Avanti Feeds’ standalone net profit fell by 83.05 percent in the third quarter of 2021.
Sales increased by 7.11 percent to Rs 960.76 crore.
Avanti Feeds’ net profit fell by 83.05 percent to Rs 15.58 crore in the third quarter of 2021, compared to Rs 91.94 crore in the previous quarter. Sales increased 7.11 percent to Rs 960.76 crore in the quarter ending September 2021, compared to Rs 897.00 crore the previous quarter. During the most recent quarter, which concluded in September 2020.
Moneycontrol.com is the source for this information.
ICICI Securities has set a price target of Rs 639 for Avanti Feeds.
CMP is 565.75.
Results from Q1-FY22: Conclusion: Avanti Feeds saw a 47.5 percent increase in revenue, fueled by a 59 percent increase in its feed business; but, its processed shrimp business fell 5.2 percent yearly owing to decreased offtake; and inflationary pressures in input costs harmed profitability. As a result of the Company’s announcement of a recall of some items owing to suspected contamination, we foresee some effect on profitability.
While the HoReCa segment was hurt during the quarter, we expect that with the opening of the economy and the big vaccination effort, it will return to normal. Avanti, we believe, will be the primary benefactor of the RoDTEP plan and model. Avanti’s profitability were impacted by the MEIS scheme’s termination. The implementation of export advantages as part of RoDTEP will help to alleviate margin pressure.
Avanti is expected to post revenue and PAT CAGRs of 13.5 percent and 16.1 percent in FY 2011-FY 2013, respectively, and a ROE of more than 20% over the same period.
With a DCF-based target price of $639 (implied P/E 18x FY23E EPS; prior TP – 650), we retain our buy recommendation.
Key risks include higher-than-expected input inflation and lower-than-expected product offtake.
Moneycontrol.com is the source for this information.
Avanti Feeds’ margins were slashed in the first quarter, and the stock is now languishing.
Avanti Feeds Ltd’s results for the first quarter of FY22 (Q1FY22) were disappointing in terms of profitability. The Ebitda margin (earnings before interest, taxes, depreciation, and amortisation) decreased sequentially and year over year. Ebitda margin declined 680 basis points to 6.7 percent from a year earlier. One tenth of a percentile is one basis point. Margins declined 110 basis points sequentially.
Margin pressure can be attributed to inflationary pressures in raw material costs. The company’s earnings was hit last quarter mostly by higher raw material prices in the shrimp feed sector. Avanti Feeds’ EBITDA declined roughly 27% year over year, despite revenue increasing 47.5 percent to Rs 1,408 crore.
A roughly 60 percent rise in sales from the shrimp feed category aided revenue growth. Due to a surge in the agriculture sector and farmers switching from alternative feeds, the shrimp feed market did well. The processed shrimp category, on the other hand, underperformed, with revenue falling 5.2% owing to decreased sales volumes.
It’s worth noting that total Q1 revenue was up 28% from the previous quarter, which isn’t terrible.
Shrimp feed consumption in India decreased in FY 2021 compared to the previous year. Shrimp farming, on the other hand, is likely to recover to pre-pandemic levels due to a steady improvement in worldwide demand and stable farm gate pricing, according to the company’s earnings presentation. Avanti Feeds is also predicted to maintain its 48-50 percent market share in FY22.
In the meanwhile, Avanti Feeds’ stock has underperformed the Nifty 500 index over the last 12 months. The stock has dropped about 27% since its pre-Covid peak in January 2020.
“Because the business issued a recall of certain items owing to suspected contamination, we foresee some effect on profitability.” While the HoReCa category was hurt during the quarter, analysts at ICICI Securities Ltd wrote in a research on August 23 that “we expect it will return to normality with the opening up of the economy and the big vaccination programme.” Horeka is a combination of the words hotel, restaurant, and cafe.
“We model Avanti to record revenue and profit after tax CAGRs of 13.5 percent and 16.1 percent in FY2011-FY23, respectively, and expect its return on equity to exceed 20% in the same time period,” the broker added. The compound annual growth rate is abbreviated as CAGR.
livemint.com is the source of this information.
Yes Securities recommends buying Avanti Feeds with a target price of Rs 700.
Avanti Feeds gets a buy call from Yes Securities with a target price of Rs 700. Avanti Feeds Ltd. is currently trading at Rs 642.5.
When Avanti Feeds price can achieve set objective, time period indicated by analyst is Intra Day.
Avanti Feeds Ltd., founded in 1993, is a Mid Cap business in the Aquaculture industry with a market capitalization of Rs 8685.66 crore.
The firm reported a Consolidated Total Income of Rs 1116.37 Crore for the quarter ended 31-03-2021, up 18.30 percent from the previous quarter’s Total Income of Rs 943.65 Crore and up 6.68 percent from the same quarter last year’s Total Income of Rs 1046.43 Crore. In the most recent quarter, the company generated a net profit after tax of Rs 70.03 crore.
Reasons for Investing
The pattern of increasing tops and bottoms remains intact with a prolonged advance above short-term averages. The recent rapid reversal from the support zone assures an upward range change.
As of December 30, 2020, promoters owned 43.7 percent of the firm, while FIIs controlled 17.6%, DIIs 3.3 percent, and public and other 35.4 percent.
economictimes.com is the source for this information.
The return of shrimp prices in the United States bodes well for Avanti Feeds.
Avanti has been upgraded to BUY because I the recovery in shrimp pricing in its core market, the United States, bodes favourably for the shrimp processing/feed sector. Higher shrimp prices benefit all players in the shrimp value chain; (ii) the increase in customs duty on shrimp feed from 5% to 15% announced in the February Budget will benefit domestic feed manufacturers; and (iii) due to the high volatility of shrimp prices and profitability, strong players such as Avanti are expected to gain market share from smaller players who are more affected.
The corporation is also rapidly reducing its reliance on the United States, with non-US markets accounting for 14% of its exports. At present prices, the company trades near its Mean P/E – 1SD, offering a margin of safety. Avanti is expected to achieve a 13.5 percent PAT CAGR during FY20-23, and we have upgraded it to Buy with a target price of Rs 560. (15x FY23e).
Shrimp prices in a crucial market, the United States, have recovered following the Covid epidemic, falling from $14/kg in March to $11.35/kg in October. However, since October of last year, we’ve observed a continuous rise in shrimp prices, which are now at $11.93/kg in February of this year. Shrimp prices are on the rise again, which bodes well for the shrimp business, since all stakeholders in the value chain (farmers, feed producers, and processing firms) benefit more.
Imports represent for 8-10% of India’s overall shrimp feed market, therefore an increase in customs tax will help domestic companies. Domestic feed makers, such as Avanti, are likely to gain from the hike in customs tax.
Expect market share gains: We expect smaller competitors in shrimp exports and feed to be harmed more than Avanti Feeds due to the significant volatility in shrimp pricing and swings in profitability. We anticipate Avanti to benefit from its solid balance sheet (Net cash of Rs 10 billion on FY21e Balance Sheet), and we expect it to gain market share in both shrimp feed and shrimp processing.
Reducing reliance on the United States: Avanti is also working to reduce its reliance on the United States, and has begun exporting shrimp to China and Europe. While demand in the United States is being hindered, recovery in other markets such as China will assist to increase volume off-take. Exports to countries other than the United States account for around 14% of total shrimp exports.
Upgrade to BUY: We estimate Avanti to record revenue and PAT CAGRs of 8% and 13.1 percent during FY20-FY23, respectively, and a consistent RoE of 23% during the same period. With a DCF-based target price of Rs 560 (implied P/E 15x FY23e EPS), we raise the company from ADD to Buy.
financialexpress.com is the source for this information.
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