NEW YORK, NY / ACCESSWIRE / March 27, 2019 / Diamond Equity Research, a leading equity research and corporate access firm with a focus on small capitalization public companies has initiated coverage of Amira Nature Foods Ltd. (ANFI). The in-depth 16-page initiation report includes detailed information on Amira's business model, services, industry, valuation, management, and risks.
The full research report is available here. Highlights from the report include:
Large Market Opportunity
Amira operates in the global packaged rice market and is a leading provider of Basmati rice, a long-grain aromatic rice with favorable health attributes that can be grown only in specific regions of the Indian sub-continent and part of the Punjab region located in Pakistan. The global rice market is an enormous market with stable growth, while specialty rice and specifically Basmati rice benefits from premium pricing and increasing consumption patterns. Demand for Basmati rice has remained strong over the past 10 years due to the increased consumption trends both in India and internationally. Leading players such as McCormick & Co., Hain Celestial, Rice 'n Spice, LT Foods, East End Foods, and Amira Nature Foods serve local as well as global consumers, which is reflected in the growth of Basmati rice market. The size of worldwide Basmati rice market was approximately $10.51 Billion in 2017 and is estimated to be worth $17.74 Billion by the end of 2022, with a robust CAGR of 11% between 2017 and 2022, according to Transparency Market Research (TMR).
International Business Legally Separated
The international opportunity is enormous, with the company looking to create a $200 to $300 million-dollar international business over the next three years (Amira averaged $320.2 million in international sales during the FY14 through FY18 period). The company plans to achieve this through an improved capital structure, third-party branded offerings, a more internationally oriented management team and opportunistic acquisitions. The company's recent debt conversion reduced its ownership in Amira India from 80.4% to 49.8%, allowing its international business to raise EUR 25mn, which should unlock large shareholder value over time, as the market is now able to value this business on a stand-alone basis.
It is challenging to value Amira Nature Foods given its recent tepid sales and no perfect comparable company and given the fact the company has delayed its annual financial statements. In our comparable company analysis, we screened for small to mid-capitalization companies within the agriculture and packaged food industries. We used a blend of these companies to arrive at a median enterprise value to revenue multiple. We also assume the Indian subsidiary is not consolidated from FY 2020 going forward. From our analysis, we have found the shares to be undervalued with significant upside if the company executes on the international growth and turn around management anticipates. We arrive at a valuation of $4.00 per share valuation using our forecasted 2020 FY revenue of $198 million and a median enterprise value revenue multiple of 1.33 times revenue of Amira's peer group.
About Amira Nature Foods Ltd.
Amira Nature Foods is a major international producer of Packaged Food, Indian Specialty Basmati Rice with over 200 SKUs, with sales across five continents around the world. Amira generates the majority of its revenue through the sale of Basmati rice, a long-grain rice grown only in certain regions of the Indian sub-continent, selling its products, primarily in emerging markets, through an extensive distribution network. The Company was founded in 1915 and is based in Dubai, the United Arab Emirates.
For more information, visit https://www.amira.net/investor/.
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on premiere institutional investor platforms including Factset, Morningstar, and Thomson One. The firm is headquartered in midtown Manhattan.
For more information, visit www.diamondequityresearch.com.
Full disclosures pertaining to this report can be found at the end of the report and on the Diamond Equity Research website disclosure section. Amira Nature Foods Ltd. has paid for this report as company sponsored research, which is meant to subsidize the high cost of creating the report and monitoring the security, however the views in the report reflect that of Diamond Equity Research. Diamond Equity Research LLC is being compensated by Amira Nature Foods Ltd. for producing research material consisting of an initiation research report regarding Amira Nature Foods Ltd. and its securities. All payments are received upfront. As of 03/27/2019 the issuer had paid us $15,000 for our research services, which commenced 03/20/2019 and $2,000 to present at an investment conference. Additional fees may have accrued since then.
Diamond Equity Research
SOURCE: Diamond Equity Research LLC
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