Avanti Feeds Limited (AFL) is the leading manufacturer of Prawn and Fish Feeds and a Shrimp Processor & Exporter from India. AFL has a long list of customers from USA, Europe, Japan, Australia & Middle East.
- The demand for Seafood is increasing all over the world. Indian sea food exports are in high demand.
- AFL is the largest seafood processors and leading manufacturer of prawn in India. It is the largest Shrimp processor and exporter from India.
- The company has had a consistent operating history with 10 year sales CAGR of 36.93%. During the same period, the profit CAGR was an astounding 65.52%! The ROE during the period was 33.77%. Now that is some wealth creation!
- The debt is almost negligible.
- The company has healthy positive operating cash flows because of a short working capital cycle. Its debtors turnover increased from around 20.50 as of March, 2012 to around 59 in March, 2016. That in itself speaks a lot about favourable terms with debtors which can only be as a result of a durable competitive advantage.
AFL is available at a current market price of Rs. 553 translating into a trailing PE of around 14.92. For a consistent performer that it is, the valuations seem to be attractive. I am buying!