Buy Avanti Feeds, target price Rs 637: ICICI Securities

ICICI Securities has buy call on Avanti Feeds with a target price of Rs 637. The current market price of Avanti Feeds Ltd. is Rs 531.1.

Time period given by analyst is one year when Avanti Feeds Ltd. price can reach defined target.

Avanti Feeds Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 7254.40 Crore) operating in Aquaculture sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1430.07 Crore, up 28.10 % from last quarter Total Income of Rs 1116.37 Crore and up 45.52 % from last year same quarter Total Income of Rs 982.76 Crore. Company reported net profit after tax of Rs 79.21 Crore in latest quarter.

Investment Rationale
The brokerage models Avanti to report revenue and PAT CAGRs of 13.5% and 16.1% over FY21-FY23 and also expect its RoE to be over >20% in the same timeframe. It maintains BUY rating with a DCF-based target price of Rs639 (implied P/E 18x FY23E EPS; Earlier TP-Rs650). Key risk: Higher than expected input inflation and lower than expected off-take of products.

Promoter/FII Holdings
Promoters held 43.7 per cent stake in the company as of June 30, 2021, while FIIs held 17.6 per cent, DIIs 4.3 per cent and public and others 34.4 per cent.