Month: August 2019

Evaluating low gross margin business ?

Avanti Feeds is the largest manufacturer of shrimp feed in India. Based in Andhra Pradesh, the Company is the dominant player in India’s aquaculture sector. Avanti Feeds is a great survivor in Indian aquaculture industry rebounding from death & obscurity

How Avanti became a leader?

In 2009, the Government made a decisive move to change the course of shrimp farming in the country. It allowed commercial cultivation of the whiteleg shrimp, also known as Litopenaeus vannamei. For this variant grew faster, was more resistant to disease than the black tiger shrimp and was more lucrative to cultivate. On the ground, Avanti spearheaded this change It convinced the farming community to get into the cultivation of vannamei shrimps. It partnered Thai Union Group, one of the largest global seafood companies to manufacture feed for white leg shrimp By 2017, the production of white leg shrimp touched 4.5 lakh tonnes in 2017, from 10,000 tonnes in 2010. While the production of black tiger shrimps, which was at 50,000 tonnes in 2009, was eventually stopped by 2015. Avanti emerged as the largest producer of shrimp feed in India

From -2019 Annual Report 

 

Like many other agri and aqua-based companies, Avanti feeds is … Read the rest

Annual Review – Piramal Enterprises 2019

In last four years, the business mix of Piramal Enterprises has changed completely

 

 

With financial services forming lion share of top line and bottom line.

Right from start, the decision to invest in Piramal Enterprises (as well as Thomas Cook) was to ride with smart managers who have a fantastic long term record of creating wealth. 

Coming to FY19 business performance

Financial Services

The NBFC sector was impacted by a liquidity tightening situation, triggered by default by IL&FS and further worsened with defaults by large corporate groups like ADAG and ZEE. The adverse environment led to reducing the growth loan book grew 34% y-o-y to ₹56,624 crores.  For any financial services company, it’s easy to expand loan book however the key is to maintain quality of loan book and ensuring there is no Asset-Liability mismatch. On both fronts, till now Piramal has done well. The NPA has been below 1% and across time zones the company has sufficient liquidity to match outflows.  At the company level, they have diversified their book from wholesale lending to retail lending which is now 71% of their book compared to 83% in FY 2015. The management indicated that this further improve … Read the rest