A few more points ...
Am trying to understand a bit more on their pricing strategy. Are they dollar denominated? It's a commodity market, but do they have any hold? Like long term contracts, RM price pass over etc. Do they sell directly to the large clients or necessarily go through the distributors? There are n't much information either.
If they are getting forex revenue, how do they manage the forex? Do they hold in $? (guess not since they have to pay up, including high cost RM). Do they hedge? Again not much information available.
Seems the past few years results have been protected due to external reasons - US bird flu, forex fluctuations. Wondering how much have they really grown in $ denominated terms (and how much of their numbers saved by INR depreciation).
They are in global business. And thus their competition will always be global. Why is China not active in this segment? Can they? Chinese have proven that they can do well in commodity business with flimsy margins. Not withstanding the Chinese food fiascos in the past, if they come up big, can SKM withstand the onslaught? How? (BTW Chinese egg production is roughly 8-10 times that of India)
Japan seems to a big exporter of liquid egg and processed eggs. Then why are they importing? Is it because of Cost Advantage? (if so,why is SKM not targetting where Japanese export to?) or because the products of SKM Eggs' is at the lower end of the value chain?
What's SKM Eggs thrust to move up the value chain? AR talks about namesake R&D, with some statements on liquid egg repeated every year.
Often come across this statement, they managed well during downturn. So able management. Cant agree at face value - as forex fluctuations and US Bird flu were the saving grace.
Transparent Management - At best the details given are sketchy and to meet statutory requirements. No effort has been taken to give out addiitional infromation and cultivate investor awarenesss around the business.
A commodity business, with global competition, flimsy margin, high client countries concentration, very high raw material costs (over 75% of revenue), sensitive to forex fluctuations (so far been beneificiary - but need not be all the time), volatile industry (one bird flu equivalent & countries may ban), close to capacity operations, limited opportunity to scale with out capex, not much in-house technology development.
May be the market mispriced the windfall due to US bird flu and other events & when the euphoria died, the price came crashing.