SKM Egg Products – thinking out of the shell

What I meant was repeating the performance of last quarter for next 3 more quarters, Forward PE becomes 12.
Present market cap → ~600 Cr
Net profit → 12 X 4 = 48 Cr, Fwd PE will be ~12

Also, looking at performance for upcoming quarters would be important when making a definite call on this.
The net profit of this company was 16 and 7 Cr in FY21 and FY22 respectively. The sudden increase to 76 Cr in FY23 and 105 Cr in TTM brought much positivity to the stock. From Dec 22 to Sep 23, the company delivered a 30 Cr net profit run rate. However, this profit run rate came down to 12 Cr in last quarter, which is exactly same to net profit in Sep 2022 (Before start of 30 Cr run rate)

So the question arises – What is the steady state net profit of this company? Is it 12 Cr a quarter or 30 Cr a quarter, or is it even less? Difficult to answer this without any good commentary from the company itself.

However, one should make their own decision. I am just laying my hypothesis.

In general, cyclicals work opposite to normal stocks. When PE is high at a steady level, that is the time to buy. Because when profits shrink (Cycle ends), PE looks exorbitant. When PE becomes low, it is time to sell in cyclical because your profit becomes very high and the stock price hasn’t caught up with that.