Chhota (to) MOTA ideas: Venky's (india) Ltd - REDUCE - TP Rs.2200 - Kotak

- A fortnight ago, we published our report on Venky's (India), with a price target of Rs 2150 (i.e. 50% upside over nine months), and a belief that the stock had potential to rise to ~ Rs 2900 over a two-year horizon, incumbent on certain assumptions. The stock breached our price target in five sessions, and has been consistently trading ahead of our (March' 18) price target. As of now, the price change has been driven solely by a re-rating, and we face a choice between raising our investment horizon and downgrading the stock. In the interest of consistency (all our reports carry a 6-9 month price target), and prudence (high dependence on gross margins as driver of earnings, thus lower visibility on a 2-year basis), we choose the latter. While we continue to remain constructive on 2-3 years' horizon, we believe the stock shall be bounded to 15-16x FY18E PER in the medium-term. Our price target remains close to prior levels (Rs 2200, versus Rs 2150 earlier); we downgrade the stock to REDUCE (BUY earlier). We would be looking for better entry points / indications of positive earnings surprise for turning buyers.

Shares of VENKY'S (INDIA) LTD. was last trading in BSE at Rs.2014.3 as compared to the previous close of Rs. 2155.8. The total number of shares traded during the day was 42149 in over 4943 trades.

The stock hit an intraday high of Rs. 2166.5 and intraday low of 2003.15. The net turnover during the day was Rs. 86185157.

Source : Equity Bulls

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