The Annual report for 22-23 reports a drop in demand for Collagen peptide due to recessionary conditions in the US. Collagen, in any case constitutes only about 10% of Sales for the Co. This has been more than made by the increasing demand for Gelatin largely from the Pharma industry, which has resulted in continued high Gelatin prices.
The price trend for high gelatin prices has continued in the current year as well as is evident from the graph, which has been updated up to May 2023.
Gelatin plants consume high energy/ power costs which has made it unviable for gelatin manufacturing plants in Europe, many of which have shut shop. Besides, it is a highly polluting industry & as is typical of the developed world, such industries are gradually outsourced to the developing countries. High gelatin prices seem to have come to stay & appear to be a new normal.
At current levels of about 715 crs of market cap, the valuations do appear to be quite attractive.
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