VENKY INDIA LIMITED
 
  

 
 

SHARETIPSINFO >>Research Reports >> VENKY INDIA LIMITED (14-01-2009)

 

COMPANY OVERVIEW:
Company was incorporated as private limited company on 1st July 1976 and later converted to public limited company on 12th December 1988.
The Company's principal activities are to own and operate chicken and broiler breeding farms. It has three segments: poultry and poultry products, animal health products, and solvent extraction. The Company's major business segment is poultry and poultry products, which consist of production and sale of day old broiler and layer chicks, specific pathogen-free eggs and processed chicken products. The Animal Health Products segment includes manufacturing of animal health care products. The Solvent Extraction segment includes production of edible oil.
Today, the Venky Group is a Rs. 1300 Crore conglomerate, the largest fully integrated poultry group in Asia and offers under one roof, total support for poultry development. The group's greatest success has been its ability to indigenize the Babcock (layer) and Cobb (broiler) breeds, while maintaining world standards in productivity and performance.
 

DISTRIBUTION NETWORK:
The Group's nationwide network of 38 layer, 38 broiler associate hatcheries and 156 broiler integrated hatcheries, the Indian farmer can avail of day-old chicks right at his doorstep.


PRODUCT MIX:


PRODUCT NAME

 

SALES VALUE

% OF THE TOTAL

CHICKS

 

 

99.42

 

19%

 

OIL REFINED

 

71.79

 

13.70%

 

DE OILED CAKE

 

64.44

 

12.30%

 

COMMERCIAL BOILERS

61.5

 

11.70%

 

PROCESSED CHICKEN

60.57

 

11.55%

 

ANILMAL HEALTH

POWDER

45.36

 

8.70%

 

POULTRY FEED

 

34.68

 

6.60%

 

MISCELLANEOUS

 

27.84

 

5.30%

 

SPF EGG

 

 

23.42

 

4.50%

 

ANIMAL HEALTH LIQUID

19.55

 

3.75%

 

OTHER SALES

 

8.81

 

1.70%

 

BROILER GROWN UP

7.17

 

1.40%

 

PARENTS SERVICE CHARGE

0.34

 

0.06%

 

TOTAL

 

 

524.89

 

100%

 

SHAREHOLDING PATTERN:

 

 

NO.OF SHARES

% OF TOTAL

PROMOTER

5058655

 

53.86%

 

INSTITUTION

148333

 

1.58%

 

GENERAL PUBLIC

4184569

 

44.56%

 

GRAND TOTAL

9391557

 

100%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

347.52

383.78

416.88

528.38

EXPENDITURE

-311.24

-356.65

-386.57

-469.57

OPERATING INCOME

36.28

27.13

30.31

58.81

DEPRECIATION

-6.02

-6.17

-7.34

-8.27

PBIT

 

30.26

20.96

22.97

50.54

INTEREST

 

-3.43

-3.17

-4.83

-8.72

PBT

 

26.83

17.79

18.14

41.82

TAX

 

-10.16

-6.02

-6.62

-15.21

PAT

 

16.67

11.77

11.52

26.61

 

CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 14.98%.

CHANGE IN OPERATING INCOME: CAGR IN OPERATING INCOME IS 17.4%.

CHANGE IN NET PROFIT: CAGR IN NET PROFIT IS 16.9%.

RATIOS:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

 

EPS

17.73404

12.52128

12.25532

28.30851

 

OPM

10.43969

7.069154

7.270677

11.13025

 

NPM

4.796846

3.066861

2.763385

5.036148

INTEREST COVERAGE

8.822157

6.611987

4.755694

5.795872

 

VALUATION & OUTLOOK:
The company is not a growth stock, so any exponential gain should not be expected from the counter. The value at which the company is trading right now is very tempting. At cmp the company is trading at 1.75x to past years earning and 3.6x to average of past 4 years eanrning. Company has  the track record of paying dividend. On an average it pays dividend of 35% yearly. This translate the dividend yield 5.36% at current rate. We expect the operating profit margin increasing as the raw material prices are decreasing world wide. Considering its leadership position in the industry ,the stock is trading at discount to its fair value. We expect the price to be anywhere near Rs82.


CONCLUSION:
The counter has low downside risk and has the potential to give return of atleast 25% from this level. At the time when market is very volatile and it is difficult to gauge the movement these counters help you preserving the capital and earning decent return.

 

 

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