Avanti Feeds management made a few observations during the company's earnings call: Executive Director Alluri Nikhilesh said that so far, the outlook for this year compared to the previous one looks promising, with prices improving and farmers producing higher numbers compared to FY19. He also responded to questions about the company's Thai partner Thai Union, and their recent impact on Avanti Feeds share prices.
- Farm gate prices fell very low last year. They went to levels which were not encouraging for the farmer to add capacity
- From this year starting April according to Avanti Feeds management the farmgate prices have started to go up. The larger counts have increased substantially, at least about 30% to 40%. The medium sizes have also increased by about 18% to 20%. And the very small size which is the lowest, the 100 count have also increased by 5% to 10%.Overall there is a pick up in the farmgate prices, making it comparatively more encouraging for the farmer compared to the previous financial year.
- The same case with the selling price for the whole of last year, according to Avanti Feeds, the price decreased by 15%. But, for the last six weeks, the price has increased, especially for the larger sizes by at least 8% to 10% in the international markets. From the farm levels, the increase in the price has been translated to the international selling markets. There is positive movement in the prices both internationally and at the farms right now.
Nikhilesh also noted that while demand is increasing, capacity utilization increase for the company - it is operating near capacity - is a step by step process due to the labour intensive nature of the industry, and the need for significant training.
- Thai Union's impact on Avanti Feeds share prices: Responding to an analyst complaining about Thai Union selling shares and depressing prices, Avanti Feeds noted that the Thai company would maintain their stake between 20-25%, and that AF cannot control share sales above that range.
Thai Union's selling of significant numbers of shares in the open market had driven Avanti Feeds share prices down in March 2019. The management added that they'd had "an extensive discussion with Thai Union, and recently you may have noticed they have not sold anything." Thai Union also reportedly said that they would consider block deals going forward, rather than selling shares in the open market.