Kings Infra Ventures Limited is a focused aquaculture company with activities in aquaculture farming.
They are involved in the operations of shrimp hatcheries, grow-out farms, contract farming, feed distribution and other ancillary services related to aquaculture. They cover the entire aquaculture value chain right from broodstock to packaging, branding and marketing the end product. It operate aquaculture farms in Tuticorin, Tamil Nadu.
CMP - 135
P/E- 27
Website - http://www.kingsinfra.com/
PROMOTERS-
- Mr. Shaji Baby John, Chairman and Managing Director
- Mr. Baby John Shaji, Joint Managing Director
FINANCIAL HIGHLIGHTS-
Important Highlights -
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Plan to launch a subsidiary in US to increase exports
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Direct exports started in Europe via subsidiary in Spain. This is driving margin improvements as compared to exporting via intermediaries.
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Maritech Eco park will add about 1600 tons in annual capacity once Phase 1 is completed in about 18 months. State-of-the-art technology which will drive efficiency and high output.
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Exports to US had slowed down due to high working capital requirement in the past owing to introduction of countervailing duty. This is expected to improve once Kings launches a US based subsidiary in the coming months and will then help increase US exports.
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Capex plans:
– 35-40 cr for developing 150 acres of aquaculture ponds (which should double capacity over 1-2 years)
– 20 cr for food processing facility (5cr govt subsidy available)
– Maritech ECopark around 170 cr for Phase 1. Out of this 24cr has already been infused. 36cr more to be infused via equity and 110 cr in Debt to be raised (Interest subsidy upto 3% is available via FIDF/NABARD)
– Kings Frigo + Bento (retail brands under Kings Infra Ventures Limited ) around 25cr to be funded via internal accruals over 3 years -
Working capital requirement as % of sales should improve in the next 2-3 years as company starts exporting directly via their own subsidiaries, uses bill discounting and improves production efficiency via SISTA 360 technology
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Company is working towards placing their largest shrimps (~80gm) in the high-end premium category in US supermarkets. This will enable them to fetch significantly higher prices (around 2x the usual) and thereby improve margins.
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Company is aggresively looking to monetize its land parcels which are not in use. Management expects to fetch about 150cr over the next few years via this channel. This is a great boost for the company in terms of reducing debt and having sufficient working capital for growth.
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Management expects to increase total capacity from 2600 tons in FY25 to 3400 tons in FY26 and 5500 tons in FY27. Capacity utilisation is expected to hover around 90%
Potential RISKS -
- 50% revenue contribution from China - Too much Reliability on China
- Due to Ecuador’s unsustainable and inefficient practices earlier, Kings Infra’s sales were effected. This may happen in future again.
- The land parcels that the company is looking to monetise may not turn into effect easily.
- They have an aggressive capex plan which will need a preferential round as well as more Debt.
Disclosure - Invested
