Chennai: The end of bad days for stocks in aquaculture segment has come, as a report states that India’s shrimp exports are gaining momentum.
According to brokerage house Equirus Securities, the positive sign will help Avanti Feeds and Apex Frozen – two prominent names in the segment – as their stocks fell 43 per cent and 47 per cent, respectively.
Equirus has a target of Rs 520 on Avanti Feeds as well as Apex Frozen with an investment horizon of one year. The brokerage expects the earning per share (EPS) of both companies to decline in FY19 and then rise in FY20.
Avanti Feeds slipped from Rs 721 to Rs 408 and Apex Frozen Food plunged from Rs 621 to Rs 324 in the last 12 months.
Equirus expects Avanti Feeds’ EPS to tank 35.7 per cent in the current fiscal year and similarly, Apex Frozen’s EPS is expected to fall by 17 per cent.
However, the EPS is expected to see a surge in FY20, as the report suggests, Apex Frozen will see a massive 66 per cent year-on-year (YoY) rise and Avanti Feeds will see a jump of 24 per cent in their respective EPS.
“We have highlighted earlier that after strong volume growth of 32 per cent in CY17, Indian shrimp exports decelerated to over eight per cent YoY in CY18. This was mainly due to a weaker second crop that led exports to decline three per cent YoY in H2CY18,” the report said.
However, shrimp exports started recovering in December 2018 and the surge continued in January 2019 as well, the report said.
The weakness in EPS for FY19 corresponds to the trend in shrimp export from India. The shrimp export volumes grew seven per cent YoY in January. But, in terms of value, exports declined six per cent YoY in the month compared to a 12 per cent fall in December.
The US continued to be the preferred destination as two-fifths of all exports went to Washington. China also contributed to the rise in shrimp export from India. Its share rose to 17 per cent in January, compared to three per cent last year.