I have written down a summary of the outcome of the AGM and a conversation with Mr. Shree Shivakumar.
Highlights from Speech of Shiva Kumar:
Year end 2016 results were discussed . The reason that the company has made a lesser profit than PY 2015 was mainly due to the Egg prices volatility the previous year there happened to be a Flu in the U.S. Which affected the 30Cr hens and prices shot up which turned into profits as situation stabilised CY the company has lower realisation.
Capex : The company is not making any Capex as said because making capex when market are high and suddenly lower market demand could affect us . This situation would continue till 2017 and thus are postponing their capex plans .
SKM has approved global suppliers like Heinz , Monedlez , Csm etc which helps its products reach globally
Currently due to over production in Europe based on US markets prices remain weak .
Focus & Key drivers : The company is focussing on Russian markets and trying to gain market share of 50 % in coming 2 years which would be main driver of 500 cr revenues as mentioned previously . Every week 2 containers were shipped in 2016 , currently it's having a order to ship 700 Mt in 6 months .
Debt : There is no term loan and only working capital loans remain . Cost of Working capital loans are very cheap at 2.5 % ( as mentioned by the CEO) the pledged shares of 22 % from the Bank has been taken back .
70 % of feed inputs are Corn and soya thus those prices influence the Raw materials to a great extent . And imports of those are regulated due to government intervention as to protect local Agri players .
Market share : SKM exports 60 % of Egg powder from India , 10 % of imports from Japan are from SKM . Started supply to Russia .
Going forward : The market situation remains dull due to Over supply and lesser demand . This cycle tends to remain for another 2 years . And thus net profit target of 500 Cr is further pushed to 2021-2022 from as said 2018. Cyclicality in prices to remain and thus the company expects another 2 years to be muted performance .
After AGM the company is planning to list the stock in BSE .
Disc : Invested . Opinions may be biased