Stock Tip: SKM EGG PRODUCTS: A great consumer product – the next Jubilant !!
vetri...@gmail.com
SKM Egg Products Export Ltd( listed at NSE only )
Price : Rs 153 Date: 30th Jan 2015
Target: Rs 350 Time Frame: 3 years
SKM Egg products exports is in the business of processing eggs, convert them into powder and liquid and exports them to developed countries. The end user industries are Global bakery companies and companies making all bakery products. The company’s products are well accepted and have got food quality approvals from the European union and other markets. The company procures and processes 1.8 Million eggs per day, yes per day. This is a massive scale and is a big moat. All the people who travel abroad know how the western world cannot live without bakery products. They consume it in all the meals. So, the demand is going to be robust and is recession proof. See the company’s fundamental below.
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Return on Equity ( TTM till Dec 14 ) : 46.5% |
RoCE ( TTM till Dec 14 ) : 55%
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Sales ( CAGR last 3 years ): 29 % |
Net Profit Growth ( CAGR last 3 years ): L to P
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Net Working Capital Cycle (13 – 14 ) : 37 days |
Operating cash flow ( last 3 years ): 45 Cr
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EPS CAGR Growth ( last 3 years ): L to P %
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Current P/E ( TTM ): 19 |
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MCap to Sales ( TTM ): 1.47 Times |
MCap to Operating Profit ( TTM ): 9.4 Times |
The company had a RoE and RoCE of less than 20% till Sep 14 quarter but moved to more than 45% due to the excellent Dec 14 quarter result. The company TTM PE is 19, does not look cheap. But the MCap to Sales TTM ratio is just 1.47 times and the MCap to Operating profit in just 9.4 times which are very cheap. The EV to ebitda will still be more attractive.
BUY IT BEFORE OTHERS AS IT IS GOING TO MOVE UP LIKE JUBILANT.
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Disclaimer: I will have an interest in the stock
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