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Showing posts with label Agriculture. Show all posts
Showing posts with label Agriculture. Show all posts

Wednesday, September 19, 2007

Venkys India

At the current market price of Rs. 180/- the stock trades at 6 times it FY08E earnings of 30 per share. Investor with a medium risk profile can consider position in this stock for a duration of 9 to 12 months with a target of Rs.250. The company has seen a substantial increase in Operating margins during the last two quarters and is expected to maintain the same margin levels in the current year.

Venky's India is engaged in poultry breeding, processed chicken, poultry medicines, producing eggs and hatching layer. Venky's has a strong domestic presence and the domestic sales is expected to grow 15% this year. The company has annual service contracts with multinational giants like Domino's, Pizza Hut, KFC and McDonald's. Venky's has strong export presence in middle east and Asia pacific region. The revenues from export is expected to grow at around 30% this year.

Fundamentals:

1) Diversified product portfolio.

2) Government policy initiatives for agricultural projects.

3) Strong client portfolio.

Risks:

1) Bird flu which has been off late seen frequently appearing in some of the Asian countries can dampen the revenue forecast.

2) Competition from countries like Thailand, Vietnam and china which operate on lower cost.

Posted by Srivatsan 2 comments

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Fundamental Analysis

Fundamental Analysis is the cornerstone of Investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis.

During fundamental analysis we look at a stock from three aspects

Company

At the company level, fundamental analysis may involve examination of financial data, management, business concept and competition.

Industry

At the industry level, there might be an examination of supply and demand forces for the products offered.

Economy

Fundamental analysis might focus on economic data to assess the present and future growth of the economy.

To forecast future stock prices, fundamental analysis combines economic, industry, and company analysis to derive a stock's current fair value and forecast future value. If fair value is not equal to the current stock price, fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value. Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient.