Hello Sir,
Hope you are doing well.
Next 6-12 months look crucial from the view of wealth creation over the next 3-4 years.
As they say, it takes a prepared mind to capitalize on the opportunities and we have therefore intensified our research to identify potential investment opportunities.
Today, we would like to bring to your notice Apex Frozen foods and share notes from its latest presentation. Since the last few years the Shrimp industry hasn't done very well and the stocks are down 50-60% from their 2017 highs.
In general, we like looking at companies which have done well in the past but currently going through a tough phase as a lot of times one can get good companies at cheaper valuations in such scenarios.
Hope you find the details useful for your own investments or to add the stock to your watch list:
Before that, if you are interested in investing in our Latest Stock Recommendation which could benefit from the massive growth expected in the CNG segment and still available around 10 times earnings, you can read about it by Clicking HERE
Apex Frozen Jun'22 presentation
Company details -
- Commenced business operations in 1995, Apex Frozen Foods has grown to become one of the leading shrimp processors & exporters in India
- Diversified customer base of Food Companies, Retail Chains, Restaurants, Club Stores and Distributors across the key markets
- Well integrated operations with presence in Hatchery and Processing & Exporting of Shrimp
- FY 22 Geographical sales mix - 80% USA, 18% Europe and 2% China
- Hatcheries with a total current capacity of 1.2-1.4 bn Specific Pathogen Free (SPF) shrimp seed
- Two facilities with a total Processing Capacity of 29,240 MTPA and Cold Storage capacity of ~3,500 MT
Processing Capacity - Of the 20,000 MTPA capacity at G. Ragampeta plant (commissioned in Mar-20), 5,000 MTPA is towards Ready-to-Eat (new product line)
Source: Apex Frozen Jun'22 presentation
Capacity and volumes sold -
Source: Apex Frozen Jun'22 presentation
Working Capital Days - Working capital days increased due to enhanced Hatchery operations since FY19 and inventory & debtor build-up from FY20 end onwards, led by the Covid-19 impact
Source: Apex Frozen Jun'22 presentation
India Sea food exports -
Source: Apex Frozen Jun'22 presentation
FY 22 performance update -
- Overall capacity utilization remained flat YoY at ~41% in FY22 as the Company limited its production considering the prevailing sea transportation issues
- Shrimp sales volumes grew by 3% Y-o-Y to 12,067 MT in FY22 vs 11,702 MT in FY 21, with higher growth in Ready-To-Eat (RTE) products at 39% YoY to 2,364 MT
- The share of high value-added RTE products increased to ~20% in FY22 versus ~15% in FY21
- Approved capacity expansion of RTE products from 5,000 MTPA to 10,000 MTPA
Risks -
- Being an export-oriented sector, any slowdown in consumption in key markets like the USA, EU and South-East Asia will have an adverse impact on India’s shrimp exports
- Highly susceptible to outbreak of diseases, which can have a detrimental effect on the availability of raw material (shrimp)
Disclaimer: This is not a recommendation on the stock. These updates are as announced by the companies on exchanges and only for the purpose of information and education.
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Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
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