in such forums it is always good to share a balanced view”

You have summed up thread’s recent replies very well. :grin:

I feel one thing to keep in mind is “Rarely do you find a company as an indisputable leader in its industry with such phenomenal ratios and an ideal combination of quality parameters. Yes, these could change in case of a structural disruption but are we seeing one!!”

Avanti has always seen extremes of valuations on either side. Important is to stick to great business at reasonable prices. Yday it gave excellent opportunity to enter for long term.

Regards
Disc- major part of PF, invested and added more in recent fall.


(Ankur Lakhia) #1584

I think that a fall like what we witnessed in Avanti is not just a panic selling and a “V” shaped recovery. Usually, fall like this lingers on for quite sometime and it takes considerable amount of time for price to stabilize and come back to its sustainable growth rate. It is like getting bed ridden after an accident. Recovery takes time. Hence, I think that this is the time to look at portfolio weight of Avanti & take advantage of price rise to reduce percentage allocation of Avanti in portfolio to single digit.
Disc: No holding, held in past but sold fully last year, intend to buy again but not in near future.


#1586

Record date for Split and Bonus : 27th June, 2018.


(akash123) #1587

Thanks Ayush sir , your article is amazing … Can I please request you or someone else to throw some light or start a new topic on oceanaa biotek … Disclosure : exited at 147 , current quarter results were kind of rocking and currently valuations seem to be damn attractive … So did some trading( btst) in it lately …

Regards ,
Akash


(Rahul B) #1588

From Apex Con call regarding Industry Update

Now coming to Industry update: As you know there are a couple of variables that are key in
our business. The first is the demand-supply scenario globally and the resultant pricing of
finished products, which is Shrimp prices. The second is the primary producers sustainability
matters.

On the demand-supply scenario, the last financial year started with high demand, however,
towards the second half, we saw a tapering off of demand due to the extended winter. Parallel,
the supply of shrimps increased due to increased production by India and on-streaming of
supply from South-east Asian countries. This resulted in a correction in prices of shrimp,
which started in the second half year of FY „18. As of now, shrimp prices on an average might
have corrected in the range of 15% to 20% year-on-year. Now, while this may have an impact
on realization and in-turn on revenues, we believe that such price corrections could lead to
increased consumption of shrimp and thereby boost the volumes sold. We are already starting
to witness a gradual pick up in the consumption in the past four weeks and are foreseeing a
strong pick up again from Q2 of FY„19 onwards. As far as the profitability is concerned, our
margin, as also displayed in Q4 of FY‟18, does not get impacted hugely as price corrections in
shrimp are normally passed on to the primary production level.

Now, on the primary producer’s sustainability, as you must have read, farmers have seen a fall
in farm gate prices as a result of the aforementioned demand-supply scenario. While this may
be true, but it has not yet translated into farmers moving out of the business. In fact, some
states have decided to support the farmer community by supplying electricity at a unit rate of
Rs. 2. Furthermore, we believe that there is significant headroom for cost rationalization at the
farmers end which once implemented would arrest the margin erosion for them. We are
hopeful that the situation would stabilize soon.


(kumarshah) #1589

Soybean traders watch prices in the JUL18 contract tumble to sub-$8.90, a level the market hasn’t seen since March 2016. From a technical perspective, some are saying the low back in November 2015 could be in play just below $8.45 per bushel. New-crop NOV18 prices are down heavily again this morning and now pressuring the $9.00 level. Trade relations with the Chinese and greater uncertainty about NAFTA are clearly creating continued headwinds and extreme pressure.


([email protected]) #1590

Please ignoe my naive question.
Soyabean is one of the raw material and if the prices go down would that not be positive.
Am I missing something.


(nil_71) #1591

Avanti sources its RM domestic market only and also Import of Soya bean is highly import negative given the duty


(Rajarshi) #1592

(donbox5) #1593

http://www.cnbctv18.com/videos/economy/confident-of-10-15-growth-on-the-topline-says-avanti-feeds-160001.htm

Indra Kumar, Chairman, Avanti says:
+ves
a) shrimp feeds : the capacity is at 90-95 percent
b) shrimp processing : total capacity: 22000 tonnes, the old plant ( 7000 tonnes ) is running with 100% capacity, the new plant (15000 tonnes ) is running at 60 percent capacity
c) he is confident of 10-15% growth on the topline

-ves
a) fish meal, soya prices are now softening but in the last two quarters they had increased


(nabendu) #1594

(himan02) #1595

Amid a trade dispute with the U.S., one central Chinese province has ordered its farmers to more than double their soybean acreage. China is the world’s largest consumer of soybeans and the destination for well over half of U.S. soybeans.

We know the scale with which China can operate and this move to increase the Soybean production can take a toll on global Soybean prices. Lower Soybean prices might results in lowering input costs for Avanti in some of the near future quarters. This can be positive support point for business this year and next when there are too much apprehensions around Shrimp pricing.


#1597

Avanti Feeds: Expects China To Become A Major Market For Indian Shrimp Producers


(tbhavesh) #1598

(saurabhsharmaa2020) #1599

https://mp.weixin.qq.com/s?__biz=MzU0NDAzNzcxMA==&mid=2247492282&idx=1&sn=3f9807b33ed2cfccd1b1200362249afe&chksm=fb00ec9bcc77658d7540a3a850cf9fddeaaa599dd292c03adf7cd41ceb3af6d798f770d7afa2&mpshare=1&scene=1&srcid=0627iLmTPJBDvht15NPfGwf6#rd