Venky's India, the flagship company of Rs 1300-crore VH Group, is facing the heat of highly dramatised reports on bird flu in most of the media in the country. The company's scrip nosedived to Rs 124 on February 20 from Rs 155 in the previous trading session on BSE. However, it recovered later to close at Rs 144. Currently the scrip is hovering around Rs 135.

At the beginning of 2006, the scrip was moving around Rs 195 and started drifting southward on account of bird flu. Venky's India belongs to the largest fully integrated poultry group in Asia and offers under one roof, total support for poultry development. The reports of bird flu in states like Maharashtra, Karnataka and Gujarat have already hit domestic sales of chicken and poultry products and also affected its exports exports.

The Central Government is taking emergency measures to contain the virus. The bird flu panic has already started affecting the whole poultry business. This may affect the working of Venky's India business operations in the near future. ]

The company's net sales for the nine months ended December 2005 touched Rs 255.80 crore and it earned a net profit of Rs 9.89 crore. However, the last quarter will be a difficult one and the company is likely to suffer heavily.

For the full year ended March 2005 its net sales amounted to Rs 343 crore with a net profit of Rs 16.67 crore. Its poultry and poultry products sales improved to Rs 157.20 crore from Rs 133 crore and the sales from poultry feed reached Rs 80.94 crore from Rs 71.56 crore. The Venky's scrip reached at its peak level at Rs 227 on August 17, 2005. There is all likelihood for the scrip to do down further in the next few trading sessions because of the ongoing media reports on bird flu.

The company is taking every step to overcome the problem with the help of its Poultry Diagnostic and Research Centre in Pune. The laboratory has complete setup for various activities such as disease diagnosis, bacterial and viral isolations, serological monitoring, hatchery hygiene monitoring, etc. This laboratory is equipped with competent technical personnel who are experts in various technical fields.

The financial analyst pointed out that the poultry business is in the disorganised sector in India. Venky's international business could be hit adversely because of bird flu in the last quarter of fiscal 2005-06 and that will reflect on its earnings. More than 50 per cent of company's revenues come from poultry segment.