Arihaan Capital
Long/short equity, special situations

Amira Nature Foods: More Questions, Fewer Answers

Amira Nature Foods (NYSE:ANFI) released Q3, FY2014 results on 2/25/14 that beat on the top-line but missed consensus EPS estimates. We believe the earnings release provided further validation of the unraveling of the ANFI growth story, and we continue to have the highest conviction that ANFI represents an extremely compelling short opportunity at current levels.

Below, we highlight some key red flags discerned through analysis of the earnings release and conference call transcript. Note that the 6-K is yet to be filed, and we will update our thoughts accordingly.

A. Poor quality of earnings

The tax rate of 18.95% was the lowest reported over the past 11 quarters. To put this in context, the tax rate in...

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