Thanks for the update Sagar. Can you share with us, where you got the results from? I couldn’t find it in the BSE/NSE site or ResearchBytes.
Thanks,
-Prasanna
Article mentions Vannamei Shrimp Leading India’s Seafood Exports
http://www.thefishsite.com/fishnews/24941/vannamei-shrimp-leading-indias-seafood-exports
Another article mentioned India as Top Prawn exporter to US in period between January 2014 and November 2014 - a total of 99,566 tonnes of prawns.
http://www.thefishsite.com/fishnews/24926/india-top-prawn-exporter-to-us-in-2014
Sales are up 38% yoy
Profits up 53.7 % OPM 12.3% vs 11.6% Raw material cost is up 31.6% 9 month EPS 103.83 vs 60.83. Assuming Q4 EPS of 25+, full year EPS will be around 130 and a dividend of 25rs. At CMP of 1675, it trades at around 13x FY15 earnings. As I said in my last post, I expect them to slow down from Q1FY16 because of capacity constraints.
Does anyone here have any insights into how to read the export sales de-growth?
From what I understand, it’s primarily due to shrimp prices softening and hence impacting the company’s shrimp processing revenue. The next few quarters will be a key test of how much shrimp price softening impacts the growth of feed sales. The rate at which Avanti has been growing, it can withstand a little bit of headwinds.
Fantastic growth story, still available at reasonable valuations, iff the company jumps past the shrimp price hurdle.
Disclosure: Very long.
Avanti has posted good result but its interpretation is not easy.
Even after good result, investors are divided into 2 parts. One group will hold / add and another group may reduce. Both groups have their own valid arguments. I want to list some of the facts related to business here which shall be useful in further decision making.
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Avanti has been 62x in last 5 year, 17x in last 3 years. It is not undiscovered stock.
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Avanti’s top performance is attributed to management’s execution skills and shrimp international price during this period.
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Current capacity utilization is running high so further topline growth is difficult to achieve without new capacity expansion.
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Topline and bottomline base looks high for next financial year.
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Exports are less likely to be soft if not bad. That is the most important factor at the moment which will direct further.
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Avanti’s domestic performance is satisfactory which shall continue to deliver. Any new value addition by promotors will ignite fresh momentum.
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Historically December qtr has been slow.
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For the last couple of months supply is very limited which resulted recent shrimp price hike by 7% in a week.There is an average increase of 10-15% in prices in local markets during last three months.According to reports in Asia, farmed shrimp production is likely to decrease in the coming months.
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If march qtr is better than expectation then Avanti will reclaim its lost glorious stock move.
TTM EPS is now 119.7 and to cross 20 PE it has to touch 2400. I am putting on hold and may add more in case of bargain opportunity.
Kunal
Avanti Feeds was delisted from NSE because of some regulatory requirements regarding Paid up capital and Market Cap and now it cannot be traded on NSE. Hence, there was panic selling and this seems to be the major reason for the steep decline in price.
There was a message on MC by one of the boarders. I am adding the link for the benefits of the members
Does anyone have any idea if it can again get relisted on the NSE for trading. The relisting back on NSE itself can act as a big booster for the stocks price.
What i learnt from friends is, Avanti was allowed to trade on NSE as it was earlier listed on Madras stock exchange and listing on NSE was through some kind of agreement (between MSE and NSE ?).
Now that MSE has stopped, this facility for NSE listing too has been stopped for Avanti.
But avanti board on Jan-31’st board meeting has already decided to list on NSE.
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=dccf0546-61ff-4089-8f0c-650c12b4d1fa
I hope this helps to calm down the nerves.
Avanti feeds have come down from 1800’s level to 1600’s because of this. It may again take a good jump only on it again listing on NSE.
Does anyone have an idea how long does it take for a company to get listed on NSE (especially since Avanti was already trading on NSE )
Avanti Feeds prepares for opening of third aqua feed mill
On to the negatives there may be short term correction bcs of reports of RMS in Tamil Nadu and farmers thinking of moving back to Black shrimp from vannamei but for feed producer it should not be much of a problem
Story for next 1-2 years remains intact with supply shortages and the India`s shrimp industry itself expected to grow at high double digits
Thanks Rokrdude for sharing the link. I think the current capacity is 210,000TPA after the last expansion of 70000TPA.
“Avanti Feeds has been operating two feed mills in Gujarat and Andhra Pradesh with a total production capacity of 140,000 tonnes/year which is close to 60% of India’s total capacity.”
^^ It’s an oldish news article from April 2014.
Indian shrimp exports to touch Rs.27,151 crore by 2017
The study has stated the exports in the coming years are expected to rise by 36.71 percent in volume and 92.29 percent in terms of dollar valuation.
Indian shrimp exports in 2013-14 accounted for 301,435 tonnes valued at $3,210.94 million and the volume export of cultured shrimp grew by 31.85 percent in the time period.
Does anyone know more about this news: http://www.newindianexpress.com/states/kerala/Massive-Prawn-Deaths-Put-Farmers-in-a-Spot/2015/03/06/article2700206.ece
The stock has been silent for last a few months. Results has been excellent.
Avanti is a clear beneficiary of this year budget giving addl 35% depreciation n 15% investment allowance benefit of new investment to come up in AP n Telengana. So hopefully their expansion plan of feed capacity and hatchery n processing should avail these benefits.As such Fy 17 should be a real bumper year and even FY 16 shud be good.
Also AP govt has declared Aqua as agricultural activity. So will this imply zero income tax benefits ala Kaveri? Any hitch in that n what’s the status? Central govt too wanted to have a blue revolution.
Brand pull of Avanti products seems to be v strong so is the co working on negative working capital like a FMCg n as such PE shed improve further.
Alluri Indra kr,MD has 2 sons in 20s who are coming to business so chance of a sell out seems remote.
This controversy over NSE listing is giving an opportunity to back up the truck and load imho.It is sure to be listed at NSE and should again zoom post listing.
Views invited.
Hey everyone,
AF has been in my portfolio since long. We first bought at 500/share. Q3 was very strong but this NSE delisting and the selling out of Dolly Khanna has cast some unnecessary doubts on the stock.
I believe the company will continue to grow at 25% cagr for next 3-5 years thanks to some very basic scenarios:-
1- Sea production of shrimp has been falling rapidly since 2006 thanks to over fishing by the Japanese and other Asian countries.
2- The demand is insatiable from the US & EU. While recently trend suggest that even Indians and other asian countries have increased shrimp consumption thanks to rising income levels.
*Basically, the demand is insatiable and the supply is very limited. Thats the sole reason AF has been growing at 50-70% over the last 3 years. The technology support from TUF is another major positive for AF.
Thinking market cap of AF and the total market size where it caters…they sky is the limit to where the company could reach someday!
As of now, I am happy that they control more than 60% of Indian market.
The future of this particular business is extremely positive provided the company can steer clear off diseases.
Cheers
Neil Bahal
Is there further growth in Avanti Feeds? for the 10 next years
Folks, Avanti just seems as interesting now as it was then