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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS Buy these smallcap dark horses now Value picks in smallcap space ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Venkys BSE | NSE 31/05/12 Are Mutual Funds betting on Venkys? Other Stocks in this news CMI FPE | Nectar Lifesciences | United Spirits |

Investment Analyst, Ashish Chugh, gives his picks in the smallcap space. According to him  Venky's India is a contrarian pick in the poultry industry. He believes that Venkys has the potential to become the  McDowell of the poultry industry. He advises investors to accumulate this stock.  

Talking about Flat Products , he believes that the company will report good earnings in the coming quarters, and this will lead to interest of many more players into this stock.  

Nectar Lifesciences , in his opinion, looks grossly undervalued compared to its IPO price and the GDR price. As a result of its expansion plans, this company is expected to log much higher revenues and profits, he says.   

Excerpts from CNBC-TV18's exclusive interview with Ashish Chugh:

Q: Why do you like  Venky's ? Why would you buy it at Rs 137?

A: Venky's India is a contrarian pick in the poultry industry. This company faced a very tough time in the last one year, this was primarily because of the bird flu that spread in the January-March quarter. As a result of that the operations of the company was severely affected.

The company reported a loss of about Rs 4 crore in the January-March quarter. Inspite of that loss, the company has managed to make a profit of about Rs 11 crore for the full year.

Now the fears of bird flu have started receding and the company seems to be getting back on track. This company is the largest player in the poultry industry and it is an integrated player in the sector.

This company is strong in the institutional segment and supplies its products to all major hotels and Indian and multinational food chains like McDonald, Pizza Hut and KFC.

When one talks of the poultry industry, Venky's is the only large player. There may be other players, but they are all small players. Venkys is probably the only national player in the sector. When one talks of the poultry industry, one  cannot even recall a number two.

So Venky's is a company where, given its size and scale of operations, it has the potential to attract institutional investors. Ofcourse they will get in after the marketcap has gone a couple of times from these levels, and after there is more visibility in terms of the company's earnings.

This company otherwise has been a consistent dividend payer and it has been paying regular dividends to its shareholders for many years now. Even when the company was faced with the worst of its times, it paid dividend to  shareholders.

Investors can use this sentiment in the company and accumulate this stock. It may turn out to be the McDowell of the poultry industry.

Q: In terms of earnings, what are you expecting from that company because the last quarter was not very strong like you said?

A: This company reported a loss in the January-March quarter and in the April-June quarter also, the profits were lower than the corresponding quarter last year.

But I think given the fact that the fears of bird flu are now receding and the company has undertaken expansion in the last one year, going forward, one can see the sales revenues and the profits of the company going up substantially from these levels.

I think the worst is already built into the price and you don't have much to lose from these levels. A good quarter is going to catapult this stock to a different orbit.

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