The stock is currently trading at TTM PE of 19.69x and TTM EPS of Rs.2.76 along with P/BV of 4.94x. Company is in niche products portfolio, strong financial performance, zero debt status, planning for capacity expansion and backward integration in china. Accumulate.

1. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Techno-Funda Pick AVT Natural Products Ltd.
Report Details –
1. AVT Natural Products Ltd. - Fundamental
2. AVT Natural Products Ltd. - Technical
September 12, 2014
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2. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Financials:
CMP(`) – 53 STRATEGY : ACCUMULATION Target Price(`)- 61-64 Stop Loss(`)-46 Holding Horizon: 3 months Sensex – 27005 Nifty – 8085
STOCK MATRIX
Sector
Other Agricultural Products
52 Week High/Low
54/17.50
No.of Shares (Cr)
15.23
FV (`)
1.00
Latest BV(`)
11.01
Market Cap (` Cr)
791.12
Beta
0.99
Latest Dividend (`)
0.45
BSE Code
519105
NSE Code
AVTNPL
SHAREHOLDING (%) Price Performance compare to SENSEX
Date: 12/09/2014 CMP – 53 ACCUMULATION Target Price: 61-64 Background: AVT Natural Products was incorporated in 1986 as AV Thomas Industrial Product and promoted by Mr. Ajit Thomas. Company is in business of manufacturing food safe natural flavor and color production. Products of company include producing marigold oleoresins, spice oils / oleoresins, Natural Flavors, Natural Color, Essential oils, Antioxidants, Specialty products, decaffeination of tea, instant tea. Company is the largest exporter of Marigold oleoresins in the world. It has formed strategic alliance with Ball Helix, USA who is the world's best Marigold seed company; and Kemin Health, USA, the world's largest customer for nutraceutical grade marigold oleoresin. Investment Rationale:
 Company started marigold cultivation on a land area of 200 acres, which has grown to 35,000 acres and produces 100,000 metric tones of flowers.
 The company is also a vendor to a certified unit of Kemin Foods, the world’s largest producer of Lutein from marigold. Lutein & Zeaxanthin product use in pharmaceuticals for eye care which is contributing nearly 65% in revenue of company as per FY14.
 Company is planning to expand its Decaffeinated Tea business capacity to 75% to 80% till 2016-17 from currently 50% capacity. Also introduce Green Tea and Instant Black Tea to value added Beverages product portfolio.
 Company posted 35% CAGR in revenue 58% CAGR in PAT in last 5 years. Average last 5 years ROE (%) & ROCE (%) of company is 34.30 and 39.07 respectively.
 Company is zero debt with total debt/equity is 0.03.
 Company planning to do a backward integration in China to take benefit of low cost feed grade marigold.
AVT Natural Products Ltd.

3. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Balance Sheet (` in Crore) (Consolidated):
DESCRIPTION
March-10
March-11
March-12
March-13
March-14 SOURCES OF FUNDS:
Share Capital
7.61
7.61
7.61
7.61
15.23 Total Reserves 42.53 48.96 93.81 130.84 152.45
Total Non-Current Liabilities
52.67
9.98
7.80
6.28
5.55 Total Current Liabilities 16.61 72.91 86.47 83.04 63.68
Total Liabilities
119.42
139.46
195.69
227.77
236.91 APPLICATION OF FUNDS :
Net Block
37.94
36.96
38.66
45.04
50.57 Capital Work in Progress 2.59 0.18
Non Current Investments
0.00
0.77
Long Term Loans & Advances 0.47 0.52 0.65 1.05
Total Current Assets
81.48
102.03
156.51
178.72
185.11 Total Assets 119.42 139.46 195.69 227.77 236.91
Profit & Loss account (` in Crore) (Consolidated):
DESCRIPTION
March-10
March-11
March-12
March-13
March-14 Operating Income 87.64 147.87 248.97 269.08 292.82
Less: Excise Duty
0.07
0.36
0.06
0.20
0.09 Net Sales 87.57 147.51 248.91 268.88 292.73
Other Income
0.20
0.13
0.61
0.10
0.94 Total Revenue 87.77 147.64 249.52 268.98 293.67
Total Expenditure
70.43
122.21
159.30
185.65
219.24 EBIDTA 17.34 25.43 90.22 83.33 74.43
Interest
3.87
5.24
6.50
6.43
2.28 PBDT 13.47 20.19 83.72 76.90 72.15
Depreciation
3.14
3.46
3.57
3.98
4.96 PBT 10.33 16.73 80.15 72.92 67.19
Provision for Tax
3.6
5.63
25.37
25.14
25.11 Profit After Tax 6.73 11.10 54.78 47.78 42.08
Consolidated Net Profit
6.73
11.10
54.78
47.78
42.08

4. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Key Ratios:
DESCRIPTION
March-10
March-11
March-12
March-13
March-14 Performance Ratios
ROA (%)
6.05
8.58
32.69
22.57
18.11 ROE (%) 14.00 20.82 69.34 39.85 27.49
ROCE (%)
15.35
20.84
68.6
50.52
40.03 Efficiency Ratios
Fixed Capital/Sales(x)
0.68
0.44
0.28
0.28
0.28 Receivable days 132.38 117.62 80.83 65.1 51
Inventory Days
136.93
77.36
70.31
106.06
109.13 Payable days 32.84 26.42 22.94 24.49 26.89
Growth Ratio Net Sales Growth (%) -8.92 68.47 68.73 8.02 8.87
Core EBITDA Growth (%)
-4.99
46.75
254.56
-7.64
-10.67 EBIT Growth (%) -8.71 54.83 294.18 -8.42 -12.45
PAT Growth (%)
-5.51
65.25
393.01
-12.75
-11.95 Financial Stability Ratios
Total Debt/Equity(x)
0.96
0.99
0.38
0.26
0.03 Current Ratio(x) 4.91 1.40 1.81 2.15 2.91
Quick Ratio(x)
2.92
0.99
1.04
1.07
1.57 Interest Cover(x) 3.66 4.20 13.33 12.35 30.39
Recent Financial Performance: The June 2014 quarter revenue stood at Rs. 90.26 Cr, up 38.48% as compared to Rs. 65.18 Cr during the corresponding quarter last year. A fall of 1.84% was recorded in the Net profit for the quarter ended June 2014 to Rs. 12.81 Cr from Rs. 13.05 Cr. The company reported a 1.77% fall in operating profit for the quarter ended June 2014 to Rs.20.50 Cr compared to Rs.20.87 Cr of corresponding previous quarter. A fall of 52.38% in Interest cost the quarter ended June 2014 to Rs. 0.10 Cr from Rs. 0.21 Cr.

5. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Outlook & Valuation: The stock is currently trading at TTM PE of 19.69x and TTM EPS of Rs.2.76 along with P/BV of 4.94x. Company is in niche products portfolio, strong financial performance, zero debt status, planning for capacity expansion and backward integration in china. We recommend our Investors / Positional traders to “ACCUMULATE” the AVT Natural Products Limited for the Target of Rs. 61-64 with keeping strict Stop Loss of Rs.46 on closing basis. Investment horizon would be 3 months.

6. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Technical Outlook Daily Chart: AVT Natrual Products Ltd. (CMP- 53) Daily Chart: Analysis: Stock has made 52 week high of 55 (12th Sept. 2014) & 52 week low of 17.50 (17th Dec. 2013) Stock is in strong up trend by making higher top and higher bottom on daily chart. Stock is tagging the upper Bollinger band suggest bullish strength in this counter. Stock has given a trendline breakout which suggests the upward momentum may continue further. Stock is above its 20 day SMA, 50 days EMA, 100 days EMA & 200 days EMA suggests strong uptrend.
Considering above all factors, Buy AVT Natrual Products Ltd. CMP-53 for the possible target 61- 64 with the stop loss of 46 on closing basis for 3 month time horizon. Note:*Maintain Stop Loss on Closing Basis.

7. Registered Office: Malhar Complex, Dumas Road, Ichchanath, Surat – 395007. Tel (0261) 305 5555,
Email: research.report@jainam.in Website : www.jainam.in,
Research Team
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