Limited downside in Venkys: A Chugh

Chugh told CNBC-TV18, "Venkys is a leader in its business segment, when one thinks of poultry Venky’s is the number one player in the industry and this is an industry where you can’t even think of number two. So the business is very good they are the leaders in the business. What is happening now is that we have seen increase in commodity price lately. Prices of all commodities be it rice, wheat or vegetables are going up. I think this is going to lead to increased demand for poultry products, of course the risk in their business is number one we keep hearing cases of bird flu coming off and on, which spoils the sentiment in the company and the industry and the second risk is an increasing maize prices."

He further added, "This company will be able to pass on the increased maize prices in the form of higher poultry prices and because of which the prices of poultry products can go up in the future. So this is a company where we like the business, we like the leadership status of the company, that fact that it is a scalable business. The fact that it is trading at a very reasonable price to earning ratio of about 5 and a very reasonable marketcap of just about Rs 140-150 crore. So from these levels the downside looks restricted but this could give superior returns to the investors."