Avanti Feeds

Disc: I remain invested. Avanti forms a significant portion of my portfolio

Below are known data-points, and should serve as caution points for Newbies. Do not be tempted to jump in (say, at lower levels) - unless you have made a decent attempt to understand the ODDs.

My Key Takeaways from the Avanti BizQuest Concall
1. There is tangible damage to Nellore Crop. Investors in Avanti should be prepared to see impact of same in Q3 Results.
2. Short term pain may extend for a couple of months more - we will need to assess afresh
3. Main stakeholders remain optimistic and very hopeful of Summer Crop remaining unaffected, and therefore medium term prospects of industry for 2016 and 2017 look good to them
4. Crop area going up, States like Orissa and Gujarat showing rapid uptake of Vannamei, some Corporate Firms shifting to Vannamei from Black Tiger, AP Govt. Policy incentives to Aquaculture - are reasons cited for the confidence
5. Avanti Management Quality/Execution track record is seen as Exemplary. Not only farmers but the whole trade readily testifies to that including Competition.

Top-of-Mind Focus area for further investigation (those invested/tracking)
1. Whereas industry/stakeholders seem very confident of at least 2 good years ahead in 2016 & 2017, it is certainly not clear why India will continue to prosper and grow at a brisk rate (as envisaged by Industry)
2. Given that most of the competing supplier nations - Vietnam, Mexico, Indonesia, Equador, India and Thailand (almost there) are almost at similar production levels and there is now a demand-supply equilibrium of sorts, what makes us confident that India will continue to grow faster by snatching away more marketshare (from others, which countries?)
3. Is it possible to work out a cost-competitiveness model among the various competing countries e.g. Om was pointing out that Thailand wages are 20% higher today despite the devaluation (?)

Others participating in the Concall, may please add your key focus areas/takeways - perspectives that I may have missed.

Let's take the data collection/investigation work forward