Hi, has anybody done a comparative study of Ovobel and SKM?
- The stock is trading very close to the bottom in terms of historical PE
- In last 5 years, instances of EPS decreasing but the stock did not fall in proportion due to PE correction
- In my opinion this gives a margin of safety from any EPS fall
- Now the question how much is potential upside
Disc: Studying, close to taking a position
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How come Venkys india leader in poultry is not able to perform but SKM performing very good.
Both work in same industries and both have same material cost
Looks like a competitor for SKM
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I have gone through the video; it was impressive their strategy.
However, do consider their target audience.
They are targeting the people who are ready to pay a premium for hygiene, packaging, and branding.
Their products are more towards the ready-to-eat segment.
I don’t think those are a competitor for SKM since their target audience is only at metros as of now at least.
Maybe if they start looking at Tier II and below cities and exports, then they turn to competitors, and I believe it may take a while.
But the main goal is that they want to target the unorganized more than the organized as per my understanding.
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Whats encouraging it - The market size is 90,000 Cr. (from the heading at least). SKM’s sales is only 701 Cr. for last year. The market size is big. And above that, SKM with lots of efforts have secured the approvals to export to certain countries.
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The only issue I have with this share is lack of clear understanding between private 100% entity owned by promoter down the value chain and its listed counterpart. Have they given clarity regarding what kind of contract is built between the two? I think all the brands for newly launched products are with private entity. Please correct me if I am wrong
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The one point that sticks out like a sore thumb in this article:
“Shivkumar plans to retire from business once the company reaches a turnover of Rs. 1000 crore, a goal he hopes to achieve within the next five to six years.”
Current fiscal year revenue stands at 700Cr. That’s basically 40-50% growth in 5 to 6 years? That’s not a good sign. The vision is just not big enough according to me.
That’s under 7.5% CAGR growth. Not a very ambitious target.
And this info is another concern.
Disc: Entered recently with 1% of pf.
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