**Avanti Feeds** - Q4 FY20 (Audited –Cons)
CMP: 472
Total revenue from operations 1,035 Cr
858 Cr (20.61%) YoY | 923 Cr (12.15%) QoQ
Year ending revenue: 4,115 Cr Vs. 3,488 Cr (17.94%)
Net Profit of 98.7 Cr
75.9 Cr (30.02%) YoY 58.4 Cr (69.09%) QoQ
Year ending Net profit: 385.2 Cr Vs. 305.9 Cr (26.28%)
EPS (in Rs.) 6.38
4.99 YoY |3.51 QoQ
Year ending EPS: 25.43 Vs. 20.08
View: Result is overall good and fair. YoY and QoQ revenue and profit both have increased. EBITDA also improved in this quarter.
**Business Updates & Highlights**:
Q4FY20 EBITDA was around INR 124.5 Cr Vs. 93.3 Cr in Q4FY19 therefore up by 33.4% in YoY. EBITDA margin is around 12% Vs. 10.8% in YoY.
FY20 EBITDA was around INR 453.8 Cr Vs. 407.2 Cr in FY19 therefore up by 11.4% in YoY. EBITDA margin in FY20 was around 11% Vs. 11.6% in FY19.
Company is primarily operating into two main segment viz. Shrimp Feed – 72% and Processed Shrimp – 27.5%. YoY topline growth for Shrimp Feed was around 15.1% and processed Shrimp was around 38.4%.
YoY bottom line growth for Shrimp feed was around 24.9% and processed shrimp was around 82.8%.
Board of Directors of the Company at its meeting held on June 27, 2020, inter alia, has recommended a Final Dividend of Rs.0.10 Ps., per Equity Share of Re. 1/- each fully paid, (in addition to Interim Dividend of Rs. 5/- already paid during March, 2020) for the financial year 2019- 20
**Financial**
ROE and ROCE is around INR 23% and 37% respectively and book value per share is around INR 100 and share is currently trading at 4.7x of its book value. Company is currently trading at annualized PE of 19 which is good as per Industry benchmark. Promoter holding is around 43.7% in the company which is good and stable. FIIs and mutual fund hold around 17.8% and 1.8% in the company which is more than 2% increased by FIIs. Cash and cash equivalent from operating activities as of March 2020 is around INR 125 Cr Vs. 184 Cr as of March 2019. The good thing is company is virtually debt free and realization is also very fair.
Position: Share support price is INR 450. Short term share will bounce back. Long term investor can see the target price of INR 640.
**Share View**: Share price high 770 (52 week) and now 471. Avanti Feeds Limited stands as a leading provider of high quality feed, best technical support to the farmer and caters to the quality standards of global shrimp customers. Avanti is proud of a long list of loyal customers from USA, Europe, Japan, and Australia & Middle East.
Opportunities: Company is currently at beaten down valuation. Strong management and also quarterly performance is sound. Both the business fairly well in this quarter and year ended performance also improved. Debt free company. Largest supplier of Shrimp feed in the entire coast of India and other countries. Avanti has Four Prawn and a Fish Feed Manufacturing Units, certified ISO 9001:2008, in Kovvur, Vemuluru and Bandapuram in West Godavari District, Andhra Pradesh and Pardi in Valsad District, Gujarat, in India with a capacity of 4,00,000 MT per annum
Risk: Q1FY21 may also impact due to Covid-19 for Shrimp food business overall globally including USA, Europe, Japan and others on account of increasing virus pandemic.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.