KRBL Limited: history, ownership, mission, how it works & makes money

A Brief History of KRBL Limited

Founded in 1889, KRBL Limited has established itself as a leader in the agro-based industry, primarily focusing on the production and export of basmati rice. The company is headquartered in Noida, India, and has grown to become one of the largest basmati rice manufacturers in the world.

By the early 1990s, KRBL Limited began expanding its operations internationally, tapping into markets in the Middle East, Europe, and North America. The strategic decision to invest in modern technology enhanced its operational efficiency and quality control, solidifying its market position.

In the financial year ending March 2023, KRBL Limited reported revenue of ₹3,320 crore, a significant increase from ₹2,843 crore in FY 2022. The company’s EBITDA for FY 2023 rose to ₹521 crore, reflecting a solid EBITDA margin of 15.7%.

KRBL Limited's flagship brand, "India Gate," is recognized globally and contributes significantly to the company's export revenue. The brand has captured a substantial share of the Indian and international basmati rice market, with exports reaching approximately ₹1,200 crore in FY 2023.

In addition to expanding its product portfolio, KRBL has positioned itself in sustainability initiatives, focusing on water conservation and organic farming practices. In 2023, the company achieved a 25% reduction in water usage per ton of rice produced, aligning with global sustainability goals.

As of the end of Q2 FY 2024, KRBL Limited's share price has shown resilience, trading at approximately ₹350 with a market capitalization of around ₹6,600 crore. The stock has seen a year-to-date increase of 12%, reflective of positive investor sentiment driven by strong quarterly earnings and a robust demand outlook for basmati rice.

KRBL Limited continues to innovate through technological advancements, such as AI-driven supply chain management, to enhance efficiency and consumer engagement. The recent introduction of QR codes on packaging provides consumers with detailed product information, elevating transparency and brand trust.

As of FY 2023, the company reported a return on equity (ROE) of 14%, computed on a net profit of ₹220 crore against a shareholder's equity of approximately ₹1,569 crore.

KRBL's focus on research and development has also led to the introduction of new basmati rice varieties, which are designed to be more resilient to climate change. These innovations support the company’s long-term sustainability and growth strategy.

The total production capacity of KRBL's milling facilities stands at over 5,00,000 tons per annum, positioning the company to meet increasing global demand for basmati rice.

With a consistent commitment to quality, innovation, and sustainability, KRBL Limited remains a key player in the competitive landscape of the agro-food industry.

A Who Owns KRBL Limited

KRBL Limited is one of India’s leading rice producers and exporters, especially known for its Basmati rice. The ownership structure of KRBL Limited is notable for the significant stake held by both public and private entities.

As of the latest available data, the ownership is structured as follows:

The promoter group includes key individuals and their family members, which constitutes the majority stake. Among the prominent promoters is Mr. Rakesh K. Jain, who plays a pivotal role in the company's operations and strategic direction. The Jain family established KRBL in 1889, and their continued involvement has ensured a strong legacy in the rice industry.

In terms of institutional holdings, a number of mutual funds and other financial institutions have vested interests in KRBL. For instance, the largest institutional shareholders include:

As of the latest quarter ending June 2023, the total number of outstanding shares for KRBL Limited is approximately 30.45 million shares. The market capitalization of KRBL stands at about INR 5,280 crore (approximately USD 635 million), reflecting its robust position in the market.

It is also noteworthy that the company has consistently delivered returns to its shareholders. The stock price as of the end of September 2023 was approximately INR 173 per share, having shown a growth of about 12% since the beginning of the fiscal year. This growth trajectory can be attributed to the expanding demand for Basmati rice, both domestically and internationally.

Furthermore, KRBL Limited's revenue for the fiscal year 2022-2023 was reported at around INR 3,200 crore (approximately USD 385 million), with a net profit of INR 400 crore (USD 48 million), leading to a net profit margin of approximately 12.5%.

The evolving landscape of rice production and export in India signifies that KRBL Limited's ownership structure plays a crucial role in its operations. The promoter’s long-term vision, backed by institutional support, positions the company favorably in the competitive market.

KRBL Limited Mission Statement

KRBL Limited, a prominent player in the Indian agro-based industry, specifically in the production of basmati rice, strives to deliver high-quality products while emphasizing sustainable and ethical practices. The company's mission centers around providing superior quality rice through innovation, integrity, and customer satisfaction, ensuring that they meet the diverse needs of global markets.

The company aims to establish a strong foothold in the international market, enhancing its global presence. In FY 2022, KRBL Limited reported a revenue of approximately ₹3,225.67 crores, reflecting an increase from ₹2,899.09 crores in FY 2021. The growth in revenue is linked to the expansion of production capacities and a focus on exporting basmati rice across various regions.

Core Values and Objectives

• Quality: Commitment to providing the highest quality basmati rice.
• Innovation: Emphasis on research and development to enhance product offerings.
• Sustainability: Focused on eco-friendly practices and social responsibility.
• Customer Centricity: Understanding and fulfilling customer needs worldwide.
• Integrity: Conducting business with honesty and transparency.

Financial Overview

To further illustrate KRBL Limited's financial performance, the following table summarizes key financial metrics from the last three fiscal years:

KRBL's commitment to sustainability is evident in its practices, including water conservation measures and reducing carbon footprint within its operations. The company has also been recognized with various awards for its quality and contribution to the industry, reinforcing its mission to be a leader in the agro-food sector.

As the company continues to expand, its mission statement reflects not only its goals for high-quality products but also its dedication to sustainable growth and community welfare. This balance between profitability and responsibility positions KRBL Limited as a notable player in the competitive landscape of the agricultural sector.

How KRBL Limited Works

KRBL Limited is one of the largest rice manufacturers in India, specializing primarily in the production and export of basmati rice. Headquartered in Noida, India, the company operates in the agribusiness sector, engaging in the cultivation, processing, and marketing of rice. As of FY 2023, KRBL reported a revenue of ₹3,174 crores (approximately $384 million). The company's operations encompass a wide range of activities from sourcing raw materials to distributing finished products.

The company’s rice business is segmented into three key areas: manufacturing, marketing, and export. KRBL has a fully integrated supply chain model that ensures quality control from paddy selection to the final packaging of rice. The company collaborates with farmers to procure the best quality paddy, ensuring that around 90% of its required paddy is sourced directly from farmers.

In FY 2023, KRBL achieved a gross profit margin of 30.1%, reflecting its strong pricing power and operational efficiency. The net profit for the same period stood at ₹461 crores, representing an increase of 12.5% from the previous fiscal year.

KRBL’s brand portfolio includes well-known names such as 'India Gate,' which is one of the leading basmati rice brands in India. The company exports its products to over 80 countries across the globe, including the USA, UK, Saudi Arabia, and Australia, contributing to about 30% of total sales. In FY 2023, export revenue reached ₹960 crores, a growth of 15% from the previous year.

In terms of operational capacity, KRBL has state-of-the-art processing facilities with a milling capacity of around 120 tons per hour. The company has invested heavily in technology to enhance productivity, including modern automated systems for processing and packaging, ensuring that quality and efficiency are maintained throughout the production cycle.

The company maintains a strong balance sheet with a debt-equity ratio of 0.17 as of March 2023, indicating a low level of financial leverage. Total assets stood at ₹2,252 crores, while total liabilities were ₹384 crores.

KRBL also emphasizes sustainability in its operations. The company has implemented measures for water conservation and waste management in its production processes. It aims to reduce its carbon footprint and promote environmentally friendly practices among its suppliers and across its operations. This commitment to sustainability not only enhances brand image but also appeals to environmentally conscious consumers.

How KRBL Limited Makes Money

KRBL Limited operates primarily in the rice industry, specifically focusing on the production and sale of basmati rice. The company is renowned for its extensive supply chain, which encompasses everything from procurement to distribution. In the fiscal year 2022, KRBL Limited reported total revenues of approximately ₹3,053 crores (around $370 million). This marked a year-on-year increase of 5.8%.

The company's income is derived from several key segments:

• Basmati Rice Sales: KRBL is one of the largest basmati rice exporters in India, controlling about 25% of the country's basmati rice market. In FY2022, the revenue from this segment accounted for approximately ₹2,278 crores.
• Branded Products: The company has developed a strong brand presence, with its brands such as "India Gate" and "Nawazish." Sales from branded products contributed around ₹560 crores to the total revenue in FY2022.
• Other Income: Besides rice, KRBL generates income through processing and selling of by-products, which contributed an additional ₹215 crores.

KRBL's operational efficiency is highlighted by its gross profit margin, which stood at 23.4% in FY2022, indicating effective cost management and pricing strategy. The company’s EBITDA margin was reported at 12.5%, reflecting substantial earnings before interest, taxes, depreciation, and amortization.

Furthermore, KRBL's export operations are crucial to its revenue stream. In FY2022, the company exported approximately 1.5 lakh metric tonnes of basmati rice, primarily to markets in the Middle East, North America, and Europe. This not only boosts the company's income but also strengthens its brand recognition internationally.

Another significant factor contributing to KRBL's profitability is its strategic investments in technology and infrastructure. The company has made substantial capital expenditures, totaling approximately ₹120 crores in FY2022, aimed at upgrading its rice processing plants and enhancing its logistics capabilities. This investment facilitates efficient operations, reduces wastage, and ultimately increases the margins on its products.

Lastly, KRBL Limited benefits from favorable government policies aimed at promoting agricultural exports. Incentives such as the Merchandise Exports from India Scheme (MEIS) provide financial support to exporters, further enhancing profit margins.