Avanti Feeds – A Dream Run!

We wrote about Avanti Feeds @Rs.33 and provided couple of updates [1, 2]. The stock has had a dream run since then and now @Rs.147 it is a 4 bagger in flat 7 months!!!

Avanti_Feeds

It feel great to be part of a multi-bagger stock idea especially when markets have been pessimistic. The purpose of this post is to highlight the rewards possible even in a weak and pessimistic market. Small growth companies continuously provide opportunities, we have to only look for them. Like Warren Buffett says –Be fearful when others are greedy and be greedy when others are fearful.”

The run in Avanti Feeds is due to huge improvement in the performance of this shrimp food sector and Avanti is one the biggest company in this field. A snapshot of Q2 performance:

Particulars Sept 11 Sept 10 % Variation FY 2011
Sales 119.29 58.18 105% 199.62
PBIDT 22.09 4.4 402% 12.38
Tax 5.83 .04 14475% 1.69
PAT 14.17 2.27 524% 3.42
EPS 17.71 2.84   4.24
  • Abhishek

    Excellent pick. At this price, how do you compare between Avanti and IFB Agro?

    Regards
    Abhishek
    http://valueinvstr.blogspot.com

    • Ayush

      Hi Abhishek,

      It would be tough to take a call. But yes, IFB also seems to have good potential and hasn’t appreciated like Avanti.

      Regards,
      Ayush

  • Binu

    Hi,
    Whats your opinion on Websol Energy? Its in a sector with lots of potential but the stock seems to be hitting new lows every month. Are you tracking it by any chance?

    • Ayush

      Hi,

      Sorry, don’t track the same.

  • aditya

    dear sir, indag rubber already run very fast do you see some more appreciation in counter in near term and also sir what may be EPS for FY12

    thanks in advanced

    • Ayush

      Given the excellent Q1 and Q2 nos, we are quite optimistic on the stock. It still has good value at these levels.

      We are expecting FY 12 EPS to be 32+

  • Rishant

    Hi Ayush,
    You seem to pick very valueable companies with sound balancesheets. Its amazing to see the work you doing…
    There is a small cap company Shanthi Gears which seems to be very good in Gears segment. The company had run into some issues in last 2 years after which they restructured their operations.
    The company seems to be doing good after that and may be a good stroy for next 1-2 years.
    DO you track it and if you know more about whether it can be advisale to invest in it?
    Any idea or comments would be helpful.

    • Ayush

      Thanks for your encouragement 🙂

      Yes, Shanthi Gears is a good company for sure. But there is a lot of hope and the co needs to deliver now. If they can be back on growth path, stock should do well.

  • Amit Kumra

    Hi Team,
    What are your views on Puneet Resin …. Also Piccadilly Agro has fallen from 54 levels to 27 levels…Should I consider buying it???

    Thanks
    Amit Kumra

    • Ayush

      Hi Amit,

      Puneet is an interacting stock have a look at group co – Rishiroop Rubber also. Plz share your views on it.

      Piccadilly does seem to have value at these levels but the Q1 nos were very weak. So waiting for Q2 nos.

      • Amit Kumra

        Hi AYush,

        I think Puneet Resin is good stock….gud set of numbers…I have one report..if you want pls share your email id….i will send it to you

        THanks
        Amit Kumra

        • Ayush

          You may mail it at mittalandco at gmail

  • Sidhartha Sinha

    Aysuh – have you see the other two companies in shrimp- waterbase and uniroyal? waterbase is from the thapar group, seems like a ugly duckling

    • Ayush

      Yeah, we did had a look but valuation wise Avanti & IFB Agro seemed better. Also the biggest players are usually the most benefited and these two are one of the biggest.

  • Vishal

    Ayush:what is your full year expected eps for avanti feeds for this year….. any idea please share

    • Ayush

      Hi Vishal,

      The co is in an uncharted territory. As per industry articles, the industry is still doing very well and is expected to continue growing for next 2-3 yrs. Its expected that the second half is a bit slower for the industry hence not expecting something like Q2.

      We are expecting an EPS of say 35+ for the year.

  • vishal

    Amalgamation of M/s. Avanti Thai Aqua Feeds Private Limited with M/s. Avanti Feeds…… ur comments

    • Ayush

      Hi,

      The merger seems to be positive for the shareholders as the eq of the co will inc by just 1.08 Cr while the co will be getting capacity of 10,000 MT.

  • Vishal_40097

    hi,
    sir almost 6rs eps for this quater…..ur comments please

    • Ayush

      Hi,

      We feel the results are good. Usually H2 is weaker for this industry.

  • Pingback: Avanti Feeds: Updates from Annual Report 2012Dalal Street()

  • manish

    Hi Ayush,

    As per Sept results, the cash ( as compared to 31 mar 12) has decreased by abt 17 cr, current investments reduced by 17 cr, and company has earned a profit of abt 18 cr in these 6 months – so total of abt 50 cr. promoter pledging of shares has increased. However, the total loan has reduced slightly.

    Where has all this money gone.

    Understand company had plans to build a factory near Chennai. But could not find any news and clarification on above.

    Do you any news regd same.

    manish

    • Ayush

      Hi Manish,

      As you are comparing the balance sheet of Sept with March, there will be lots of differences due to the seasonal nature of the business. Sept is their best quarter and hence lots of funds would have got used in inventory, debtors etc.

      They must have also invested money in new facilities and the same may be under loans and advances as of now.