Sell Venky’s India; target of Rs 3700: Kotak Securities

Kotak Securities' research report on Venky’s India

Venky’s stock has now run up 216% since we initiated coverage (July, 2017) on the stock. In the last three months, the stock has appreciated 85%, as strong earnings performance in recent quarters has led to better perception among investors, aiding a re-rating. In our last update (March, 2018), we had noted signs of weakening poultry prices.

Outlook

Given the weakness in poultry prices over the past six weeks, the run-up in the stock over the past month has likely been excessive, and takes for granted a significant rise in poultry prices. We believe there is a high likelihood of a significant decline in Venky’s stock over the next year. We downgrade the stock to SELL, with a price target of Rs 3700. For all recommendations report, click here

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