Founded in 1915, Amira Nature Foods (ANFI) is a leading provider of packaged Indian specialty rice, predominantly “Basmati” rice. Rising analyst estimates sent the stock back to Zacks Rank # 1 (Strong Buy) last month.
The company has successfully evolved from a domestic Indian business to a global growth company with its strong brand and product innovation, excellent supply chain and well-established relationships with leading retailers. They are now based in Dubai and had their IPO in 2012.
The company sells its products in more than 40 countries around the world. During FY 2014, EMEA accounted for 43% of Amira’s sales, while 41% of sales were in India.
Solid First Quarter Results
Amira reported its fiscal first quarter 2015 results on August 28. Revenue for the quarter jumped about 26%, to $138.8 million. This was driven by increased volumes, price & mix, both in India and globally.
Sales in India increased by more than 30% (excluding currency impact) and international sales also increased by about 30%. Adjusted earnings increased by 24% to $0.26 per share, from $0.21 per share in the prior-year quarter, significantly ahead of the Zacks Consensus Estimate of $0.16 per share.
The management expects 20%+ revenue growth in FY 2015.
Positive Earnings Estimates Revisions
After impressive earnings, Zacks Consensus Estimate for the current year and next year have increased to $1.43 per share and $1.75 per share respectively from $1.35 per share and $1.72 per share, 60 days ago. The following chart shows the positive earnings momentum:
Rising estimates sent Amira back to Zacks Rank #1 (Strong Buy) last month.
Solid Industry Outlook.
“Agriculture Operations” industry is currently ranked 10 out of 265 Zacks Industries (top 4%). Amira’s specialty product–Basmati rice which is well known for its aroma and taste–grows only in the Indian subcontinent. Being superior quality, this rice commands premium price and high margins.
Basmati rice is used extensively in Indian cuisine. Rapid growing middle class in India with rising incomes is positive for Amira as more and more families are willing to spend more on better quality food.
Further, with its strong presence in some key growth international markets for its products, Amira looks poised for strong growth in the coming years.
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