Avanti Feeds Limited- A Steady Compounder

avanti-feeds-multibagger

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.

Why invest?

  • 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.

Price?

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!

Resources:

Screener Page

Company Website

9 thoughts on “Avanti Feeds Limited- A Steady Compounder

  1. Hi ,

    I regularly follow your blog and I have invested in Avanti because of this reason and now it has given good returns.

    Thank you

  2. there is sudden surge in avanti share price more than 30% in last 4 seasons, more than 100% returns in last one year. Is it right time for profit booking and enter at corrections and much lower levels. Request your opinion.

    I find that the valuations are steep from the average results declared. Is there is any shock expected from small/retail investors.

    • Sorry for replying late. Yes, the stock has exceeded the expectations of a lot of people including me. While it is trading above its fair value currently, I would still not sell as I believe in the long term potential of the stock. You take your call 🙂

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