Any current/future new fundraising through debt or equity?

No major new debt or equity fundraising planned in the next 2-3 years. Existing term loans for animal health product division and SPF project have been fully paid off. Current borrowings (~INR 170 crores) primarily consist of working capital limits, which are expected to remain stable and not reduce significantly. Capital expenditures are minimal, mostly normal capitalization (~INR 40-50 crores) for existing poultry units, funded through internal accruals. New animal health care project (cost ~INR 67 crores) capitalization is already completed using internal accruals, no external borrowing. Ov

Any current/future capex/capital investment/strategic investment?

No major capex projects planned in the next 2-3 years; ample existing capacity across segments (poultry, feed mill, AHP, oilseed) to cater to demand. New animal health care plant project (~INR 67 crores) is near completion with production expected to start in the last quarter of FY24 (December 2023). This new plant will ensure regulatory compliance and add 15-18% additional volume in the animal health segment next financial year. Capitalization for the new AHP project is complete and funded through internal accruals; only regulatory clearance pending. Normal annual capitalization of INR 40-50

Future growth expectations in sales/revenue/volumes?

Venky's expects continuous growth of approximately 10% in revenues, particularly from QSR (Quick Service Restaurant) sector expansion in India. QSRs are growing steadily post-COVID, with an emphasis on chicken menu items, driving demand. Venky’s serves QSRs pan-India for frozen chicken products; chilled chicken supplies are regional. New animal health plant coming online by year-end will add 15-20% volume growth in that segment. Overall poultry segment volume expected to be strong with traditional consumption upticks in Q3 and Q4. Oilseed segment volume likely to maintain previous year’s level

Future growth expectations in earnings/operating earnings/profits/EPS?

Venky's expects continuous growth of approximately 10% annually from QSR (Quick Service Restaurants) sector sales, driven by expanding QSR business activities and menu items, particularly in chicken products. The poultry segment is anticipated to see strong volume growth going ahead, with profitability expected to improve in Q3 and Q4 due to traditional consumption patterns. Animal Health Products (AHP) segment will benefit from a new plant starting production by end of FY'24, expected to boost top-line revenue by around 15-20%. Margins in oilseed and edible oil segments may remain under press

Current/ Expected Orderbook/ Pending Orders?

The transcript does not explicitly mention specific details about the current or expected orderbook or pending orders for Venky's. However, the management indicated that they have sufficient volumes planned and packed production for the remaining part of the current and next quarter, implying a healthy order pipeline. For the poultry segment, volumes are expected to be strong going forward. In the QSR segment, Venky's is actively supplying frozen chicken pan-India, indicating ongoing and potential orders across regions. New product introductions in the fast food chain segment (Venky's Express

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Venkys (India) LtdQ3 FY24Food Products

Venkys (India) Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,451P/E: 16.4Market Cap: ₹2.3K CrSector: Food Products

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Venky's expects continuous growth of approximately 10% in revenues, particularly from QSR (Quick Service Restaurant) sector expansion in India.
→QSRs are growing steadily post-COVID, with an emphasis on chicken menu items, driving demand.
→Venky’s serves QSRs pan-India for frozen chicken products; chilled chicken supplies are regional.
→New animal health plant coming online by year-end will add 15-20% volume growth in that segment.
→Overall poultry segment volume expected to be strong with traditional consumption upticks in Q3 and Q4.
→Oilseed segment volume likely to maintain previous year’s levels but no significant growth due to edible oil price pressures.
→Feed capacity utilization currently moderate, indicating potential for increased production without large capex.
→Venky's plans to introduce new fast-food products in its outlets to drive expansion and growth.

Margin guidance

Category 3

→Venky's expects continuous growth of approximately 10% annually from QSR (Quick Service Restaurants) sector sales, driven by expanding QSR business activities and menu items, particularly in chicken products.
→The poultry segment is anticipated to see strong volume growth going ahead, with profitability expected to improve in Q3 and Q4 due to traditional consumption patterns.
→Animal Health Products (AHP) segment will benefit from a new plant starting production by end of FY'24, expected to boost top-line revenue by around 15-20%.
→Margins in oilseed and edible oil segments may remain under pressure till after elections (May), but the company aims to sustain volume at last year's level.
→Feed price stability and improved production efficiency (feed conversion ratio improved from 1.7 to 1.5) support margin improvement.
→Overall, growth in revenue, operating earnings, and profits is expected to be supported by increasing QSR demand, expanded capacity, and introduction of new products.

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Fundraise plans

→No major new debt or equity fundraising planned in the next 2-3 years.
→Existing term loans for animal health product division and SPF project have been fully paid off.
→Current borrowings (~INR 170 crores) primarily consist of working capital limits, which are expected to remain stable and not reduce significantly.
→Capital expenditures are minimal, mostly normal capitalization (~INR 40-50 crores) for existing poultry units, funded through internal accruals.
→New animal health care project (cost ~INR 67 crores) capitalization is already completed using internal accruals, no external borrowing.
→Overall, ample capacity utilization and no immediate plans for raising funds through debt or equity.

Order book

→The transcript does not explicitly mention specific details about the current or expected orderbook or pending orders for Venky's.
→However, the management indicated that they have sufficient volumes planned and packed production for the remaining part of the current and next quarter, implying a healthy order pipeline.
→For the poultry segment, volumes are expected to be strong going forward.
→In the QSR segment, Venky's is actively supplying frozen chicken pan-India, indicating ongoing and potential orders across regions.
→New product introductions in the fast food chain segment (Venky's Express and franchises) are expected soon, signaling anticipated growth in orders.
→The new animal health product plant coming online is expected to boost revenue by around 15%-18%, reflecting expected incremental orders.
→Overall, capacity utilization suggests ample capacity to cater to future demand without immediate constraints.

Capex plans

Yes

→No major capex projects planned in the next 2-3 years; ample existing capacity across segments (poultry, feed mill, AHP, oilseed) to cater to demand.
→New animal health care plant project (~INR 67 crores) is near completion with production expected to start in the last quarter of FY24 (December 2023).
→This new plant will ensure regulatory compliance and add 15-18% additional volume in the animal health segment next financial year.
→Capitalization for the new AHP project is complete and funded through internal accruals; only regulatory clearance pending.
→Normal annual capitalization of INR 40-50 crores expected for maintenance/upkeep of existing poultry units, funded internally.
→No significant external debt planned; current borrowings mainly working capital which will remain stable.

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