Stock Data:
| Ticker | NSE: SKMEGGPROD |
| Exchange | NSE |
| Industry | FOOD PRODUCT |
Price Performance:
| Last 5 Days | -3.26 % |
| YTD | +227.43 % |
| Last 12 Months | +288..08 % |
Company Description:
SKM Egg Products Export Ltd, founded in 1995 and headquartered in Erode, Tamil Nadu, has emerged as a prominent manufacturer and exporter of egg-based products. Its product range encompasses a variety of egg-derived products, including whole egg powder, egg yolk powder, egg albumen powder, and tailored egg solutions. The company enjoys a diverse client base spanning multiple sectors, such as food processing, bakery, confectionery, nutrition, pharmaceuticals, and animal feed. Further enhancing its global footprint, SKM operates a subsidiary in the Netherlands, SKM Europe BV, and collaborates with ISE Foods Inc., Japan, a global egg industry leader, to manufacture and market liquid egg products in India.
Financial Performance:
In fiscal year 2023, SKM achieved a remarkable financial performance marked by several significant milestones. Notably, the company experienced an extraordinary 120% year-on-year increase in revenue in FY23. This impressive growth can be attributed to robust product demand, favorable pricing dynamics, effective operational efficiencies, and a keen focus on cost optimization. Furthermore, the company witnessed a remarkable 173% year-on-year surge in EBITDA in FY23, resulting in a notable EBITDA margin of 21.90%.
Profits also saw a substantial leap, with the company’s Profit After Tax showing a remarkable 226% year-on-year escalation in FY23, achieving a PAT margin of 13.14%. Beyond its profit-centric performance, SKM bolstered its financial position by significantly reducing total debt by 38%, resulting in a much-improved debt-equity ratio, which decreased from 0.94 to 0.46.
Additionally, the company’s net worth witnessed a commendable 4.64% year-on-year increase. This financial strength was further exemplified by the company’s impressive cash flow metrics, with operating cash flow growing by 116% year-on-year to reach Rs. 122.25 crore in FY23, while free cash flow demonstrated a remarkable 153% year-on-year increase, totaling Rs. 95.66 crore.
Industry Outlook:
Global Egg Products Market: The global egg products market is forecasted to maintain a healthy CAGR of 5% during the 2021-2026 period. The factors fueling this growth encompass rising consumer demand for protein-rich food products, increased awareness regarding the health benefits of eggs, a preference for convenient food solutions, and the expanded usage of egg products across diverse sectors, including food processing, bakery, confectionery, nutrition, pharmaceuticals, and animal feed.
Indian Egg Products Market: In parallel, the Indian egg products market is poised for substantial growth. Fueled by factors such as population expansion, increased disposable incomes, evolving consumer preferences, urbanization, and the burgeoning organized retail sector, this market is predicted to attain a valuation of USD 1 billion by 2026.
SKM’s diversified product portfolio, solid customer relationships, unwavering commitment to quality standards, innovation capabilities, and competitive pricing align the company well to harness growth opportunities in both domestic and international markets.
Conclusion:
SKM Egg Products Export Ltd, with its remarkable FY23 financial performance, has positioned itself as a strong contender in the global and Indian egg products markets. The substantial revenue growth, augmented profitability, and enhanced financial position make it an attractive investment opportunity. Nevertheless, potential investors should exercise prudence and consider the industry-specific risks associated with egg products.