Venky's (India) hits new high; stock zooms 1600% in two years

The stock hit a new high of Rs 4,530 in intra-day trade, rallied 69% in past seven trading days against 1.3% rise in the S&P BSE Sensex.

Venky’s (India) continued its upward march for the seventh straight trading day, hitting new high of Rs 4,530, up 15% on the BSE in otherwise subdued market. The stock rallied 69% from Rs 2,673 on February 20, 2018, as compared to 1.3% rise in the S&P BSE Sensex.

In past two years, the market value of Venky’s (India) zoomed 1610% from Rs 265 on back of the improved financial performance. On comparison, the benchmark Sensex was up 43.6% during the period.

Venky’s (India) operates three business segments, namely poultry and poultry products, animal health products and oilseed.

For the first nine months April to December(9MFY18) of the current financial year 2017-18 (FY18), Venky’s (India) reported 79% year-on-year (YoY) growth in net profit to Rs 1,485 million against Rs 830 million during the same period of previous financial year 2016-17 (FY17). The company had posted net profit of Rs 1,248 million in entire FY17.

After reporting 45% YoY decline in net profit at Rs 187 million in FY15, Venky’s (India) posted more-than-double net profit of Rs 382 million in FY16.

EBITDA (earnings before interest, tax, depreciation and amortized expenses) margin also improved from 5.9% in FY15 to 6.4% in FY16 and 11.2% in FY17. EBITDA margin for 9MFY18 stood at 14.8% against 10.1% in 9MFY17.

“Better realizations for the poultry and poultry products segment helped the segment to register the improved performance as compared to the previous year. The performance of the oilseed segment was also better as compared to the previous year due to higher capacity utilization and better realisation,” Anuradha Desai, Chairperson, Venky’s (India) said in FY17 annual report.

Analysts at Quantum Securities believe Venky’s is in a good spot with benign raw material prices and robust poultry prices. However, the stock is trading above its target price of Rs 3,498.

At 01:07 pm; Venky’s trading 12% higher at Rs 4,404 on the BSE, as compared to 0.08% decline in the S&P BSE Sensex. The trading volumes on the counter surged more than four-fold with a combined 1.45 million equity shares representing 10% of total equity of the company changed hands on the BSE and NSE so far.