Tag: Avanti Feeds

US senator urges trade body to take action after report alleges violations by Indian shrimp industry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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An American Senator has sought action from the US Trade Representative alleging that the shrimp imported from India relies on forced labour and is “pumped full of illegal antibiotics”. Senator Bill Cassidy’s request on Wednesday followed the release of an Outlaw Ocean Project’s whistleblower report on the safety of shrimp imported from India into the US.

“Indian shrimp relies on forced labour and is pumped full of illegal antibiotics. The USTR needs to act to ensure American consumers are not put in harm’s way,” the senator said. “Today’s report outlining the abuses at Choice Canning Company’s shrimp processing factory in India makes clear why Indian shrimp does not belong on the shelf alongside Louisiana shrimp,” said Cassidy, who represents Louisiana in the US Senate. Last year, Cassidy had introduced two bills to protect Louisiana shrimp against India’s shrimp and its export into US markets.

The Prioritising Offensive Agricultural Disputes and Enforcement Act and the India Shrimp Tariff Act are aimed at protecting the Louisiana agricultural industry. According to the report, Joshua Farinella, an American, returned to the US after quitting his job with a company in Andhra Pradesh’s Amalapuram and filed whistleblower complaints to several federal agencies.

These written complaints allege a variety of food safety and labour violations, including that his company knowingly and illegally exported shrimp that had tested positive for antibiotics to major American brands in violation of federal law. Choice Canning has also strongly denied that it has ever shipped shrimp containing antibiotics to the US, the report said.

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Avanti Feeds begins commercial production at new feed plant, two weeks after flagging demand concerns

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Avanti Feeds” isinid=”INE871C01038″ bseid=”512573″ nseid=”AVANTIFEED” sector=”Aquaculture” exchange=”nse”]

Leading seafood exporter and shrimp feed manufacturer Avanti Feeds Ltd. announced the start of commercial production at its new Rs 125-crore manufacturing facility at Bandapuram in Andhra Pradesh.

Interestingly, the announcement comes just two weeks after the company had flagged demand concerns in the US, Europe, and China during a post-earnings conference call.

The new facility has an overall production capacity of 1.75 lakh MT

With this expansion the total shrimp feed production capacity of the company has increased to 7.75 lakh MT.

The Hyderabad-based company is a leading producer of shrimp feed. It operates with a coherent supply chain and a farm-to-fork model using a vertically integrated infrastructure of aquaculture farms, feed mills, hatcheries and processing plants.

The company also exports feed products to Sri Lanka and Bangladesh.

Farmers are considering a crop holiday in the first half of the calendar year 2023, which can hurt feed demand, according to the management.

The company admitted to losing market share during the quarter, adding that it failed to capitalise on the strong demand for shrimp feed. State government pricing was also a major pullback.

Shares of Avanti Feeds are trading 1.4 percent higher at Rs 402.70.

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Moneycontrol Pro: Avanti Feeds in focus, here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sharing a few ideas for profit from Moneycontrol Pro, Sachin Pal of Moneycontrol.Com spoke about a stock that he is tracking closely, Avanti Feeds.

The company is the largest shrimp manufacturer in the country with a market share of around 45-50 percent. The company has a topline of around Rs 4,500 crore of which around 80 percent comes from the shrimp business and the balance 20 percent comes from export of processed shrimps to US, Europe and other countries.

The performance of the business in the last 18 months has been quite decent despite the COVID-19 disruptions. However, the margins in the past couple of quarters have taken a major hit due to sharp rise in input cost as well as surge in container freight rates and shipping trade.

The company has been facing some growth challenges since 2018 due to prolonged slump in the global shrimp industry. However, things are shaping up well for the business as there are green shoots emerging in the sector due to reopening of the global economy as well as the reopening of bars and restaurants across various countries.

The management is also looking forward to diversifying its presence into the fish and pet feed market, which could turn out to be a very good growth engine in the next couple of years.

The stock has been a very large underperformer in the last 18 months and is still down around 40 percent from its all-time highs. Investors can look forward to go long on this stock as Avanti Feeds is one of the best plays in the global shrimp industry.

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This multibagger fisheries stock has delivered over 37,000% returns in 10 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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One multibagger that has proven everyone wrong at the Street is Avanti Feeds. This company, primarily engaged in exporting shrimps, has delivered unbelievable returns of 37,430 percent in the last 10 years.

In fact, in the last one year, the stock has risen 95 percent. Moreover, it has climbed to Rs 622.90 as on February 13 from Rs 1.66 on December 31, 2009.

Interestingly, foreign institutional investors (FIIs) have also increased their stake in the stock. In December 2019, the FII holding rose to 15.69 percent from 13.93 percent in September 2019.

The stock is further looking at a much bigger rally especially after the Finance Minister during Budget 2020 announced that the government is aiming to raise the fish production by 200 lakh tonnes. This will come as an even bigger boost for the sector that will receive increased revenues.

In the case of earnings, the company saw a net profit drop of 35 percent year-on-year (YoY) at Rs 47.85 crore in the quarter ended December 31. Meanwhile, the total income increased by 11 percent YoY.

Edelweiss in its recent report said, “The Shrimps processing business has reported healthy sales growth of 14.8 percent YoY at Rs 232cr on account of improvement in its capacity utilization. We expect the capacity utilization to improve, which expected to deliver volume growth of ~12 percent in FY20.”

The report further stated that the shrimp processing business had reported healthy sales growth of 14.8 percent YoY at Rs 232 crore on account of improvement in its capacity utilization.

“We also expect to achieve a sales volume of 14,300 MT with an improvement in its capacity utilization to 65 percent in FY20,” it said.

The brokerage maintained a ‘buy’ rating on the stock after it took benefit out from the corporate rate cut.

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This hidden gem has rallied 164% in 5 months; do you have this stock in your portfolio?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In August last year, this small-cap stock stood at its six-year low, and today it has bucked the trend by climbing 164 percent. Avanti Feeds is the leading manufacturer and exporter of fish feeds like shrimp and prawns. Established in 1993, this company was first listed in 2010 at around Rs 26 per share and rallied up to Rs 3,395 in 2015.

This year, the stock has already jumped 26 percent in just 11 trading sessions. The rally this year was supported mainly by India Ratings and Research that affirmed the company’s credit ratings on January 1.

Avanti Feeds trades on a P/E ratio of 26.9x, which is above its market average of 13.8. Its net cash position supports a higher P/E ratio, as does its solid recent earnings growth. With net cash of Rs 9.7 billion, the company has a very strong balance sheet. Having said that, at 11 percent of its market capitalisation, the cash hoard would contribute towards a higher P/E ratio.

In Q2FY20, the company reported consolidated sales of Rs 1,064 crore, up 41.1 percent year-on-year (YoY) on account of 51 percent growth in Avanti’s shrimp feed business and 15 percent sales growth in the shrimps processing business.

EBITDA (earnings before interest, tax, depreciation, and amortisation) rallied 79 percent YoY to Rs 129 crore with the margin expansion of 260 bps YoY at 12.1 percent. This was primarily due to the expansion in the operating margin of the feeds business. The consolidated net profit of the company more-than-doubled to Rs 127 crore from Rs 55 crore in the year-ago quarter. The company has taken the benefit of the corporate tax rate cut.

The shrimp exporter’s valuations are also very comfortable allowing the investors’ entry point, with P/E at 26.95x, return-on-equity of 23.11 percent and the debt-to-equity ratio at zero.

Edelweiss in its recent report on Avanti Feeds said, “We expect the company to achieve sales volume of 14,300 MT with the improvement in its capacity utilisation to 65 percent in FY20.”

It further stated that in Q2FY20, the average shrimp prices (Mexican Shrimp -30 count) in the international markets have reached $13.1/kg (up 10 percent YoY) resulting in the domestic farm gate prices at an elevated level of Rs 430-450/kg, benefiting the sector.

The brokerage firm has revised its earnings estimates by 12 percent/13.5 percent for FY20E/FY21E, respectively.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Avanti Feeds jumps 16% on strong September quarter earnings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The share price of Avanti Feeds rallied 16 percent intraday on Tuesday after the company reported strong September quarter earnings.

Intraday, the stock jumped 15.72 percent to Rs 471 on the NSE. At 12:55 pm, the stock was trading 11.39 percent higher at Rs 453.70.

The shrimp exporter’s consolidated revenue from operations this September quarter rose 41 percent year-on-year to Rs 1,064 crore as against Rs 754 crore in the corresponding quarter last year.

Profit after tax surged to new heights with double the figure in the company’s books this year. The consolidated net profit of the company jumped 131 percent YoY at Rs 127 crore this year as compared to Rs 55 crore last year.

Earnings before interest, tax, depreciation, and amortisation rallied 78 percent YoY at Rs 150 crore as against Rs 84 crore last year.

Despite the increased cost of raw materials, inventories, and other expenses, the company’s sales helped offset the other overhead costs last quarter.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

These BSE500 stocks turned Rs 1 lakh investment into Rs 1 crore in 10 years. Do you own any?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Over 300 stocks in the BSE500 index have delivered positive returns in the last ten years. Of these, 8 stocks have jumped over 10,000 percent in the given duration, which means, a Rs 1 lakh investment in these stocks would have turned to Rs 1 crore by now. In comparison, domestic equity benchmark Sensex has rallied over 150 percent since 2009.

These stocks include – Avanti Feeds, Bajaj Finance, Relaxo Footwears, Astra Poly Technik, PI Industries, Westlife Development, La Opala RG, and Symphony.

Avanti feeds surged the most in a 10-year period, up over 30,700 percent. The stock which traded around Rs 1.2 per share in July 2009, is currently trading around Rs 335 per share. So, a Rs 1 lakh investment in the company in 2009 would have become Rs 3 crore today.

For Q4, Avanti Feeds reported a revenue of Rs 858 crore, up 2.8 percent. Profit reported was Rs 76 crore down 11.4 percent Y-O-Y with the margin at 20.7 percent (contracting by 255 basis points Y-O-Y) due to a 6.2 percent increase in raw materials.

“Despite lowering volume assumption in feed segment to factor decline in the quarter, revenue and PAT is expected to grow at 14 percent and 20 percent CAGR over FY19-21. We roll forward to FY21, continue to value at 15 times considering healthy growth and return on equity and no debt, maintain a target of Rs 427 with a Buy rating,” Geogit Securities said in a report.

Bajaj Finance was the next name on the list, up over 24,100 in 10 years. The stock which traded around Rs 14 per share in July 2009, is currently trading around Rs 3,530 per share. So, a Rs 1 lakh investment in the company in 2009 would have become Rs 2.4 crore today.

For Q4, the company reported a 57 percent jump in its fourth-quarter consolidated net profit at Rs 1,176 crore as against Rs 748 crore in a year ago period. Global brokerages like Morgan Stanley, Deutsche Bank, Credit Suisse, and Jefferies also increased their target price for the stock for a 12-month period.

“Going forward, Bajaj Finance remains well-positioned to deliver sustainable profitable growth driven by strong customer acquisition engine, increasing rural footprint with the diversified product offering, the rising contribution of fee income, superior asset quality with capital adequacy ratio (CAR) of 21 percent,” JM Financial said in a report.

Relaxo Footwears advanced over 18,460 percent in the last 10 years. From trading at Rs 2 per share in 2009 to Rs 447 per share in 2019, the stock would have turned a Rs 1 lakh investment to Rs 1.8 crore till date.

With over 100 times rally, Astral Poly Technik has risen to Rs 1,289 from Rs 10 per share in 2009 (up 13,000 percent).

PI Industries, Westlife Development, and La Opala RG have been some of the other top wealth creators from the BSE500 index in last 10 years jumping 10,800 percent, 10,600 percent, and 10,500 percent, respectively.

Symphony also rose over 10,000 percent in the last 10 years from Rs 12 per share in 2009 to Rs 1,197 per share currently. Symphony is one of the largest players in the air cooler market with an organised market share of around 48 percent. In order to explore new opportunities in the industrial and residential cooling segment, the company has made acquisitions in different geographies including Mexico, China, and Australia.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

This stock rose 78,000% in eight years, but lost 60% market value in two years — Here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Avanti Feeds, India’s biggest shrimp feed maker, has given returns of nearly 29,000 percent to the investors in the last 10 years. The stock which traded around Rs 1.2 per share in June 2009, is currently trading around Rs 350 per share. So, a Rs 1 lakh investment in the company in 2009 would have become Rs 2.9 crore today.

However, the aquaculture company lost over 60 percent of its market value in the last two years as the rising cost of shrimp and softening output prices squeezed margins. The stock, which hit its all-time high of Rs 940.48 on October 1, 2017, had declined 62.4 percent to currently trade at Rs 353.

So in eight years, from 2009 to 2017, the stock rose a whopping 78,233 percent. To put this in perspective, an investment of Rs 1 lakh in 2009 would have given a return of Rs 7.8 crore. However, an investment of Rs 1 lakh in 2017 would have been reduced to below Rs 40,000 in the current day. In the last one year, the stock has fallen over 34 percent.

However, analysts believe that this may be the end of bad days for the stock as India’s shrimp exports continue to gain momentum which could benefit the company. Farm-gate price started witnessing improvement from April which will encourage farmers and provide a better outlook for the industry, they added.

“Despite lowering volume assumption in feed segment to factor decline in the quarter, revenue and PAT is expected to grow at 14 percent and 20 percent CAGR over FY19-21. We roll forward to FY21, continue to value at 15 times considering healthy growth and return on equity and no debt, maintain a target of Rs 427 with a Buy rating,” Geogit Securities said in a report.

For Q4, Avanti Feeds reported a revenue of Rs 858 crore, up 2.8 percent. Profit reported was Rs 76 crore down 11.4 percent Y-O-Y with the margin at 20.7 percent (contracting by 255 basis points Y-O-Y) due to a 6.2 percent increase in raw materials.

According to Edelweiss Securities, Avanti has reported weak numbers in FY19 mainly due to the fact that after the crash in global shrimp prices as well as the farm gate prices, farmers moved away from aquaculture which impacted the demand for feed. However, the processing business has done well and is seeing healthy growth as the company is ramping up its utilisation.

Avanti Feeds has marked its presence in the field of aquaculture by engaging in manufacturing high-quality feed for shrimps. The company has a strong technical and marketing tie-up with the Thai Union group of Thailand to strengthen its capabilities in the field of aquaculture.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow