The company operates in 3 segments and all the three segments are very cyclical. The animal feed segment do swing from negative margins to as high as 8 %. The major raw material for the Animal feed segment seems to Rice bran, maize, sorghum, soya meal etc. Most of these grains are seeing softening in their prices. Maize prices seems to be pretty hard to predict. Q3 margins for the sector should be better with Khariff crop harvest. Expansion into Tamil Nadu and growth in poultry feed may aid the company further.
Oil cake sector seems to be even more cyclical with margins going into negative quite often. But, company needs to run this segment as oil cake is needed for the animal feed segment. They have to process around 1,25,000 tons of copra cake, to meet requirements for deoiled copra cake, which is one of the major ingredients in feed The company seems to be depending on import of copra for most of its needs. A major factor affecting the margins of this segment is coconunt oil prices. In March, 2021 the coconut oil price was around Rs. 1.90 lakhs per ton which came down to the level of Rs. 1.15 lakhs per ton in
March, 2023 and the company has witnessed lowest selling price of Rs.1.03 lakhs. Coconut oil prices seems to have rebounded recently which should aid company’s margins in this segment. Copra prices may also have increased.
The company has never been able to increase the sales in this segment for a very long time. Its good to see that they are focusing on ice creams now. Kerala is one of the fastest-growing carry-home-pack market of ice creams.

It would be interesting to see how they scale up this segment. This segment could be one where cyclical swings may be much lower. The losses in this segment has been continuously trending downwards. It would be wonderful if they can use the cash flows from animal segment to build the ice cream business.