Recommendation From Education And Packaged Food Sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

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ZEE LEARN

CMP - Rs45.40
BSE CODE 533287
Volume 217225
Face Value Rs1 

Zee Learn operates the fastest growing chain of K-12 schools and preschools under the name Mount Litera Zee School and Kidzee. The company operates 1741 and 108 pre-schools K-12 schools, respectively, as on Q1FY18 across Asia. Going forward, the company holds robust revenue visibility as it is expected to add nearly 300 pre-schools and 24-25 K-12 schools per annum. It has recently incorporated subsidiary Liberium Global and has penetrated into manpower training and recruitment with high ROI and zero capital expenditure. Further, nearly 10% of its revenue comes from construction and leasing of commercial properties. Financially, the company has posted an annual revenue and PAT growth of 18% and 141%, respectively, in FY17. Due to this, we recommend a Buy in the scrip for a target of Rs49.60 and with a stop loss of Rs42.50.

VENKY’S (INDIA) CMP - Rs 2382
BSE CODE 523261
Volume 15457
Face Value Rs 10

An integrated poultry firm, Venky's India is into the business of poultry and poultry products, animal health products and oilseeds. The company holds a restaurant chain providing variety of processed chicken products. Its major part of revenue came from de-oiled cake for poultry feed (70%), grown-up commercial boilers (19%) and day-old commercial chicks S.P.F eggs (14%) in FY17. Big institutions have been increasing their stakes in the company. The institutional stakes have increased to 27% in March 2017 from December 2016 as the demand for chicken is consistently growing at 15-18% annually. Considering the latest quarter, the company posted a revenue and PAT growth of 7.2% and 25%, respectively, while the annual data shows 16.4% and 226% revenue and PAT growth, respectively, in FY17. Decline in maize prices (nearly 70% of raw material cost of Venky’s) would help the company maintain its operating efficiency going forward. Considering the consistent demand from Venky’s lovers, we recommend Buy in the scrip for a target of Rs 2806 and with a stop loss of Rs 2278.