I was suppose to post this last week. it was saved as a draft.
AVT Natural Products Ltd. is one of the finest, high quality, profitable, well managed and niche company based in Kerala. This is a 100% EOU. The various businesses of this agri company are Marigold Oleoresins, Spice Oleoresins & essential oils, value added beverages (mainly Decaffeinated tea). They have recently ventured into specific health suppliments (nutraceuticals). For more info check, http://www.avtnatural.com/
The company belongs to the AV Thomas group which consists of business in diverse areas such as Plantations, Tea, Spices, Rubber, Leather, Food ingredients, biotech, etc. One of the group companies is AVT McCormick, a 50:50 joint venture between AVT and McCormick & Co Inc. of USA.
PRESENT DAY NUMBERS
CMP on Day15 Aug2014: Rs 43.25 Market cap: 650 crores BV: 12 FV: 1
Revenue FY14: 271 cr (FY13 255 cr) Net profit FY14: 51 cr (FY13 50 cr) EPS: 3.35 (FY13: 3.32)
Debt: ZERO
BRIEF HISTORY
AVT Natural was formed in 1986. It started with Marigold cultivation on 200 acres of land, and has since gone up to 35,000 acres producing 100,000 metric tonnes of flowers with the support of 30,000 loyal farmers.
MULTIBAGGER POTENTIAL
1. The company has delivered 3 consecutive years of PAT of 50 CR plus (this during when global conditions have been challenging)
2. The company is a "Zero Debt" company as on 31st March 2014 (they walked the talk of becoming a ZD company as stated in their AR 2 years back)
3. Compounded profit growth has been around 32% over the last 10 years and RoE has been around 35% during the same period
4. The company has been maintaining a healthy dividend payout of over 20% over the last 10 years (with the exception of a couple years)
5. For the first time in its history, they clocked a revenue of 90 CR in Q1FY14; it is not far when QR will be 100 cr plus stepping up the threshold
6. The company has diversified into health supplements under the brand name "Optim Health". The launch was done in few select cities just recently.
For more into check, http://www.optimhealth.in/
INTERESTING INFO
1. AVT Natural featured in the Forbes list of 200 best companies under a billion dollar revenue in the asia pacific region (in the year 2012)
2. The contract farming model followed by AVT is regarded as one of the best. Their endeavor is to ensure "Quality at source"
3. They have been audited and certified for Quality by BUREAU VERITAS in accordance with ISO 9001:2008
4. AVT has a win-win relationship with the farmers maximizing net returns to the farmers and ensuring quality produce for the company at optimum price.
MY TAKE
AVT Natural is already a proven SUPER MULTI BAGGER. From a stock price of 40 paisa in the year 2002 (adjusted for splits and bonuses) to a life time high of 50 rupees in the year 2015; this has multiplied investor wealth by approximately 110 times in a matter of 12 to 13 years.
Even if we were to split the stock performance into 2 separate time periods; this stock has been a multibagger twice. 40 ps in year 2002 to 8 rs in 2008 (a 20-bagger); and 4 rs in 2009 to 40 rs in 2014 (a 10-bagger).
Now the million rupee question is "Will it became a multibagger ?". I do believe it has all the potential and capability to become a multibagger yet again from the 40 - 45 levels. Tremendous strength in the existing product portfolio, uniqueness of the business model, proven management capability, and diversification into new but associated business areas; should ensure that the financial and business performance and growth should continue into the foreseeable future. At a PE of around 12 and PB of around 4 this could still become a wise investment idea.
A strong and robust potential multibagger!!
AVT Natural Products Ltd. is one of the finest, high quality, profitable, well managed and niche company based in Kerala. This is a 100% EOU. The various businesses of this agri company are Marigold Oleoresins, Spice Oleoresins & essential oils, value added beverages (mainly Decaffeinated tea). They have recently ventured into specific health suppliments (nutraceuticals). For more info check, http://www.avtnatural.com/
The company belongs to the AV Thomas group which consists of business in diverse areas such as Plantations, Tea, Spices, Rubber, Leather, Food ingredients, biotech, etc. One of the group companies is AVT McCormick, a 50:50 joint venture between AVT and McCormick & Co Inc. of USA.
PRESENT DAY NUMBERS
CMP on Day15 Aug2014: Rs 43.25 Market cap: 650 crores BV: 12 FV: 1
Revenue FY14: 271 cr (FY13 255 cr) Net profit FY14: 51 cr (FY13 50 cr) EPS: 3.35 (FY13: 3.32)
Debt: ZERO
BRIEF HISTORY
AVT Natural was formed in 1986. It started with Marigold cultivation on 200 acres of land, and has since gone up to 35,000 acres producing 100,000 metric tonnes of flowers with the support of 30,000 loyal farmers.
MULTIBAGGER POTENTIAL
1. The company has delivered 3 consecutive years of PAT of 50 CR plus (this during when global conditions have been challenging)
2. The company is a "Zero Debt" company as on 31st March 2014 (they walked the talk of becoming a ZD company as stated in their AR 2 years back)
3. Compounded profit growth has been around 32% over the last 10 years and RoE has been around 35% during the same period
4. The company has been maintaining a healthy dividend payout of over 20% over the last 10 years (with the exception of a couple years)
5. For the first time in its history, they clocked a revenue of 90 CR in Q1FY14; it is not far when QR will be 100 cr plus stepping up the threshold
6. The company has diversified into health supplements under the brand name "Optim Health". The launch was done in few select cities just recently.
For more into check, http://www.optimhealth.in/
INTERESTING INFO
1. AVT Natural featured in the Forbes list of 200 best companies under a billion dollar revenue in the asia pacific region (in the year 2012)
2. The contract farming model followed by AVT is regarded as one of the best. Their endeavor is to ensure "Quality at source"
3. They have been audited and certified for Quality by BUREAU VERITAS in accordance with ISO 9001:2008
4. AVT has a win-win relationship with the farmers maximizing net returns to the farmers and ensuring quality produce for the company at optimum price.
MY TAKE
AVT Natural is already a proven SUPER MULTI BAGGER. From a stock price of 40 paisa in the year 2002 (adjusted for splits and bonuses) to a life time high of 50 rupees in the year 2015; this has multiplied investor wealth by approximately 110 times in a matter of 12 to 13 years.
Even if we were to split the stock performance into 2 separate time periods; this stock has been a multibagger twice. 40 ps in year 2002 to 8 rs in 2008 (a 20-bagger); and 4 rs in 2009 to 40 rs in 2014 (a 10-bagger).
Now the million rupee question is "Will it became a multibagger ?". I do believe it has all the potential and capability to become a multibagger yet again from the 40 - 45 levels. Tremendous strength in the existing product portfolio, uniqueness of the business model, proven management capability, and diversification into new but associated business areas; should ensure that the financial and business performance and growth should continue into the foreseeable future. At a PE of around 12 and PB of around 4 this could still become a wise investment idea.
A strong and robust potential multibagger!!
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