Avanti Feeds Ltd Q4 FY23 Earnings Conference Call Insights

Key highlights from Avanti Feeds Ltd (AVANTIFEED) Q4 FY23 Earnings Concall

Q&A Highlights:

• [00:19:50] Onkar Kulkani from Sri Investments asked about the sales, profit and margin outlook for FY24. C Rao Joint MD said that sales are currently down by 10%, but the company is confident that it can make up for this in the coming months and reach last year’s sales levels with a variance of 7%. Revenue is expected to be flattish.

• [00:30:52] Onkar Kulkani from Sri Investments enquired if there are any concrete plans regarding the fish feed capacities that are going to come up. C Rao Joint MD replied that the company’s focus on fish feed is its first priority and the increasing demand for floating feed. AVANTIFEED expects to have more clarity on future investment and revenue projections by the end of the year.

• [00:32:14] Onkar Kulkani from Sri Investments asked about the size of opportunities in the fish feed market. C Rao Joint MD replied that there is opportunity for increasing fish production in India. AVANTIFEED believed that using a new method in fish culture will result in higher yields, lower costs, and benefits for both consumers and producers.

• [00:38:12] Aman Madrecha at Augmenta Research enquired about the Ecuador market as MonM, the export volumes are continuously increasing but Indian exports are subdued. C Rao Joint MD replied that it’s a challenge competing with Ecuador in the U.S. market due to their higher volume. However, AVANTIFEED has an advantage in producing value-added products and is focusing on expanding to new markets such as Japan and Korea while diversifying the market to not depend too much on the U.S.

• [00:42:37] Aman Madrecha at Augmenta Research asked if the situation with shrimp exports is expected to settle down in the current year. C Rao Joint MD replied that there are challenges faced in the current year due to market instability and the ongoing global situation. The company expects the year 2023-2024 to be challenging but expects 2024-2025 to be a better year.

• [00:45:09] Aman Madrecha at Augmenta Research asked about the feed side, how the farmers are reacting and how has been the farming. C Rao Joint MD said the farmers are not so excited due to rising prices and lack of good seed. However, farm gate prices have improved and become more stable, allowing farmers to stock in a phased manner. AVANTIFEED is doing well in the market and is helping farmers grow bigger sized shrimps for better prices.

• [00:48:58] Aman Madrecha at Augmenta Research also asked how Andhra Pradesh govt. is supporting the farmers. C Rao Joint MD replied that the regulation brought in by the govt. of Andhra Pradesh is for the regulated growth of the industry. AVANTIFEED believes that the current challenges are temporary and that the situation will gradually stabilize, with next year looking brighter for everyone involved.

• [00:51:05] Gunjan Singh of Counter Finance asked what drove the margins up in 4Q23 despite sales going down. C Rao Joint MD said it’s due to RM prices being stabilized and also due to better inventory management and planning.

• [00:54:11] Gunjan Singh of Counter Finance enquired if a 13% operating margin can be expected as base margin for FY24. C Rao Joint MD clarified that it’s a very high figure. However, the company will be able to give some indicator after 3Q24.