ANFI is a majar International producer of packaged
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countries. It generates the majority of its revenue through the sale of Basmati
rice, a long-grain rice grown only in certain regions of the Indian
subcontinent, selling its products, primarily in emerging
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Looking at what the CEO Mr.
Karan A. Chanana has to say about Amira's successes and failures, it is clear
that he has delivered on most of his statements in the past. In January 2013,
when Amira's brand was selling in 40 countries, he estimated that it will sell
in 70 countries by 2017.
Today [url=http://www.cheapmlboriolesjerseys.com/Brooks-Robinson/]Cheap Brooks
Robinson Jersey[/url] , the brand has already reached sales in 60 countries.
There have been some delays in certain projects like the debt issue where the
attempted offering of $225 million Senior Secured Second Lien Notes due in 2020
failed because of a short-selling attack by prescience Consequently, the
building of the new processing factory that would have enabled even faster
future growth was delayed. But the business model of Amira as it is now is
working pretty well and the earnings are growing. The company is expanding
globally and last year increased its revenue by 35%. Also a development that has
worked was the increase of up to 15 distribution centers in India to exploit the
promising demographics and economic development in India. If we estimate future
projections like the goal of reaching 1 billion in revenues through the analysis
of past projections, we can be very confident in the current management
team.
Possible catches - the cheapness of the Amira stock
As it is not an
US company, investors find it difficult to trust a business from another part of
the world. It is very difficult to call your mate from college and ask about the
building of some distribution centre in north India. On the other
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rice they sell. For me, those are stores like tesco, Asda, Waitrose and Morrison
in the UK and for US readers it should be Costco with new additions coming month
by month. This research aims to show that unfamiliarity can be a great play for
investors.
The second issue is the financing problem that arose after missing
the bond issue because of a short-seller attack a few months ago. This was quite
unfortunate for Amira because of the relatively high interest rates in
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is very positive by itself. The way Amira does business now by financing
operations through a consortium of Indian banks works pretty well, so a future
possible lowering of the interest rate would only be beneficial.
The third
issue that is also related to the second one is the continuous delays in
finishing the new factory because of lack of financing. The CEO promises updates
on finishing factory in the next quarterly presentation. The new factory would
only improve the growth possibilities and future outlook for Amira.
The forth
possible issue is the expected growth of the rice crop 2015 that will impact
volume, thus lower prices. Also not such a bad thing because the consumer will
get a better price and Amira will have the opportunity to increase the margins
and pass some of the price decreases to its customers.
The fifth issue is
that the organic product is still not on US shelves. Here it has to be said that
the business model of Amira involves an aging process of more than 12 months, so
it takes time for the new product lines to reach its customers. It is
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investors to buy a gem in the making, and let it age to grasp all the flavors by
letting it become older and better (the rice and also the stock). The CEO
announced the organic product line on US shelves by the end of this year.
The
sixth issue could be the possible diminishing demand from Middle East countries
because of lower oil prices and thus lower purchasing power. Amira wants to be a
global player, and partly already is one, so geographical diversification lowers
specific geographical risks.
The seventh reason can be the very extensive
global growth plans that might be overstretching the possibilities of Amira and
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available financing plus negotiations for more finances should help, and a low
debt-to-equity ratio makes this an unlikely risk (Total debtLTM adj. EBITDA =
2.0x). A financial crisis that would hit the eastern markets might shake a
little bit its financial position, but again, with the growth going on in
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expects rice market volume to grow at a CAGR of 7% in India for the coming
years.
The eighth reason can be that Amira is developing a brand strategy.
You probably know of places where the atmosphere is nicer, the coffee is better
and much cheaper than at Starbucks but the brand is what attracts people to it.
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