Mukka Proteins Limited is one of the key players of the Fish Protein industry in India. They are also amongst the first few Indian companies to have commercialised insect meal and insect oil (collectively “Insect Protein”) as an ingredient for aqua feed, animal feed, and pet food.
They manufacture and supply fish meal, fish oil and fish soluble paste which is an essential ingredient in the manufacturing of aqua feed (for fish and shrimp), poultry feed and pet food. Further, fish oil is also used in pharmaceutical products (additionally, Omega-3 pills and related products), soap manufacturing, leather tanneries & paint industries.
In FY 22, Mukka Proteins contributed almost 45-50% of the total revenue of the Indian fish meal and fish oil industry estimated at Rs1300 Cr to Rs1700 Cr. They sell their products domestically and also export them to over 10 countries.
Strengths And Risks
+ Leading Manufacturer and Exporter: Mukka Proteins has been consistently awarded by MPEDA, during the last 7 years, including as an outstanding performance in export of fish meal, fish oil and allied products for Fiscals 2021, 2020 and 2019. Their revenue from operations grew at a CAGR of 18.44% from Rs. 5,49.2 Cr in Fiscal 2020 to Rs. 770.5 Cr in Fiscal 2022.
+ Established Customer Base: They have long established relationships with our key customers who are the major producers of aqua feed, poultry feed and pet food, this offers significant competitive advantages such as revenue visibility, industry goodwill and quality assurance. They have ongoing business relationships of more than five years with 22% of their total customers who contribute 57.49% of the revenue.
+ Strategically Located Facilities : Mukka Proteins have their manufacturing facilities located close to the source of their raw material and also spread across various coastlines. This enables them to secure supply of raw material, maintain high product quality and optimize the transport cost.
+ Entry Barriers: There are high entry barriers in this industry such as availability of raw material. MPEDA, the regulatory authority has imposed a moratorium on registration of new fish meal and fish oil facilities and also enhancement of production due to coastal zone restrictions.
capacity of the existing fish meal and oil facilities for export purposes.
- Legal Proceedings: The company, some of their subsidiaries, promoters, directors, and group companies are parties to
certain legal proceedings. Any adverse decision in such proceedings may have a material adverse
effect on business and financial condition.
- Approvals and Licenses: The company requires specific approvals and licenses and is required to comply with certain rules and regulations to operate the business, any failure to obtain, retain and renew such approvals and licenses may adversely affect the business. The key raw material pelagic fish is a natural resource, which is subject to environmental changes, the regulatory requirements are evolving in many markets and are consequently subject to change.
- Customer & Supplier Concentration Risk: Top five customers contribute 60-80% revenue, similarly, the key raw material is sourced from limited number of suppliers making the business vulnerable to any change in relationship or market conditions.
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