Avanti Feeds - Muted Off-Take But Lower Input Prices Lift Q3 Margins: ICICI Securities

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ICICI Securities Report

Takeaways from Q3 FY21-

1. There is reduction in shrimp off-take in key market of USA which impacted processed shrimp segment. It reported revenue decline of 9.8% YoY,

2. Shrimp feed reported 2.9% revenue growth. We believe the company is well poised to gain market shares in shrimp feed from smaller players and

3. With stability in input prices and selective price hikes, the Ebitda margin is likely to stabilize approximately 12.5% in FY21-22 (FY20: 11%).

Slow-down in the company’s key market (USA) and lower off-take by hotel restaurant cafe segment (~50% shrimp consumption in USA) continue to hurt the company’s exports.

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