Thursday, March 15, 2012

AVT Natural - maintain Buy. In full bloom

AVT Natural.LTP/CMP 363 +10% on BSE volumes of ~8x higher i.e 22k shares vs 2.9k 2 weeks average.
 Had maintained BUY with target of 600  in Oct 2011 inspite of 4x rise in 6 months and maintain the same i.e +65% upside. (Initiate Buy given in Oct 2010 at price of 85). Past posts here.
Today AVT Natural announced that a meeting on 27- Mar- 2012.It will meet for deciding interim dividend and stock split.For this year it has already given dividend of 2.5 Rs per share.Details below

Here is the latest 9 months FY12 (Apr to Dec `11) results vs YoY
  • Revenue = Rs. 170 crores. Up 100% YoY
  • EBITDA Margin = 39% vs 17%
  • PAT = 39 crores up 7x or 600%
In fact, based on past dividend payout ratio of 30%, this year it can give dividend of  20 per share. But given it has debt of ~30 crores,management can give priority for debt repayment rather than dividend.
In past 4 quarters, Promoters have increased their shareholding from 69.4% to 74.3%
  • Since July 2011, has been rangebound between 270 and 470. Currently at 363, i.e mid of the past 9 month range.i.e decent entry level.
  • Good support levels at 200 days EMA of  302 and 200 simple DMA of 328
Valuations still offers upside.
  • EV/EBITDA of 3.5x. PE of 5.5x . PSR of 1.2x.
  • ROE to jump to ~ 65% this year FY12 ( from ROE of 21% in FY11)
Details in below table. (Click to zoom)
Disclosure : Been holding since past 1 year. Plan to add more.

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