Introduction
Avanti Feeds Ltd. (NSE: AVANTIFEED), a leading player in the shrimp feed and seafood processing industry, has been making headlines with its strong financial performance and strategic growth initiatives. The company recently held its Q3 FY25 earnings conference call, revealing impressive growth in revenue, profitability, and operational efficiency. In this detailed blog post, we will dive deep into Avanti Feeds’ financial performance, operational highlights, and future outlook, providing investors with actionable insights.
Financial Performance Highlights
Revenue and Profit Growth
- Revenue: Avanti Feeds reported a 9% YoY growth in revenue, reaching ₹1,365.8 crore in Q3 FY25.
- Net Profit: The company’s net profit surged by 69% YoY to ₹140.8 crore, driven by higher sales volumes and reduced raw material costs.
- EBITDA Margin: The EBITDA margin stood at 14.6%, reflecting improved operational efficiency.
- PAT Margin: The PAT margin was 10.3%, up by 366 basis points (bps) YoY, indicating strong profitability.
Key Financial Metrics (Q3 FY25 vs Q3 FY24)
| Metric | Q3 FY25 | Q3 FY24 | YoY Change |
|---|---|---|---|
| Revenue (₹ crore) | 1,365.8 | 1,253.0 | ▲ 9% |
| Net Profit (₹ crore) | 140.8 | 83.0 | ▲ 69% |
| EBITDA Margin (%) | 14.6% | 10.4% | ▲ 420 bps |
| PAT Margin (%) | 10.3% | 6.6% | ▲ 366 bps |
Industry Highlights
Seafood Exports
- Indian seafood exports reached 17,81,602 metric tonnes in FY24, valued at ₹60,000 crore.
- Frozen shrimp remained the dominant export item, contributing 40% in quantity and 66% in value.
Pet Food Market
- The pet population in India is approximately 40 million, with dogs accounting for 80% and cats for 20%.
- The pet food market, currently valued at ₹5,000 crore, is expected to grow at a CAGR of 20%.
Business Segment Analysis
Shrimp Feed Segment
- Revenue Growth: The shrimp feed segment generated ₹1,045 crore in Q3 FY25, up 12.1% YoY.
- Volume Growth: Sales volume increased by 15,731 MT, driven by higher demand.
- Production: In 9M FY25, the company produced 4,18,053 MT of shrimp feed, compared to 4,06,995 MT in 9M FY24.
- EBITDA Margin: The segment’s EBITDA margin improved to 16.5%, up by 753 bps YoY.
Shrimp Processing and Export
- Revenue: Shrimp processing revenue remained flat at ₹321 crore in Q3 FY25.
- Export Regions: Processed shrimp exports were distributed as follows:
- North America: 69%
- Europe: 17%
- Asia: 14%
Strategic Initiatives and Future Outlook
Market Expansion
- Avanti Feeds is exploring opportunities to export shrimp feed to the Middle East, which could open new revenue streams.
Value-Added Products
- The company is focusing on value-added products, anticipating better market prospects in this segment.
Pet Food Venture
- Avanti Feeds has partnered with Bluefalo Company Limited, a Thai pet food manufacturer, to set up a pet food plant in Hyderabad. The plant is expected to commence production by December 2026.
Global Shrimp Market
- The management expects the global shrimp market to remain stable in CY25, with a 5% increase in production compared to CY24, driven by rising demand for value-added products.
Financial Statements and Key Ratios
Profit & Loss Statement (Q3 FY25)
| Metric | Q3 FY25 | Q3 FY24 | YoY Change |
|---|---|---|---|
| Revenue (₹ crore) | 1,365.8 | 1,253.0 | ▲ 9% |
| EBITDA (₹ crore) | 160.35 | 97.00 | ▲ 65.3% |
| Net Profit (₹ crore) | 140.8 | 83.0 | ▲ 69% |
| EPS (₹) | 9.9 | 5.3 | ▲ 87% |
Balance Sheet Highlights (FY24)
| Metric | FY24 | FY23 | YoY Change |
|---|---|---|---|
| Total Assets (₹ crore) | 3,098.19 | 2,734.65 | ▲ 13.3% |
| Gross Fixed Assets (₹ crore) | 781.77 | 654.19 | ▲ 19.5% |
Key Ratios (FY24)
| Ratio | FY24 | Industry Avg |
|---|---|---|
| RoE (%) | 29.3% | 15-20% |
| RoCE (%) | 28.7% | 18-22% |
| PE Ratio (TTM) | 20.99 | 53.05 |
| Debt-to-Equity Ratio | 0.0 | 0.5-1.0 |
Shareholder Trends and Market Performance
Shareholding Pattern (December 2024)
| Category | Shareholding (%) |
|---|---|
| Promoters | 18.7% |
| FPIs (Foreign Investors) | 15.4% |
| Retail Investors | 14.5% |
| DIIs (Domestic Investors) | 8.2% |
Stock Performance
- 52-Week High: ₹793.00
- Current Price: ₹741.40 (6.5% below 52-week high)
- 1-Week Performance: ▲ 12.3% (outperforming NIFTY 50 and NIFTY FMCG)
- 3-Month Performance: ▲ 28.0% (outperforming NIFTY 50 and NIFTY FMCG)
Conclusion
Avanti Feeds Ltd. has demonstrated robust financial performance in Q3 FY25, with significant growth in revenue, net profit, and EBITDA margins. The company’s strategic initiatives, such as expanding into new markets, focusing on value-added products, and venturing into the pet food industry, position it well for future growth. While challenges like raw material price volatility and export duties persist, the company’s proactive measures and strong market presence provide a solid foundation for sustained success.
Key Takeaways for Investors:
- Strong Financials: Avanti Feeds has consistently delivered high returns on equity and capital employed, along with steady sales and profit growth.
- Undervalued Stock: With a PE ratio of 20.99, significantly lower than the industry average of 53.05, the stock appears undervalued.
- Growth Opportunities: The company’s focus on value-added products, pet food, and export market expansion offers significant growth potential.
Investors should keep an eye on Avanti Feeds’ execution of its growth strategies and monitor industry trends, particularly in the shrimp feed and pet food segments, to make informed investment decisions.
Disclaimer: This blog post is for informational purposes only and should not be construed as investment advice. Please consult with a financial advisor before making any investment decisions.