KRBL LTD

Loses Basmati crown, but still pole player

With its registered office in New Delhi and its corporate office in Noida (UP), KRBL Ltd – formerly known as Khushi Ram Behari Ltd – is today the world’s leading Basmati rice producer and rice miller. Its flagship brand, ‘India Gate’, is the world’s numero uno Basmati brand by a long chalk.

Founded in 1895 by brothers Khushi Ram and Beharilal, the company has gone through a massive rollercoaster ride. Starting with cotton spinning and wheat trading, the company switched to rice and subsequently integrated its operations in every aspect of the Basmati rice value chain – from seed development, process, contract farming, paddy procurement and safe storage to processing the rice products for packaging, branding and marketing. The company produces what is considered the best-quality Basmati rice – white rice, sella rice, brown rice and pusa Basmati rice, among other varieties.

KRBL has two manufacturing facilities at Gautam Buddha Nagar in Uttar Pradesh and at Dhuri in Punjab. It has four state-of-the-art grading, sorting and packaging units at Sonepat, Gautam Buddha Nagar, Dhuri and Alibar. It is an undisputed 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.

The company is going from strength to strength, with India Gate emerging as the number one Basmati brand globally. In fiscal 2020, the company recorded revenues of Rs 4,500 crore and operating profit of Rs 870 crore.

BAD TIMES

But there was a downward turn in 2021. On a jarring note, independent director AK Chowdhary resigned, blaming the management for lack of corporate governance, lack of independent oversight, marked lapses in the functioning of the board, and the absence of transparency. This episode sent shock waves in the corporate world, stock market circles and the investing public. What is more, the company’s Joint MD was arrested by the Enforcement Directorate in the Augusta Westland case. Both these incidents adversely affected the company’s reputation and eroded investor confidence in the management.

Surprisingly, even in these circumstances, the company resorted to aggressive diversification in markets like edible oils, spices and atta. But building a new supply chain is time-consuming and resource-intensive, and diverts focus from its dominance in rice. KRBL appeared to be stretching itself thin.

Seeing a golden opportunity to dethrone KRBL from the numero uno position, the fast-growing LT Foods, a Gurugram-based FMCG company, made a big push to emerge as the number one Basmati company in the country.

In 2020, KRBL was ruling the roost with an annual sales turnover of Rs 4,499 crore, vis-à-vis LT Foods’ Rs 4,185 crore. But by 2025, while KRBL revenue reached Rs 5,594 crore, LT Foods shot up to Rs 8,681 crore through aggressive marketing strategies. LT Foods has now targeted the Rs 10,000-crore mark by 2027, while KRBL’s revenue may not reach even Rs 7,000 crore if current trends are any indication. Thus, for the time being, KRBL has lost its Basmati crown to LT Foods.

All these headwinds adversely affected investor interest in KRBL and the share price slid from its all-time high of Rs 495 in August 2025 to Rs 275 recently.

REMEDIAL STEPS

A shaken KRBL management started taking corrective steps to recover lost ground. Its efforts succeeded in stopping the further fall of the scrip, and by October 1, 2025, the stock moved up to Rs 349.25 and is now at Rs 385.

Thanks to the management’s determined efforts, the company is back on the growth path, and its overall performance remains strong. During the last 12 years, its sales turnover was moving in a narrow groove. By fiscal 2023, the figure crossed Rs 5,000 crore and went up to Rs 6,098 crore in fiscal 2026, with operating profit shooting up from Rs 526 crore in 2015 to Rs 902 crore in fiscal 2026, and the profit at net level doubling from Rs 322 crore to Rs 648 crore. Thus, though the company has lost its numero uno position, it has succeeded in maintaining its pace of growth. Consider:

• Though KRBL has lost its numero uno status to LT Foods, its India Gate brand maintains its position as the number one Basmati brand globally. The company continues to do quite well in the domestic rice market with a 35 per cent marketshare.
• Despite the headwinds which adversely affected KRBL’s position at home, the company has successfully maintained its global stature and has spread its footprint in as many as 90 countries, emerging as the largest exporter of branded Basmati rice from India.

MAJOR MARKET

• The Middle East region, which accounts for around 74 per cent of India’s Basmati rice exports, remains a pivotal market for India, contributing around 58 per cent of KRBL’s Basmati rice export revenue. Oman, Kuwait and Bahrain are major buyers of KRBL’s Basmati rice.
• KRBL has now entered the British market. The company has joined hands with the UK’s Tesco supermarket chain to sell India Gate Basmati rice. This will not only help KRBL market its Basmati rice in Europe but will also help establish it as a household name in Europe and North America.
• With rising demand for its rice at home as well as abroad, the company has embarked on a Rs 250-crore expansion plan. Apart from two plants, one in Uttar Pradesh and another in Punjab, it has planned to set up three plants in Gujarat, Karnataka and Madhya Pradesh.
• Having established its position in the rice market, the company is exploring possibilities to diversify its product range. It has already entered the edible oils, spices and atta (flour) markets. With a view to further enhancing consumer experience and giving a push to its Basmati rice, it has launched Biryani Masala. It also has plans to introduce a range of healthy edible oils.

POHA LAUNCH

• Meanwhile, it has further strengthened its India Gate portfolio with the launch of India Gate Poha. This is a significant step in KRBL’s journey to become a staples partner to Indian households. The Poha category in India is a massive 2 million tonne market, of which 2 lakh tonnes is currently branded.
• In order to further diversify, the company has entered the real estate sector. This includes acquisition, development, construction, leasing, management and monetisation of moveable properties.

Shares of the company are currently quoted around Rs 385, and the scrip’s future prospects are quite promising in view of the company’s growing rice business and portfolio expansion.

PERFORMANCE INDICATORS (Rs. in crore)

NELCAST

One-stop castings shop for top OEMs

South-based, with its registered office located at Guntur and corporate office at Chennai, Nelcast is a leading castings and forging sector company with over four decades of undisputed manufacturing leadership in iron castings. The company was promoted by P Radhakrishnana Reddy, a far-sighted first-gen metallurgical engineer who built the company brick by brick. Initially, all the key functions – production, human resource development, marketing, after-sales service and financial management – were handled by himself. Under his leadership, the company has over the years honed its mantra of delivering value to customers by continuously updating technology, improving skills, increasing productivity and augmenting infrastructure.

Today, the company is engaged in the manufacture of ductiles and grey iron castings. It also produces castings for various domestic and global industries, including the automotive, construction, mining, railways and general engineering. Known for its one-stop shop approach, the company offers castings in different grades and sizes, and meets international standards. It not only enjoys a strong position in the domestic market but is also rapidly growing across North America, Europe and South East Asia. It can boast of diversified and distinguished customers, including original equipment manufacturers (OEMs) and top-tier commercial vehicle, tractor, off-highway equipment, railways and passenger vehicle companies. Some of its long-standing customers include TAPE, Tata Motors, Ashok Leyland, Volvo Eicher, Same Deutz Fahr India, Daimler, Automotive Axles, American Axles, Dana, and Wabtec ZF.

SALES BONANZA

The company is doing very well financially. During the last 12 years, the sales turnover has more than doubled from Rs 545 crore in fiscal 2015 to Rs 1,328 crore in fiscal 2026, with operating profit also more than doubling from Rs 45 crore to Rs 111 crore and the profit at net level also more than doubling from Rs 22 crore to Rs 48 crore. What is more, future prospects for the company are even better. Consider:

• Going ahead, the medium and heavy commercial vehicle sector is expected to remain strong, driven by a gradual recovery in economic activities, a thrust in infrastructure spending, favourable freight rates and improved utilisation of fleet capacities, once the global geopolitical tensions come to an end. The tractor sector is expected to show moderate growth in the current fiscal year on the back of a normal monsoon. The company has been meeting its volumes guidance of 85,000 tonnes in fiscal 2023, 1,00,000 tonnes in fiscal 2024, 1,10,000 tonnes in fiscal 2025, and 1,25,000 tonnes in fiscal 2026.
• The share price has moved up to Rs 175, indicating a three-year investor return of around 150 per cent. The stock price is expected to cross the Rs 200 mark by the end of the current fiscal year.

DOMESTIC SIGNS

The domestic CV industry volume is still short of its FY19 peak, but with the current recovery in CV demand boosted by infrastructure investment, scrapping of old vehicles and efforts to reduce total cost of ownership, the company is expected to see strong volume growth in the domestic market. An improvement in rural sentiment with increased agricultural income on the back of good agri output and higher prices for produce are bound to drive demand for tractors going forward. This is expected to boost domestic volumes for the company. A strong order backlog, addition of new customers, and new products will drive export volumes for the company. One can expect new product launches to be fully ramped up going ahead.

• Well-known rating agency ICRA has maintained an (ICRA) A rating for long-term instruments and (ICRA) AI for short-term instruments for Nelcast, upgrading the outlook from ‘stable’ to ‘positive’.

In the current downward drift in the stock market on account of growing geopolitical tensions, Nelcast has declined to Rs 133. Prospects for the company are highly encouraging once the geopolitical tensions ease. Of course, no one knows when the US-Iran conflict will end, but investors with a long-term perspective can certainly take a risk at the current price.

PERFORMANCE INDICATORS (Rs. in crore)