Is it worth to buy Venky's india at Rs 137

Venky's India is a contrarian pick in the poultry industry. This company faced a very tough time in the last one year, this was primarily because of the bird flu that spread in the January-March quarter. As a result of that the operations of the company was severely affected.

The company reported a loss of about Rs 4 crore (Rs 40 million) in the January-March quarter. Inspite of that loss, the company has managed to make a profit of about Rs 11 crore (Rs 110 million) for the full year.

Now the fears of bird flu have started receding and the company seems to be getting back on track. This company is the largest player in the poultry industry and it is an integrated player in the sector.

This company is strong in the institutional segment and supplies its products to all major hotels and Indian and multinational food chains like McDonald, Pizza Hut and KFC.

When one talks of the poultry industry, Venky's is the only large player. There may be other players, but they are all small players. Venkys is probably the only national player in the sector. When one talks of the poultry industry, one  cannot even recall a number two.

So Venky's is a company where, given its size and scale of operations, it has the potential to attract institutional investors. Ofcourse they will get in after the marketcap has gone a couple of times from these levels, and after there is more visibility in terms of the company's earnings.

This company otherwise has been a consistent dividend payer and it has been paying regular dividends to its shareholders for many years now. Even when the company was faced with the worst of its times, it paid dividend to  shareholders.

Investors can use this sentiment in the company and accumulate this stock. It may turn out to be the McDowell of the poultry industry.