KRBL LTD.

Headwinds hit its Basmati pole place but don’t dent its growth plan

With its registered office in New Delhi and its corporate office in Noida (UP), KRBL, formerly known as Khushi Ram Beharilal Ltd, is today the world’s leading Basmati rice producer and rice miller. Founded by two brothers – Khushi Ram and Beharilal — the company was initially engaged in cotton spinning and trading wheat. Later, the company focused on rice, and during the last 13 years fully integrated operations in every aspect of the Basmati value chain. From seed development, process, contract farming, paddy procurement and safe storage to processing the rice products for packaging, branding and marketing, it is an integrated process. The company produces what is considered the best-quality Basmati rice, white rice, sella rice, brown rice, pusa Basmati rice and other varieties. Basmati rice is its flagship brand and is exported to several countries.

The company has two manufacturing facilities located across Uttar Pradesh (Gautam Buddha Nagar) and Punjab (Dhuri). It has four state-of-the-art grading, sorting and packaging facilities at Sonepat, Gautam Buddha Nagar, Dhuri and Alipur. It is a leader in the rice segment and offers rice under a range of brands, including India Gate, Nurjehan, Telephone, Lotus, Lion, Southern Girl, Taj Mahal and Indian Farm.

KRBL has performed very well on the financial front. During the last 12 years, its sales turnover has expanded from Rs 2,882 crore in fiscal 2014 to Rs 5,594 crore in fiscal 2025, with operating profit surging from Rs 441 crore to Rs 674 crore and the profit at net level rising from Rs 255 crore to Rs 476 crore.

WRONG NOTE

On a jarring note, independent director Anil Kumar Chaudhari resigned recently from the board, expressing concern over lack of corporate governance, lack of independent oversight, marked lapses in the functioning of the board, and the absence of transparency.

The resignation, coming on the heels of the arrest of the company's joint managing director in the Agusta Westland case by the Enforcement Development in 2021, adversely affected the prestige of the company and eroded investor confidence. At the same time, KRBL has aggressively expanded into markets like edible oils, spices and atta. But building a new supply chain is resource-intensive and distracting instead of consolidating its dominance in rice.

KRBL appeared to be spreading itself too thin. Seeing this as an opportunity to replace KRBL from the leadership position in Basmati rice, LT Foods, a Gurugram-based FMCG company, made a big push to become the number one Basmati rice producer. In 2020, KRBL was ruling the roost with a sales turnover of Rs 4,499 crore, and a fast-growing LT Foods had reached Rs 4,135 crore - Rs 364 crore behind KRBL. But by 2025, while KRBL revenues reached Rs 5,594 crore, the revenues of LT Foods shot up to Rs 8,681 crore. LT Foods has planned revenues of Rs 10,000 crore by 2027 while KRBL revenue may not reach Rs 7,000 crore by then.

SHARE SLUMP

These headwinds adversely affected investor interest in KRBL, leading to a drop in the stock price from its all-time high of Rs 495 in August 2025 to Rs 225. But the company has started taking corrective action and its share price has recovered to Rs 349.25 by October 1, 2025. With KRBL's continued efforts to revive the pace of growth, the share price is expected to move up again. Consider:

• Though KRBL may not be able to dethrone LT Foods from the numero uno position in the foreseeable future, it domestic market, as it enjoys a 35 per cent marketshare at present. The company's fully integrated nature will help it to maintain a respectable second position in the rice segment after LT Foods.
• Besides maintaining a good position in the domestic market, KRBL has spread its footprint throughout the globe, emerging as the largest exporter of branded Basmati rice from India. In fact, its premium brand, 'India Gate' Basmati rice, continues to be recognised as the world's No. 1 Basmati brand. The company's branded rice is doing very well in over 90 countries. Today, it commands an approximately 40 per cent marketshare in five of the 150 countries importing Indian Basmati rice.
• To further enhance consumer experience, the company launched 'Biryani Masala' in FY24, allowing consumers to enjoy the perfect taste of biryani from KRBL's Basmati rice and masala. It plans to introduce a range of healthy edible oils in the upcoming year, broadening its product portfolio.
• The Middle East, representing 74% of India's Basmati rice exports, remains a pivotal market. KRBL derives approximately 58% of its Basmati export revenue from this region, with notable growth in Kuwait, Bahrain and Oman. The company is appointing a distributor in Saudi Arabia to penetrate that market.

TESCO TIE-UP

• As the world's largest Basmati rice miller and exporter, KRBL recently expanded into the UK market by introducing its India Gate Basmati rice to Tesco stores. The partnership with Tesco, which is the most well-known supermarket chain in the UK with around 3,000 stores in that country, is expected to help KRBL increase sales in the European region and establish itself as a household name in the global market. KRBL plans to continue expanding in Europe and North America through collaborations and new products, with the goal of becoming a global leader in the Basmati rice market.
• With a view to meeting the rising demand at home as well as abroad for its rice, the company has planned an ambitious expansion. Today, it has two plants, one each in UP and Punjab. It now plans three new plants, one each in Gujarat, Karnataka and Madhya Pradesh. The company plans to spend Rs 250 crore to finance these plants within the next two years.
• KRBL has already started its recovery. The sales turnover, which had started declining from Rs 4,492 crore in 2020 in Rs 3,992 crore in 2021 and to Rs 4,211 crore in 2022, has recovered modestly to Rs 5,385 in 2023 and Rs 5,594 crore in 2025. In 2027, revenues are expected to reach Rs 7,000 crore. The share price is also expected to improve from the current levels.

PERFORMANCE INDICATORS (Rs. in crore)

GRAUER & WEIL (INDIA)

Plethora of anti-corrosion solutions

Mumbai-headquartered Grauer & Weil (India) is a six decade-old small cap company and a trailblazer in surface finishing. Popularly known as ‘Growel’, the company is the only entity in India and one of the few in the world that offers complete corrosion protection solutions on all types of substances across various industry segments. Its major earners are three surface finishing products, which account for the lion’s share of 83% of revenues. The balance is contributed by engineering (13%) and shopping mall (4%). Broadly speaking, the manufacturing activity has five divisions – chemicals, engineering, paints, lubricants and realty. Grauer & Weil’s solutions address surface finishing and protection needs of various sectors, including automobiles, aerospace, defence, fasteners, hardware, electronics, electrical, white goods, jewellery, PSUs and railways.

FISCAL SMILES

The company has been performing extremely well on the financial front. During the last 12 years, its sales turnover has almost trebled from Rs 380 crore in fiscal 2014 to Rs 9,134 crore in fiscal 2025, with operating profit rising from Rs 61 crore to Rs 189 crore and the profit at net level shooting up more than five times from Rs 30 crore to Rs 157 crore. What is more, the company’s future prospects are all the more promising. Consider:

• All its divisions are above-average and turn out highquality products. The chemicals division offers a plethora of solutions under one roof, including electroplating, speciality chemicals, zinc flake coatings, and phosphating and anodizing processes to address surface finishing and protection needs across a range of industries. Its paints division offers a spectrum of high-performance customised coating solutions for industrial solutions. Its six strategically located manufacturing plants across India are equipped to produce an extensive array of surface coatings.
• The company delivers comprehensive solutions for manufacturing and supplying fully automated surface treatment plants and water as well as wastewater treatment equipment. The engineering division in Pune is primarily engaged in conceptualising and installing different types of equipment for meeting the surface finishing requirements of various industries.
• The electroplating chemicals division has a wide basket of products and the chemicals manufactured by the company find applications in various industries like automobiles, home fittings, consumer durables, and gems & jewellery. Growel benefits from a well-diversified product portfolio in its chemical segment.

MULTI REVENUES

• The engineering division is involved in manufacturing and providing turnkey solutions for electroplating plants, effluent treatment plants and other engineering products.
• The diversified revenue has helped the company reduce its dependency on, as well as tide over any downturn in, any particular business segment.
• Growel is strong in R&D and is working towards cutting-edge technologies in the areas of surface coatings, electrical paints and metal working fluids, which will allow it to maintain its leadership in the years to come. It is also constructing a new R&D centre in Vasai near Mumbai, which is expected to be operational in fiscal 2026.

CLEAN SHEET

• The company’s financial position is very strong, with reserves at the end of March 2025 standing at Rs 894 crore – around 20 times its equity capital of Rs 45 crore, that too after issuing 1:1 bonus shares.
• The share price, which was ruling over Rs 100 per piece (face value Re 1), has declined to Rs 86 during the recent bear phase in the market generated due to political uncertainties in the country and growing geopolitical tensions globally. Investors with a long-term perspective can certainly invest in these stocks at the current price levels.

PERFORMANCE INDICATORS (Rs. in crore)