Dear ,

We had recommended SKM Eggs Products Export (India) Ltd at 400 in our Screener list.

Stock is currently trading at 257.

Investors are advised to average once.

Why we like the stock?

1. Strong Sales and Profit growth in last 3-5 years.
2. Strong Return on Equity
3. Low price to book.
4. Strong books with Capital work in progress and good cash in hand to cover Debts.
5. Strong cashflow.

We are seeing the stock in the range of 300-450 in short term and 1000-1250 in 2-3 years time.

About SKM Eggs Products Export (India) Ltd:

Incorporated in 1996, SKM Egg Products

Export (India) Ltd is an Export Oriented Undertaking engaged in the production

and sale of eggs and manufacture and sale of Egg Products

Key Points:

Business Overview:

Incorporated in 1996, SKM Egg Products

Export (India) Ltd is an Export Oriented Undertaking engaged in the production and sale of eggs and manufacture and sale of Egg Products

Business Overview:

SKM is an ISO 22000, ISO 17025, BRC, and HALAL certified integrated quality manufacturer and supplier of egg products mainly for the international market. Company formulates various kinds of egg based mixes for bakery, confectionery, noodles & pasta, meat & fish products, mayonnaise & salad dressing, and also in the health & pharmaceuticals sector

Products Portfolio:

a) Egg Powder:

Whole Egg Powder, Egg Yolk Powder, and Egg Albumen Powder.

b) Bakery Mix:

These are a specialized range of spray- dried egg blends either co-dried or dry-blended with sugar, salt, flour, or other ingredients.

c) Liquid Eggs:

Whole Egg Liquid, Egg Yolk Liquid, Egg Albumen Liquid, and Customized Egg Liquids.

Joint Undertaking:

SKM is a Joint Sector Undertaking with Tamil Nadu Industrial Development Corporation Limited. The promoters hold ~47.97% stake, TIDCO holds ~7.58% stake, and the rest is held by institutions and general public.

Production Capacity:

Company has one of the largest egg processing plant in Asia with a capacity to process 1.8 million eggs per day to produce 7500 MT of egg powder annually. It has its own and leased poultry farm to meet its entire egg requirements and also its own feed manufacturing unit to cater to its poultry farm. The entire operations of the company from egg -breaking process up to production and packing of the final egg powder is automated

Export Updates:

Company has established a very wide network in Russia, Japan, Europe, Indonesia, Thailand, Vietnam, Nigeria, Taiwan, Dubai, etc. Company exports around 60% of its egg yolk powder variants consistently for the past 7 years to Russia.

a) Company's new products of Chilled Egg Liquid & frozen egg liquid are available in Europe, Middle East and South East Asian countries

b) Company is continuously exporting egg liquid products in UAE and Middle East countries. Also 2 main customers in Oman and Dubai have already approved liquid products and started buying it @ 3 containers per month.

c) Further new customers in Thailand and Vietnam have approved company's Frozen Egg Yolk variant and buying it regularly for the past two years.

d) Company has submitted sample of liquid and powder products to Philippines, Vietnam and  Malaysia customers, and they have approved the same. Company expect to start liquid shipments to Malaysia and Philippines destinations in FY24.

e) Company has expanded its Whole Egg Powder market in Denmark, Peru, Sweden, etc.

f) Apart from this, company's egg yolk variants are approved by the Iran customers also, and shipments would start soon (if the regulation allow).

g) Further, In FY23, company restarted its shipments to South Korea also

h) Company exports Whole Egg Powder and Egg Yolk Powder in EU countries and Japan

i) For Egg Albumen Powder, company got new requirements/customers from Taiwan, Malaysia, Japan, etc.

j) Company entered new markets in Ghana, Uganda, Nigeria, Israel, etc., also working to identify more customers in Madagascar, Korea, Europe, etc

Capex:

In FY23, capital Expenditure incurred and funded is Rs. 2,825 lac of which Rs. 1,662 lac pertain to plant and machinery. Company had planned for debt funded capex towards setting up of Environmental controlled (EC) shed for birds and Bio -gas plant with total project cost of Rs.70 cr of which Rs.50 cr funded by debt and rest by accruals. The project is expected to be completed by Q1FY25.

Client Concentration:

SKML’s top 10 customers accounted for 49% of its total sales in FY23

Revenue Breakup - FY23:

Sale of Egg Powder & Egg Liquid ~86%,

Sale of Eggs & Poultry Feed ~13%,

Other Products ~1%

Geographical Revenue Split - FY23:

Exports ~80%, Domestic ~20%

Country wise Revenue - FY23:

Japan ~21%, Russia ~26%, Europe ~12%, Rest of World ~21%, India ~20%

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We have restructured our pricing to yearly Rs. 5000/-

We are maintaining strong CAGR of above 36% for Screener stocks, SIP10Kto16Cr portfolio and even our Short and Sweet stocks.

We are closing our Lifetime membership deal of Rs. 12,000/- one time fee in 2024. Lifetime members will remain Lifetime members.

If you are not our member yet and interested to gain access to yearly membership or lifetime membership, share your name and number in reply to this email.

Best regards,

Vinoth Kanna

Admin, Gale Wealth Guide