India’s leading feed producer, Avanti Feeds, is expected to reap benefits from the recent recovery of shrimp prices, according to the Economic Times of India.
Shrimp prices fell last year but have increased roughly 20 percent for the past six months, suggesting a recovery is possibly underway.
Avanti, which owns nearly 50 percent of the aquafeed market share in India, is set to benefit from the higher price trend, as higher prices should encourage shrimp cultivation among local farmers, resulting in more demand for its feeds.
In the quarter ending in September this year, Avanti reported 41.1 percent revenue growth and 154 percent net profit compared to a year ago.
Avanti’s shrimp feed business, which accounted for 80 percent of its revenues, rose 51 percent, while its processed shrimp export business grew by 15 percent. Avanti’s shrimp feed prices went up 3 percent in the quarter after declining for three quarters in a row.
The company’s processed shrimp business, which Avanti entered three years ago, also reported 19 percent volume growth, a double-digit growth for the tenth consecutive quarter.
Avanti’s operating margin before depreciation in the quarter was 12.1 percent, higher by 250 basis points year-on-year. And analysts expect the company to deliver 12.5 to 14 percent compounded sales growth and 20 to 24 percent compounded earnings growth for the next three years, assuming a sustained trend in shrimp prices and EBIDTA margin.
Avanti has several feed manufacturing units located in Andhra Pradesh state and Gujarat state, with a total capacity of 400,000 metric tons (MT) per year, the company said on its website.
Photo courtesy of Avanti Feeds
