SKM Q3 results out (Figures Q3FY17-18 Vs Q3FY16-17)
Revenue 76.76 Cr Vs 59.56 Cr
Net profit 1.85 Cr Vs (-0.14Cr)
Somehow the company is lying low and posting profits. Meaningful growth/profits yet to be visible.
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Itâs on the path. Positive results in terms of both revenue and profits.
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SKM products seem to be available in around six cities of Tamil Nadu and Karnataka, most prominently Coimbatore and Bengaluru. Further, it is heartening to see the availability in supermarkets like Big Bazaar, Reliance Fresh, Nilgiriâs, GrandMart, Pothyâs etc.(source : Store locator link on the new website)
If the product does well and is accepted by the consumers, a BIG consumer brand is in the making. Sales should start getting reflected in the numbers in the next couple of quarters.
A brand new website https://skmbesteggs.com/ captures the domestic business beautifully. It showcases the new products - egg cubes and liquid eggs along with best eggs. This makes it confusing again, since in my understanding SKM Universal Marketing was involved with procuring and marketing of eggs. We need to quickly get update from management, how products revenue/profits are distributed between SKM Egg Products and SKM Universal Marketing Ltd.
On one hand, the new website has SKM Egg Products mentioned everywhere in business and contacts. However, when you try to bookmark the site, it saves as âSKMBestEggs - Fresh & Safe Eggs. Universal Marketing Company Pvt Ltdâ
Nevertheless, let us hope that things get clear sooner than later and investors are able to make calculated bets accordingly.
Disc: Invested.
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Yesterday I visited Erode and tried to inquiry about the SKM liquid eggs & cubes in the big provision stores.
Me: Do you have SKM egg products like cubes, liquid ?
Shop owner: We donât have these products as customers donât ask it, please check it out in Jai Surya supermarket.
Me:After 30 mins, I visited the super market which is inside Erode main bus stand heartened to see that SKM egg cubes are available.
Note: SKM installed their own 100 liters refrigerator, as egg cubes need to be stored under 4 degree Celsius and within 3 hrs we need to store it refrigerate else it would be spoiled
Me: How many egg cube packets are sold ?
Customer Representative: 5 to 6 everyday
Me: how many months before this is cubes been launched in this store ?
CR: 6 months back
Me: Can I take this cube to Chennai, will it be good after 7 hours ?
CR: It would be good for 3 hrs, after that you need it to store it else it would be spoiled, Egg white liquid & Cubes will be available after a month in Chennai
Me: Dont you have egg liquids in Erode,
CR: Egg liquids are launched only in Bangalore super Markets a month back and it will be available once its launched in Chennai
Me: How good are the sales in Bangalore ? How often you ship these products to Bangalore ?
CR: These products are launch a month back only in Bangalore, and we cannot predict the demand so earlier.
Note: CR is a person installed by SKM company in all the stores in Erode.
Disc: Invested
Enclosed some pics taken from the store.
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Who are the buyers for egg cube and liquid egg in India? How does it fit with our cuisine? 3 hours life without refrigeration sounds like a still birth to me in India. Why would I buy these over fresh eggs from the local grocer? These are the questions off the top of my head when trying to evaluate domestic demand for this product.
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These products specially egg paneer may have a good demand in North india⌠As many north indians are non-vegetarians but eat eggs⌠For them these products may serve as a good cooking optionâŚ
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As skm listed entity is 100%,eou so cannot do domestic business under listed so they may be doing under skm universal, I could be wrong in my thinking
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As many fellow value pickrs have pointed out time and again, it is extremely important to know if the egg white cubes etc are from listed entity or unlisted one. If unlisted, do we know what is ownership % of the listed entity in that unlisted entity?
As a minority shareholders, we should remain focused on what âourâ company gets out of any news/new product launch/acquisition/expansion. Many promoters have plethora of related party unlisted companies which skim away all the profits leaving loans/expenses on the books on listed entity.
Disclosure - not invested. Was interested some time back but changed my mind after seeing related party transaction issues
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when people buy milk also need to be refrigerated in less than 3 hrs else it will be spoiled that doesnât mean packet milk consumption is null
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Milk wouldnât need convincing for shelf space in the constrained refrigeration sections. I donât know if small supermarkets would be willing to take the risk with a new product. That might explain the separate branded refrigerated units seen in the pics above. The company will have to invest in things like that to make this click. Doing that for a new product that doesnât have a proven market somehow doesnât sound very appealing to me.
If you are selling paneer or cheese and are a new player in the market, then its a different deal - I have seen Parag Milk Foods products like Go Cheese and Govardhan Go Paneer etc. along with Brittannia and Amul products. I donât know if the Indian people would accept seeing an egg product along with the dairy products like these although economically it makes sense to use the same space. These things sound too complicated for me to make it click.
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There is no parallel product (Egg Cube ) like this one sold anywhere in the world. Itâs not clear whether the market response is encouraging but the share price has already zoomed assuming it to be a big hit.
Gentlemen who have been posting the product pictures are not checking manufacturer and marketing entity details and borders are just guessing.
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in my area, even small shops will keep a fridge to store milma milk other diary products⌠i am a customer and like egg and egg recipes so if i see such products in the shop i will buy and try. if i feel good and convenient i will buy again this is how consumer behave⌠they are providing refrigerator also i believe
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Well the most important question at this time for us is to know whether these products are being sold by skm egg products or skm universal⌠Regards
Would expect the listed company to give some kind of announcement in BSE for new product launch if it is from the listed entity . This company fares very poorly when it comes to being investor friendly.
The unlisted company is only used as a RM(read egg) supplier to the listed company , that makes a good case for this product to be coming out of the listed entity .
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Just the fact that so much speculation exists over who owns what should be a red flag IMHO. No smoke without fire may not be a valid logic if you are to judge a civil settlement but when it comes to onesâ own money, smoke signals must be heeded to. To me it looks like SKM Universal marketing owns the meat while the listed entity is entrusted with the bones.
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Thanks Pradeep. That should settle the question on who owns the products. Now that the announcement to the exchanges has been done by the listed entity and so too the presentation, it is clear that the listed entity owns these consumption products (egg paneer, egg tetrapacks, egg sprinklers, egg pops)
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I think it is premature to assume that listed entity owns the brands just because they make announcement. Nobody stops them to make announcement if they are just marketing it but if the manufacturing(and hence the margin) is owned by related party.
I may be wrong here but would like to see more proof of ownership , something like printed label on the product.
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