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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