Company Update: Venky's India Ltd - ACCUMULATE - TP Rs.4600 - Kotak

Venky's India has run up 43% since our last update (February, 2018). With this, the stock has returned 190% since we initiated coverage, in July 2017. While valuations of the stock have expanded significantly, we believe the same is sustainable, assuming that raw material prices rise only to the extent of 5-year average by FY20. We introduce FY20 estimates, and expect 22% CAGR in earnings through FY18E-FY20E. We believe that EBITDA margin shall be stable between 14.5-15.5% through our forecast period, which will improve investor perception and participation, helping sustain valuations at 20X+ one-year forward PER (~25-30% discount to small/ mid-cap FMCG players) over the medium-term. While we raise our price target to Rs 4600, we downgrade Venky's a notch to ACCUMULATE (BUY earlier), as further upside appears to be largely dependent on maintenance/ enhancement of re-rating witnessed in the recent past

Shares of VENKY'S (INDIA) LTD. was last trading in BSE at Rs.4126.6 as compared to the previous close of Rs. 4346.75. The total number of shares traded during the day was 127800 in over 15962 trades.

The stock hit an intraday high of Rs. 4559.95 and intraday low of 4080. The net turnover during the day was Rs. 543379289.

Source : Equity Bulls

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