I think you have used Palisade @risk tool. Can see you have used a student version. How long is trial period. What i had expired within a month. If it holds good for 1-2 years, would like to know and install it
You are right. This is actually a very old excel sheet when i was in b school. We used this in addition to McKinsey’s sheet for valuation. Dont have the risk software but only mckinsey sheets now. I think Prof Damodaran’s website has some link to a free tool though. Maybe check there.
Hi, a stupid question but is the promoter selling his stock in avanti?
No issues sir. Have used their licensed version for professional reasons but could find any version for personal use beyond 1 month trial version. Thinking of writing a Monte Carlo simulation code using R,Python someday
Thank you Donald for explanation with good CLARITY.
Basis my limited affair with DCF, the limitation that I more often than not find is related to being precise with the inputs -rather with all combination of inputs. With multiple variables to be assumed/modeled, the end outcome may culminate into an altogether different shape with every decision being selected/omitted. In short, it becomes an effort to get ‘Objective’ output with the help of ‘subjective’ inputs.
Deepak (@deevee) - Think you have just touched upon an excellent tool/perspective to refine the entire puzzle called DCF based valuation!!!
What I understand/assume is that you are talking about plotting ‘valuation points’ generated out of different possible input/assumption combination to generated Gaussian curve and from thereon deriving a DCF fair value range - say PlusMinus 1 Std Deviation (or some other pre-defined confidence interval).
As said, this looks to be an interesting perspective backed with proven, well-accepted logic. Sort of finding a method in the madness (for lack of a better expression). Will love if you can share more details around this approach. When and how this approach can be applied? Assumptions if any? supporting back testing etc etc.
Thanks in advance,
Avanti has scheduled an Audio Conference Call for Investors on 24th August 2017@ 4:30 pm.
Please click here to see the notification and also the investor presentation for Q1FY18.
More media coverage…but nothing new.
Thanks a lot Pratyush. Very helpful.
Thanks as always for putting your efforts. Just one thing I would like to add here is,
DCF I feel is more suitable for stable companies in relatively developed economies. In country like India where per capita penetration is lower than that of developed nations and in some cases lower than that of world average, I believe it is difficult to use DCF as a tool to make buy or sell decision. It’s more for a sanity check.
I feel almost all the good businesses in India will be overvalued using DCF over a different range of time periods. One very good reason for this phenomenon that Akash Prakash of Amansa Caoital had mentioned in one of the articles is - "In India it is difficult to scale up business quickly because of many reasons that are peculiar to India. Hence any company which is able to scale up and grow at rate faster than the industry, it will always trade at premium." (wordings not exact as per the article, but gist was on similar line)
Hence, as you rightly mentioned not to get obsessed with DCF’s number.
Good point, in the normal course DCF isn’t quite useful except to give us a broad (and hence not so useful) idea about the range of valuations. The utility of DCF (for me) is typically during serious falls. I remember during demonetisation, i ran this on Bajaj Finance, with a discount rate of 9%, the market was pricing in a profit growth rate of 6-8% for next 5 years and 0% post that.
If the DCF shouts value at you, it can be a very useful tool to help you pull the trigger. However during “normal” markets DCF doesn’t help as much.
A DCF supported by a monte Carlo analysis gives high level of confidence that probability of losing money could be very small or very high in extreme conditions by quantifying valuations with an okaish understanding of business . Just saves from mistakes despite lesser knowledge by helping on not at all lucrative to jump n super worth jumping in with a quantified valued tagged for cash flow based stable type of businesses . Else nothing better than knowing business in deep in and out to arrive hidden intrinsic value range which someone without sound understanding of business may not figure out in fairly valued phase which runs usually for longest of cycles between undervaluation , over valuation n fair valuation ranges.This is how I feel a DCF has personally helped me most over last few years . Need few more years of trial to say with utmost confidence
Religare research report keeping a target of Rs 2240/-
With the current positive news/result/sentiment flow on Avanti I am sort of confident that Apex will list positively. But I am in a dilemma trying to take a call whether to invest in Apex.
The ‘investor’ in me says to look at it skeptically and perhaps avoid and not have many eggs in one basket. But the ‘trader’ in me says go with the flow, its always good to add to a winning bet (here the industry).
Wanted to know if any of the Avanti investors are seriously contemplating buying Apex post listing (apart from lucky allotment).
- Invested in Avanti & also investing in Apex
- Invested in Avanti & not investing in Apex
- Invested in Avanti & trying only for listing gains in Apex
- Invested in Avanti & want to get out of Avanti itself forget Apex
- Not invested in Avanti but want to enter this industry in either of the two
Link is not opening. Kindly upload the PDF
Religare Avanti.pdf (696.8 KB)
Also I see Soyabean Price inched a bit but not much, It moved from Rs 24 to 28-29 now. I am sure, Avanti will have a long term contract with its suppliers too. Also all Price increase come with a lag only
It will be interesting to see Q2 Margin. May be in the tomorrow’s call, we can ask the average Soya Price that they are paying now or say is there any % increase in Soya Price. Management may disclose latter than the former
I think Avanti stocks 60 days of Raw Material - so no margin impact in Q2.
UK importers warn of EU shrimp import ban
Importers in the UK have sought New Delhi’s intervention to stop an imminent ban on Indian seafood exports by the European Union (EU).
The EU is apparently unhappy due to increasing incidences of traces of antibiotics being found in seafood products from India. In 2016-17, the EU accounted for 18 per cent of the $5.78-billion seafood exports from India.
The British Frozen Food Federation (BFFF) — which has importers, exporters, brokers and retailers as members — has in a letter to the commerce ministry stressed that a ban on Indian aquaculture shrimp might be implemented in two-three months. “During a very productive meeting on August 8, 2017, with Sarvesh Rai of the Indian Mission to the EU, we were informed that India has undertaken several steps to satisfy the European Commission. The indications we are receiving from the commission are that these are not enough,” John Hyman, chief executive officer of BFFF, wrote to Commerce and Industry Minister Nirmala Sitharaman.
The federation has urged the minister to redouble efforts to appease the commission and to prevent a ban. It has also asked India to overhaul the aquaculture export safety system. The federation has also offered its expertise and perspective to resolve the issue.
There is a real risk that the US Food and Drug Administration, which will look closely at the outcome of the European Union’s review, might review its own import procedures from India. The EU and the US together account for $1.5 billion of aquaculture shrimp exports from India. “We implore you to take this message very seriously,” the BFFF added.
The European Commission is extremely dissatisfied with continued non-compliance and the lack of progress made by the Indian authorities. Last year, the EU had strengthened its inspection norms for aquaculture products from India. Earlier, the norm was to test samples from at least 10 per cent of the consignments. This was raised to 50 per cent in 2016.
Trade sources said there has been an increase in the number of rejections of Indian shrimps because of the presence of antibiotics. The EU is also believed to be directly banning factories whose products have been rejected.
Source : Business Standard 24th August 2017
I went through the earlier thread where it seems fear of ban and its likely impact may not be significant since most of the exporters are trying to de-risk, still 18% of 5.8 BUSD is close to 1 BUSD
I am in the same dilemma myself. I got a lot of information from their draft prospectus that makes me feel confident about what they are doing, and how the business prospects are shaping up. However, what’s holding me back is the lack of geographical diversity. That was the reason why Waterbase got stuck and Avanti was able to move forward, when there were issues in one geographical location.
I think the IPO will sail well, but I am not confident about putting my money in for the long term- especially since I am gravitating towards making large but 2-3 bets a year. Its interesting that the retail portion is oversubscribed and QIB is not showing much movement - but I dont know how to interpret this tea leaf for the better or the worser.