AI-generated · cited to primary sources · not investment advice
SKM Egg Prod. (532143) Mar 2024 Filing Analysis
How durable is the business?
The company is deepening its backward integration by producing biogas from poultry litter to fuel boilers, reducing coal consumption and primary treatment chemical costs. (3 expanding)
“We started producing bio gas by using our own poultry farm litter. This in turn is used in our coal Boiler as an alternative fuel which has resulted in reduction of coal consumption.”
Revenue from egg exports (table eggs) grew exponentially, driven by high demand in international markets and a new contract with a Sri Lankan buyer. (2 expanding)
“Sale of Eggs - Export: 11,466.40 (2023-24) vs 2,431.80 (2022-23). Further, our table egg exports share shot up due to the demand in the market and we entered in to a contract with Sri Lanka buyer.”
See the full cited Business Model analysis of SKM Egg Prod.
What could break the thesis?
The risk is currently intensifying as high international prices caused by bird flu in Japan, Europe, and the USA led to a demand shock. Customers switched to alternate proteins, resulting in a drastic reduction in egg albumen consumption and high inventory levels at customer sites. (1 intensifying, 2 easing)
“Egg albumin price shot up exponentially during this year... caused by the bird flu in Japan, Europe, & USA... end customers started to replace the protein source from Egg albumen to alternate proteins... Hence, the consumption of Egg albumen powder has drastically reduced in the market resulting in huge inventory of Albumen powder at our customers’ end.”
See the full cited Risk analysis of SKM Egg Prod.
AI-generated informational research only. ThesisLoop is not investment advice, a stock recommendation, or a guarantee of returns.