Avanti Feeds Limited

Fundamental
Analysis
Group A
Overview

20% expected US$ 10bn export target for

industry growth industry by FY22

43% Market 2x growth in

Share in shrimp
100% current
feed business
feeds business every year utilisation 15x
Increase in
capacity since
Trust among
Growth in >55% ROCE 2009
Farmers
Processing for past 5
Business years 
Industry Analysis

41% of seafood exports • Shrimp continues to be the back bone of Indian seafood exports and
accounted for 41% in volume terms of total seafood exports from the
country as against 38% in the previous year

30.41% Volume growth • The total shrimp exports were around 5,66,000 MT in the year 2017-18
as compared to 4,34,000 MT in 2016-17 in volume terms

• In value terms, the shrimp exports were 30,868 Crore as against `24,711
24.91% Value growth
Crore in 2016-17

• For 6 consecutive years from 2010-11 to 2017-18, the shrimp culture

23% CAGR FY11-FY18 industry registered a CAGR of 23% on an average 1,51,465 MT in 2010-
11 to 5,11,000 MT in 2017-18.
SWOT Analysis
STRENGTHS
 High Market share, sustainability and
superior execution
 High capacity utilization (close to 100%) WEAKNESSES
 Partnership with Thai Union, access to The shrimp culture faces infrastructure-related
technical know-how problems like in-adequate water resources,
 Lowest FCR- 1.2 compared to industry power supply, cold storage, etc.
average 1.5
 Brand built with high trust with the
farmers- superior cash conversion cycle

OPPORTUNITIES
THREATS
 Healthy Industry tailwinds- estimated
CAGR of 20%
• Dependent on climatic conditions- threat of
 Diversifying revenue streams
cyclones/tycoons
 Increased global consumption of Indian
• Possibility of shrimps getting affected by
seafood in US and SE Asia
diseases.
 Government’s push on developing
• Volatile International prices of shrimps;
aquaculture in India
fluctuating foreign exchange rates; anti-
 Large coastline offers huge untapped
dumping duty by US.
potential for shrimp farming
SWOT ANALYSIS

STRENGTHS
 High Market share, sustainability and
superior execution
 High capacity utilization (close to 100%) WEAKNESSES
 Partnership with Thai Union, access to The shrimp culture faces infrastructure-related
technical know-how problems like in-adequate water resources,
 Lowest FCR- 1.2 compared to industry power supply, cold storage, etc.
average 1.5
 Brand built with high trust with the farmers-
superior cash conversion cycle

OPPORTUNITIES
THREATS
 Healthy Industry tailwinds- estimated CAGR
of 20%
• Dependent on climatic conditions- threat of
 Diversifying revenue streams
cyclones/tycoons
 Increased global consumption of Indian
• Possibility of shrimps getting affected by
seafood in US and SE Asia
diseases.
 Government’s push on developing
• Volatile International prices of shrimps;
aquaculture in India
fluctuating foreign exchange rates; anti-
 Large coastline offers huge untapped
dumping duty by US.
potential for shrimp farming
Ratio Analysis
Profitability Ratios 2018 2017 2016 2015 2014
PBT/Sales 0.22 0.13 0.12 0.10 0.09
Profit Margin (NP/Sales) 0.15 0.09 0.08 0.07 0.06
RoE 0.55 0.41 0.49 0.54 0.80
RoA 0.39 0.27 0.29 0.27 0.22
EPS 91.37 43.23 34.19 128.35 76.79
Solvency Ratios
PAT+Dep/Total liabilities 1.30 0.72 0.72 0.58 0.34
Debt-Equity 0.35 0.50 0.61 0.83 1.26
Liquidity ratios
Current assests/current liabilities 3.19 2.24 1.69 1.77 1.38
Quick ratio 1.92 1.17 0.66 0.65 0.39
Turnover ratios
Asset Turnover 2.64 3.04 3.69 4.05 3.51
Working Capital Turnover 5.60 9.11 13.16 15.36 17.72
Inventory Turnover 5.90 6.96 6.91 6.57 5.96
Competitive Ratios
Market Price as on 1st April (Year End) 1117 369 200 170 50
PE Ratio 12.23 8.53 5.86 1.32 0.64
Dividend Yield Ratio 0.04 0.10 0.16 0.15 0.28
Dividend Payout Ratio 0.54 0.89 0.93 0.19 0.18
EPS Growth (%) 111.36 26.44 -73.36 67.14 131.02
PEG Ratio 0.11 0.32 N/A 0.02 0.00
Valuation
Price Multiples
Valuation using DCF Analysis
1000.00 892.00 P/E
797.28
800.00 687.67 Industry- 15.58
573.06 Avanti Feeds- 14.83
600.00 477.55
397.96 Consensus – 20
400.00 276.36 331.63
200.00
Based on 20x –
0.00 Estimated share price (2026) =
2018 2019 2020 2021 2022 2023 2024 2025
2119
FCFE Estimated share price (2020) =
877
V0= FCFE0 + FCFE1/1+re+ FCFE2/(1+re)2+ … + FCFE7/(1+re)7+ FCFE8/(re-g)
EV/EBITDA= 2.96
CAGR of 20% for next 5 years Compared to Waterbase’s 26.14
Tapering growth for the next 3 years 7521.37 crores and CP Aquaculture’s 6.9
To reach a stable growth rate by 2026 Compared to actual M-
Terminal Value= 5955.14 crores cap of 6590 crores
 Krishan Mittal (0413/55)
Pranay Sumbly (0428/55)
THANKS!!! Rajat Garg (0432/55)
Raman Bhatia(0354/55)
Shravan Mundra (0445/55)
Any questions?