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Avanti Feeds stock up 2% as co starts ops post capacity addition

Avanti Feeds Ltd has announced that the commercial production of the additional capacity of 1,75,000 MT of shrimp feed plant at Bandapuram in Andhra Pradesh commenced from March 19.

The stock rose for the third consecutive session today. The stock is currently trading at Rs2,241, up by Rs48.25 or 2.2% from its previous closing of Rs2,192.75 on the BSE.

The scrip opened at Rs2,189.70 and has touched a high and low of Rs2,256 and Rs2,189.70 respectively.

Avanti Feeds is a leading manufacturer and exporter of shrimp feeds and shrimp processor. The company also operates windmill with an installed capacity of ~3.2 megawatts in Karnataka. It derived ~82% revenue from shrimp feeds and ~18% revenue from processed shrimp during 9MFY18.

There is a huge domestic and export demand to be met as India imports 50% of the aquafeeds requirement. This is backed by FY18-19 Union Budget allocation of Rs10,000cr for aquaculture and fishery industry. Overall, we see revenue CAGR of ~25% over FY18-20E. Also, the management is aiming to increase its market share to 50-55% (current ~46%) over FY17-20E. We expect EBITDA to stabilize at ~18% in FY20E after completing commissioning of new capacity. Overall, we see PAT CAGR of ~17% over FY18-20E. It is virtually a debt free company which lends financial stability.