KRBL Limited: Company Overview

1. Founded in the year 1889, KRBL is Indias largest exporter of branded basmati rice and owns one of
the largest rice milling capacities. Its operations are basically divided into two segments:
Agribusiness and Energy. It has a capacity to mill 195 MT per hour of paddy via their various plants
in the basmati producing belt. It has a large portion of capacity that has been kept unused.
2. Products: It offers approximately 20 brands of basmati rice including India Gate, Train, Al Wisam,
Quilada, Doon and Nurjahan. Other products include Bran oil, furfural oil and de-oiled cakes. In the
energy segment, there is Power generation capacity of 53.5 MW (Captive: 10.9 MW; Commercial:
42.6 MW). It has wind power generation capacity of 37.7 MW and Biomass capacity of 15.8 MW.
3. Revenue contribution: Middle East 53%; India 42%; Rest of the World 4.5%. Agribusiness
contributes 98.4% to the total revenue generated. Rest is contributed by the energy segment.
4. Key export markets: Their major production is exported to Saudi Arabia, Kuwait, UAE, Canada and
Australia.
5. Market position: It is Indias largest exporter of branded basmati rice. It is a market leader in Saudi
Arabia. Its brand India Gate has been enjoying the highest market share in exports over the past
few years. In energy segment, it is self-sufficient in captive requirements. Wind business is still
nascent compared to other renewable energy companies such as Suzlon and Orient Green Power.
6. Fundamentals: In comparison with its peers, KRBL enjoys better realizations, RoEs and lower debt.
Also, KRBL has significant unused capacity, which offers opportunities for increased asset sweating
and RoEs.
7. Strength: On account of growing demand, premium pricing, lower regulations and rise in areas
under cultivation, it enjoys strong position in the market.
8. Key risks: In addition to geopolitical risks, the basmati rice industry faces regulatory risks both at
home and abroad. While cultivation of basmati rice requires less water than normal rice, it is still
exposed to vagaries of nature such as unseasonal rains, floods, etc. Unrest in the Middle East,
payment issues associated with Iran, dependence on rainfall, regulatory hassles in domestic and
export markets are the major risk factors. In the energy segment, lower PLF, especially in wind
plants and regulatory - withdrawal of favourable tax treatment, preferential tariff, etc. have brought
risk to this segment.
9. Demand drivers: Increasing preference for basmati rice in export markets and food scarcity across
the world are the major demand drivers in agribusiness. Other factors include increase in middle
class people, increase in hotels and restaurants, mall culture. In the energy segment, huge power
deficit in the country and mandatory requirement for State utilities to purchase at least 5% of the
power from renewable energy has increased the demand.
10. Key competitors:
Domestic and export markets: REI Agro, Kohinoor Foods, LT Foods, unbranded basmati and private
labels
New players, such as Bush Foods and Shakti bhog are entering the market.