Avanti Feeds, Waterbase extend fall on growth concerns

Avanti Feeds dipped 4% to Rs 1,476 falling 24% in past five trading sessions post March quarter results.

Shares of shrimp exporters Avanti Feeds and Waterbase have fallen more than 50% from their respective 52-week highs on concerns of decline in exports in the current financial year 2018-19 (FY19) due to prevailing un-favourable conditions.

Avanti Feeds has dipped 4% to Rs 1,476, falling 24% in past five trading sessions, after the company’s earnings before interest, taxation, depreciation and amortization (ebitda) margin declined 440 basis points to 15.9% in March 2018 quarter (FY18). It had recorded ebitda margin in the range of 20% to 24% in earlier past four quarters.

The stock is trading at its lowest level since August 11, 2017, and has declined 51% from its 52-week high of Rs 3,000 touched on November 13, 2017 on the BSE in intra-day trade. The S&P BSE Sensex was up 6.4% during the same period.

“In the current year (2018) till now, the shrimp export prices have been declining significantly and the farm gate prices of raw shrimps have also dipped, dampening the expectations of a growth rate of above 15% in production, in the current year. However, since the prices are expected to go up in near future, the growth may be expected at around 5 - 10%, in the current year,” Avanti Feeds said while announcing Q4FY18 results.

Keeping the increasing growth trend, India exported about 5.40 lakh MT's of shrimp in 2017-18. However, in 2018-19, due to prevailing un-favourable conditions, it is anticipated that the exports may go up by about 5 - 10%, it added.

Waterbase is locked in 5% lower circuit at Rs 182, extending its Friday’s 5% decline on the BSE, after the company said input prices for shrimp feed which remained soft for large part of 2017 have started firming up since the beginning of 2018, the ability of feed producers to pass on price inflation is limited due to heightened competitive intensity and depressed farm gate prices of shrimps.

Moderate increase in global shrimp production coupled with increased inventory in US have adversely impacted the farm gate prices during the past few months. While the first crop for farming season 2018 is in progress, sustained weakness in farm gate prices may impact farmer sentiment. However we remain cautiously optimistic and expect the farmgate prices to improve in H2 of FY19, it added.

Shares of Waterbase tanked 56% from Rs 418 recorded on January 2, 2018 against 4% rise in the Sensex.