AVT Natural Ltd

insider trade: Acquisition of 43,783 equity shares worth Rs 11.81 lacs by promoter groups

insider trade: Acquisition of 4,616 equity shares worth Rs 1.20 lacs by promoter groups on 15.03.2019

insider trade: Acquisition of 26,634 equity shares worth Rs 6.90 lacs by promoter groups

The article is on Synthite industries which is a leader in this segment.

https://www.outlookbusiness.com/specials/the-power-of-i_2017/indias-tastemaker-3621

Hi Mahesh,

Hope all is well! Are you still tracking the company? What are your current views on the company and any new developments for a few years and future outlook that you can comment on? Thought the annual report was very informative. Thanks

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Hi Sahir, I’ve just begun researching AVT and noticed this thread seems fairly inactive.
The company seems well positioned for growth under its young CEO.
Would you be willing to share any of your more current research on the thread. I will do the same as I start the process.
Ive noticed that the big players in this space like Gavaudun, IFF and Symrise, probably don’t see AVT as a competitor yet, but they are a good proxy’s for AVT’s long term potential.

Hi Arjun,

Unfortunately, I have misplaced by research doc I made on AVT Natural but found the one with the questions I had. Did this a few months ago, some of the questions were answered too but I have no idea because I stopped tracking it but you might find these useful. Sorry for the delay and wish I could give you my research doc. I Will send it to you as soon as I find it

Why are the margins varying so much?
All these products, do you require to use them immediately or can they be stored over time? What is their inventory storage?
Proper facility if they have that they don’t depend on rain
How much of the raw material do they grow themselves? How much do they buy?
How much of the change are you seeing in the makeup industry?
Where is the growth coming from
What new products
What is the safety stock you maintain?
How much more can the margins contract? Worst case
How much can they expand? With new products?

Hi Sarita,

AVT is very much alive and worth buying in my opinion. But don’t take my word for it. Do some digging.

That being said:
The company has a very long track record in the oleoresin industry, is family run with very ethical management that also owns other very successful privately held companies, and seems to be at an inflection point. Namely, they are expanding from commodity goods into value added goods that they would sell directly to customers as opposed to through wholesale. It is similar to the process that companies like Marico and Godrej went through in their early days.
This inflection point is further evidenced by a healthy percentage of R&D spending over the last few years, vertical integration of their supply chain and an increased role of Rahul Thomas, the Chairman’s son. He currently leads marketing and sales but will be successor to his father over time.
This recorded general meeting gives you a good understanding of the demeanor of senior management.
https://www.avtnatural.com/shareholders-information/#sec8

The opportunity here is a 5-10 yr bet that the stock will be lifted by both steady earnings growth and multiple expansion as they transition from commodity player to value added product player. It’s currently a 2% position in my portfolio putting it in the “riskier plays” category of Indian companies I own.

Cheers,
Arjun

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