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Sell Venky’s (India), target Rs 3,700: Kotak Securities Limited


Kotak Securities has a sell call on Venky's (India) with a target price of Rs 3700.

The current market price of Venky's (India) is Rs 4571.50.

Time period given by the brokerage is Long Term when Venky's (India) price can reach the defined target.

"Venkys stock has now run up 216 per cent since we initiated coverage (July, 2017) on the stock. In the last three months, the stock has appreciated 85 per cent, 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. Over the last month, decline in poultry prices has been sharper (more than 20 per cent decline y/y), which is likely to affect near-term performance of the stock negatively. Moreover, industry sources indicate that there may be an excess supply in the poultry market (supply has risen faster than anticipated demand growth), which could affect medium-term earnings. We lower our (poultry) pricing assumptions, leading to a cut in gross margins/ earnings. With FY19E/20E earnings estimates 15 per cent/16 per cent lower, we cut our price target to Rs 3,700 (Rs 4,600 earlier). Downgrade to 'SELL' as we think there is a high likelihood of significantly lower entry points in the stock (for longer-term play)," Kotak Securities said in a report.

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