 Good day fellow investors! My name is Sven Karlin and today I'll update you on Amira. Exactly one month ago I published a video describing my long case for Amira and the stock is now up about 30%. So there has been a lot of fuss about Amira. It became suddenly a hot stock after nobody was looking at it for a while. So I want to discuss a little bit what's my fair value, what's my target price and what should be a fair intrinsic value of Amira and what is the long-term fair value for Amira. In addition, as I always recheck my investments, check the data, the figures, I have rechecked Amira's balance sheet and book value and I have an update on that also that's very significant for Amira's margin of safety. Let's start with the new findings that increase Amira's margin of safety. This is very important because you want to invest in companies that have huge value and high potential, thus low risk and high potential. What I found thanks to a fellow subscriber sending me some info that I should relook this information, I went to check Amira's property, plant and equipment account on their balance sheet and to check what's really behind that account, behind those numbers and there is a big imbalance and it's a very positive imbalance. So stay tuned. If we take a look at Amira's balance sheet we can see that the last report shows 19.9 billion on property, plant and equipment. Amira's book value for that property, plant and equipment is around 35 million. Accumulated depreciation goes down to the current 19 million. According to Amira's sex feeling, Amira has a rice meal and some land. To be more precise on the land, it has 20 acres of land in Guargon, Haryana, India and 48.2 acres in Kamal also Haryana, a little bit more on the north from New Delhi. So Amira bought the 48.2 acres in Karnal to buy even more land there, which is owned by the Channada family, the owner of Amira, in order to build a new processing plant that will increase throughput from 24 tons per hour to 60 tons per hour in order to facilitate growth, in order to buy more paddy, which when aged allows for higher margins, it's very smart what they are doing. I hope that in the next year, two years, Amira will be able to have some bond financing that will allow it to buy the land and then to continue to grow as planned before the short-seller attacks. However, that land in Karnal, according to an independent report, is valued at $350,000 per acre. Summing it all up 48.2 acres times $350,000 per acre, we come to about $16 million. So just an example here, I have found two plots in the nearby vicinity of Anfis plot, and you can see that for 6.82 acres, the second one is 30 crores, one crore is $155,000, the other one is 7.75 acres for 9 crores. Thus, the first one is $180,000 per acre, the second one is $681,000 per acre, the first is for a school, the second is for a rice mill. Thus, this could also lead to double Amfis value, but let's take the $450,000 per acre as proper value for the mill. Thus, we keep the $16 million. The part of land that's even more interesting is the land in Guargon, closed a little bit south from New Delhi, where Amfi has its own current mill now. Those are 20 acres in Gurgaon, Haryana, India. You can just type it in Google Maps and you will find Free Amira Foods India, of which one is the rice mill close to New Delhi. Now, what's very interesting is that Amfi's 20 acres of land are very close to new developments being built, new residential developments. Now, I remind myself that the management's target was to sell this plot after building the new plot in Karnat. This would allow Amfi to receive a huge chunk of money for this land and process more rice in the future. So, what's really interesting about Amfi is that the management is smart, value-creating and long-term value-creation oriented. Just the management you want in place. Where is Amfi's mill? 40 kilometers south from New Delhi. Now, I have looked a bit around and one of the new developments is Godre Oasis. Looks like this, so very modern, very expensive flat. I have found similar land plots that are priced at 3.4 million per acre, the above one 20 acres for 250 crores and 2.9 million per acre for the 9 crores per acre, the lower one. We have 20 acres time, 3.5 million dollars per acre goes to 68 million for the value of the land. 68 million plus the 16 million according to my calculation is 84 million dollars. 84 million dollars minus the 20 that are on the book value, that are on the balance sheet is 64 million dollars divided by the number of shares, 45 million you get a value of 1.8 dollars per share to be added to the already higher than stock price book value. Thus, we have just increased Amfi's margin of safety. I always tell my students never trust numbers on the balance sheet. Always go beyond the number, see what's really beyond that number, what really makes that number and in this case it is high land values. Sometimes there is nothing but in this case it's a positive. Now, we have added almost 2 dollars per share on Amfi's margin of safety and this is also very important because now I understand that Amfi will not have liquidity issues because when you have such a collateral Indian banks will give them money easily because they know they will get the money back. If Amfi would liquidate now, we have the book value 7.721 plus 1.8 plus the margin on the sold rice which should be relatively strong because basmati prices went up. I think that the liquidation value for Amfi now is at least 12 dollars. So, there is a huge margin of safety and a huge upside potential to reach a fair value. So, what's the fair value for a company like Amfi? We have liquidation value of 12 dollars. We have earnings that are expected to be around 1.5 for next year and then continue growing as Amfi has been growing in the past. How fast has Amfi been growing? Well, in 2012 revenues were 340 million, they are now 575 million and with the higher basmati prices they will be around 800 million next year. So, in six years Amfi will have grown revenues for 142 percent, thus 15 percent per year and with all the new developments building the new rice mill distribution centers across India, we can easily expect that to continue in the future. So, what's Amfi's fair value? Liquidation value is 12 dollars. Earnings per share are 1.5 dollars. I want a 10 percent return on my investment given Amfi is growing at 15 percent per year and willing to go a little bit lower. So, I would attach a fair price earnings ratio of 12 to Amfi's earnings. 1.5 times a price earnings ratio of 12, we get a fair value of around 18, thus still a long way to go. Now, this is me. I have much stronger criteria than normal investment funds, pension funds, index funds. Look at the nifty, the Indian price earnings ratio will show us that Indian companies, thanks to the economic growth, thanks to their business growth, are priced much, much higher than Amfi. The average price earnings ratio in the past has been around 20 and now is at 25. 1.5 dollars of earnings times a price earnings ratio of 25, Amira's fair market value would be around 37.5. There can be a lot of debate whether the Indian stock market is overvalued, but given the huge economic growth, that's very debatable, so let's say 20 price earnings ratio would be fair, then we see Amira at 30. Is it possible if everything that the management has started doing, if the next timely published annual report leads to rating and then leads to a bond issue, then we can sure expect wonderful things for Amira. So, don't get too excited. On the 30% stock price increase, that's just the start. Amira can really become a nice 5 to 10 beggar in the next year or two. Subscribe, because I'll be discussing more about Amira, about the long-term Basmati prices cycle, how that affects the company, their Basmati prices and margins, how will a new mill affect the company with higher earnings, higher potential earnings due to higher margins. So, there's a lot to talk. We'll first wait for the earnings report end of the month. I'll analyze that and when I have more time somewhere in August, I'll go on with the analysis on the Basmati sector, their margins and so on. There's plenty more to learn about Amira and to follow. Let's hope the stock price follows our learning curve. Thank you for watching, share this video, leave your comments below and I'll see you in the next video.