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SKM Egg Products Export (India) Limited — Q4 FY26 earnings call

Call held 22 May 2026

Management summary

SKM Egg Prod. reported a stellar Q4 FY26, achieving record sales of ₹767 crores and PAT of ₹102 crores, driven by strong operational performance and market demand. The company announced a significant ₹403 crore capex to expand layer bird capacity to 40 lakh by 2029, aiming for enhanced efficiency and cost savings. Additionally, the acquisition of SKM Universal for ₹27.75 crores will integrate windmill and branded egg divisions, supporting future growth and profitability.

Highlights

FY26 sales reached ₹767 crores, a 55.57% increase from ₹493 crores in FY25.
Operating profit for FY26 grew by 129.57% to ₹163 crores from ₹71 crores in FY25.
Profit After Tax (PAT) for FY26 surged by 209.09% to ₹102 crores, marking the first time crossing the ₹100 crore milestone.
The company's shareholders' funds stood at ₹395 crores, with a book value per share of ₹150.
Strategic capex of ₹403 crores initiated to expand layer bird capacity to 40 lakh by 2029, aiming for significant operational cost savings of 20 Paises per egg.

Concerns

The egg powder industry experiences erratic ups and downs, making long-term predictability challenging.
Forex hedging policy currently covers only 30% of exposure due to high volatility, lower than the usual 70%.
Management declined to share country-wise revenue contribution due to competitive reasons, limiting transparency on market-specific performance.

Key financials

3 periods

Headline

Shareholders' Funds
₹395 Cr
Book Value Per Share
₹150

Q4 FY26

Revenue
₹197 Cr
YoY +9.4%
PAT
₹32 Cr
YoY +414.5%

FY26

Revenue
₹767 Cr
YoY +55.6%
Operating Profit
₹163 Cr
YoY +129.6%
PAT
₹102 Cr
YoY +209.1%

What they filed

Q1 FY27: revenue up 4.5%, net profit up 50.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	127	135	117	176	202 +59%	204 +51%	187 +60%	184 +5%
Expenses	114	121	105	151	165	156	135	153
EBITDA	14	14	12	25	37 +164%	48 +243%	52 +333%	31 +24%
Margin	11%	10%	11%	14%	19%	23%	28%	17%
Other income	4	2	5	4	3	-1	-3	7
Interest	2	3	3	3	3	3	3	3
Depreciation	3	4	4	4	4	4	4	4
Profit before tax	12	10	10	22	33 +175%	40 +300%	42 +320%	32 +45%
Tax rate	29%	27%	35%	26%	25%	25%	23%	25%
Net profit	9	8	6	16	25 +178%	30 +275%	33 +450%	24 +50%
EPS	1.64	1.43	1.20	3.09	4.70	5.70	6.21	4.53

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence

Capex ₹403 Cr 101 crore from own funds, 302 crore bank term loan
- Expansion of easy sheds and new EC layer sheds to increase layer bird capacity
As of now the project cost is 400 crores and own funds from our existing savings 101 crore bank term loan 302 cr. Our bank term loan is a very cheapest interest borrowing cost because of your company is eligible for 3% interest subsidy from EBIDTA.
Debt Gross ₹302 Cr Cost 4.5%
- New borrowing Bank term loan for capex, eligible for 3% interest subsidy ₹302 Cr
As of now the project cost is 400 crores and own funds from our existing savings 101 crore bank term loan 302 cr.
M&A SKM Universal Acquisition · Closed · Consideration ₹[object Object] (cash)

Integrate windmill division for substantial savings and banking facilities, and branded egg division for focused growth and marketing push.
Windmill division will give substantial savings to the company. Branded egg division will allow focus on further growth in the branded segment.

I think the valuation number that is about 37 crores for the entire company. Since our company already holds 26%, the 74% is 27.75 crores is the out pay that will go. The main reason for this takeover of this company is one the windmill division will give substantial savings to the company. And the windmill division of this company has banking facilities which will become very big benefit for the company. And the second is the branded egg division which has been originally in the listed entity now and during the difficult period it was requested to be hired of credit entity, and it is not grown aggressively because of lack of financial strength to push for marketing. Now we are bringing back into the listed entity so that we can focus on further growth in the branded segment.

Guidance & targets

Revenue

Turnover Revenue · by 2030 · High confidence ₹1000 crores

This is in terms of numbers the thousand crore is not for the next financial year. It is the target of 2030 for which we are gearing up in terms of capacity expansion in powder as well as egg production.

— Mr. SKM Shree Shivkumar

Capacity

Layer Birds Capacity Capacity · by 2029 · High confidence 40 lakh birds

From 20 lakh birds today

This 48,4400-crore investment where currently we are at 20 lakh birds and by 2029 we will be at 40 lakh birds.

— Mr. K. S. Venkatachalapathy

Volume

Powder Volume Volume · within five years · Medium confidence 10,000 tons

From 7,000 tons today

We are looking to do 10,000 tons. The capex is analyzed be able to give a better picture by end of next quarter or after that. But definitely there is plan to invest to enhance our capacity to about 10,000 tons and when we will realize this is the next question. Maybe you can take five years’ time to achieve some 7,000 to 10,000 tons.

— Mr. K. S. Venkatachalapathy

Market Expansion

Japan Branch Establishment Market Expansion · by July end · High confidence Established

Japan is under the establishment hopefully within two to three months we will have our Japan branch by July end of something.

— Mr. K. S. Venkatachalapathy

Product Launch

Egg Pro Drink Launch Product Launch · this week from June · High confidence Launched

In fact, we will re. We have already reformulated our Egg Pro drink which will be put into market this week from June.

— Mr. SKM Shree Shivkumar

R&D

R&D Division Commencement R&D · within six months · High confidence Commenced

So the company is fully focused and we are building an R D division, product development and R D division exclusively for this purpose which will be commenced in six months' time.

— Mr. SKM Shree Shivkumar

What to watch in Q1 FY27

Japan Branch Establishment

by July end

Current Under establishment

Target Established

Why it matters

Successful establishment of the Japan branch is key for expanding market share and reducing dollar dependency in a key market.

Japan is under the establishment hopefully within two to three months we will have our Japan branch by July end of something.

Risks & concerns

Bird Flu Outbreaks
high

Bird flu is the biggest disruptor in the industry, causing supply shortages and price volatility globally, though India's situation is sporadic and under control with vaccination discussions ongoing.

Management acknowledged
Erratic Industry Cycles
medium

The egg powder industry experiences erratic ups and downs, making consistent performance challenging over five-year blocks.

Management acknowledged
Forex Volatility and Hedging Coverage
medium

Current forex hedging coverage is only 30% due to high volatility, lower than the usual 70%, indicating increased exposure to currency fluctuations.

Management acknowledged
Competition in International Markets
medium

Competition from European players, Ukraine, and China exists, requiring the company to maintain its competitive edge in quality and cost.

Analyst acknowledged

Q&A highlights

3 direct

Sales Volume, Realization, and Future Targets Partial

Without exact numbers, the production you are referring to, I think, is both liquid and powder. In terms of capacity, we are operating at very full capacity now. So, for 26 - 27 we don't foresee a very big increase in capacity. ... our average realization is about 722. This is on powder terms... This is in terms of numbers the thousand crore is not for the next financial year. It is the target of 2030 for which we are gearing up in terms of capacity expansion in powder as well as egg production.

Analyst sought specific volume and realization numbers for FY26 and future, and clarification on the ₹1000 crore revenue target, which management clarified is a 2030 target, not FY27.

Asked by Mr. Keshav Garg

Capex Details, Capacity, and Revenue Potential Partial

Capex of 400 crores is this is not a top line growth investment. It is a bottom line. So, we are procuring. If you have seen in this presentation now, we are procuring about daily about 4 to 5 lakh eggs at market price for the current need. With this Capex we will be able to do away with the additional procurement. ... this 48,4400-crore investment where currently we are at 20 lakh birds and by 2029 we will be at 40 lakh birds. Anything else? There is no I said revenue potential from the Capex is only adding to the bottom line.

Analyst questioned the 400cr capex, its impact on capacity, commissioning, and revenue. Management clarified it's primarily for bottom-line efficiency and capacity to 40 lakh birds by 2029, not immediate top-line growth.

Asked by Mr. Gunit Singh

Gross Margins, Egg Crisis, and Value-Added Products Direct

Price trend Bird flu so bird flu is the biggest disruptor in our industry. It the US was out of the international market because of continuous outbreak bird fluid outbreak and generally when bird flu outbreak happens then there is a culling of birds... Definitely the production of eggs comes down which results in higher shell like demand for the shell eggs goes up and the price goes up. ... we have already reformulated our Egg Pro drink which will be put into market this week from June.

Analyst inquired about margin benefits from capex and the impact of bird flu. Management provided detailed insights into bird flu's market disruption and the strategy for value-added products.

Asked by Mr. Lakshminarayana

Competitive Profitability and Contract Terms Direct

India's birth situation, I would not say it is nonexistent. It is there but it's very sporadic and it is not impacting hugely the supply side. ... we do usually do three months contracts, sometimes six months, very rarely. And about 70% of our business, 75% of our business is on contractual basis. About 20, 30% is on spot basis. ... We are currently at 30% coverage because of the high volatility we see now. So, we have not done the 70%. We have gone down. We have kept the open 70% and 30% covered. Usually, it's the other way around. 70% Is covered, 30% is open.

Analyst questioned the company's profitability in normal market conditions and details of contract pricing and forex hedging. Management explained the impact of bird flu, contract structures, and current forex hedging strategy.

Asked by Mr. Vaibhav Badjatiya

Return on Capital for Capex and FY27 Growth Drivers Partial

Just to give you there will be at least about 20 Paises saving per egg in terms of production costs without considering the interest and so on in the operation side itself Per egg versus open house conventional system versus the so that gives you the idea why such a capex high capex egg production is required. ... The growth 26, 27 as I said there is. There will be a small increase. Definitely there'll be an increase but not huge because we are fully utilizing our capacity now. So, our top line growth in terms of powder may not be very high but in terms of shellac exports and domestic market expansion it will be there.

Analyst sought specifics on ROC for the new capex and FY27 growth. Management highlighted cost savings from capex and indicated modest FY27 growth for powder due to full capacity, with other segments contributing.

Asked by Mr. Meherwan Kotwal

Impact of USD to Euro Conversion and Presentation Access Direct

The investor presentation will be uploaded on the website so you can all have a look at it. We do have business in Europe very little compared to the USD and for the knowledge we are directly invoicing from here to Russia in rupee and to Russian customers in ruble. We look to do the same for Japanese customers from the second half year. So, we will be going away from dollar dependency a lot.

Analyst asked about currency conversion impact and access to presentations. Management explained their strategy to reduce dollar dependency by invoicing in local currencies and confirmed presentation upload.

Asked by Mr. Anand Gupta

3 min read 6 chapters

Detailed narrative

Record Financial Performance in FY26

SKM Egg Prod. achieved an all-time high financial performance in FY26, with sales surging by 55.57% year-on-year to ₹767 crores from ₹493 crores in FY25. Operating profit increased by 129.57% to ₹163 crores, and Profit Before Tax (PBT) grew by 189.36% to ₹136 crores. Notably, Profit After Tax (PAT) crossed the ₹100 crore mark for the first time, reaching ₹102 crores, a 209.09% increase from ₹33 crores in FY25. The company's shareholders' funds stood at ₹395 crores, with a book value per share of ₹150.

Strategic Capacity Expansion (Capex)

The company initiated a significant capital expenditure of ₹403 crores for the second phase of its easy sheds project. This investment aims to expand layer bird capacity from 20 lakh to 40 lakh by 2029, with 20 lakh additional EC layer birds under construction. The project is funded by ₹101 crores from internal accruals and a ₹302 crore bank term loan, benefiting from a 3% interest subsidy. This expansion is expected to yield substantial operational cost savings, estimated at 20 Paises per egg.

SKM Universal Acquisition and Integration

SKM Egg Prod. is acquiring SKM Universal for a total valuation of ₹37 crores, with an out-pay of ₹27.75 crores for the remaining 74% stake, as the company already holds 26%. This strategic acquisition aims to integrate SKM Universal's windmill division, which is expected to generate substantial savings and leverage its banking facilities. Additionally, it brings the branded egg division back into the listed entity, enabling a focused marketing push and growth in this segment, which was previously constrained by financial strength.

Market Dynamics and Competitive Edge

The company highlighted its strong competitive position in international markets, including Japan, Europe, Russia, Nigeria, and South Africa, achieving at least 5% higher realization than competitors due to superior quality and timely delivery. Management noted that global bird flu outbreaks have been a major market disruptor, causing supply shortages and price volatility, which India has capitalized on as an alternative supply source. The company is also exploring vaccination policies to stabilize supply chains and reduce market turbulence.

Value-Added Products and R&D Focus

SKM Egg Prod. is re-focusing on value-added products, with a reformulated Egg Pro drink set to launch in June. The company is also building a dedicated R&D division for product development, expected to commence operations within six months. While past efforts in this segment faced challenges, the company aims to leverage its financial strength and the executive director's leadership to make significant inroads, initially focusing on the Indian domestic market due to shelf-life and supply chain complexities for exports.

Operational Milestones and Future Outlook

The company detailed its operational milestones from 1995 to 2026, including significant increases in egg breaking capacity from 10 lakh to 30 lakh eggs per day by 2005, and the transition to environmental-controlled poultry farms from 2024, leading to substantial operational cost savings. Looking ahead, the company targets a turnover of ₹1000 crores by 2030 and aims to achieve 10,000 tons in powder volume within five years, while also expanding shellac exports and domestic market presence.

This is an AI-generated summary of a publicly available earnings call transcript.

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