KRBL- The King of Basmati rice

I think brands survive because people choose the conventional options to avoid regret. They fear that the new/cheaper product may be inferior. It’s a classic case of representativeness heuristic.
Just because the conventional product is expensive it must be better.
It’s our brain that’s wired to associate price with value. We believe a high price necessarily translates to top quality.
In my limited understanding, people stick to the old brands to avoid regret.
Humans have more intense reactions to consequences arising out of action rather than inaction. Hence, if they choose a new product and it’s bad, the regret will also be more.
To sum it up, desire for regret and blame avoidance plays an instrumental role in a brand’s success.
Just my thoughts, please correct me if I’m wrong.

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Here is more info about these products

KRBL is planning to launch a more branded product health segment (Hopefully rice related). Next year KRBL is planning to launch rice oil as per the video.

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Thank you for the model and calculations. Is not 5% terminal growth rate high and is favorably effecting your valuation?

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Some useful insights on basmati rice.

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Hey guys, I was looking at the corporate presentation of KRBL and the research report given by Axis Direct. The export realisations mentioned in KRBL presentation for 2017 is 81 rupees, whereas in Axis Direct report, it is mentioned that the realisations have fallen to 74 rupees. How can that be true since the prices of Basmati is higher than last year? Numbers of either the report or the company are incorrect.

I don’t mean to pollute the KRBL board.
However, I’ve a question and I haven’t been able to get an answer on the Internet.
KRBL claims to be the world’s largest miller. But, an American company called Riceland also claims to be the largest miller.
Please guide.
Disclosure: No holding yet. Would like to participate.

Does anyone know about the status of the GST issue over the India Gate brand? Is the brand still paying 0% GST or 5% like other rice brands?

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Certainly. The investment decisions should be based on the company’s performance.
However, when conflicting claims are made by two leading companies, I believe, we should place emphasis on finding the truth.
And, seldom do two people have the same views. Hence, we’ll have to agree to disagree. Nonetheless, thanks for sharing your views. It’s much appreciated.

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The upper limit of terminal growth rate is the probable growth rate of the Economy after 10 years. I don’t think it is unreasonable to think India will grow at 5% 10 years from now.

That happened due to some patent stuff Rules where they did not get their brand registered. This link should give you detailed explanation : https://www.pressreader.com/india/hindustan-times-delhi/20170707/282106341671214

Unregistered brands will be paying 0%GST.

All India Rice Exporters’ Association and other brands had written to the FM for clarification on the GST issue. I could not find the latest update on news media.


KRBL - Q3FY18 - Result Update_15-03-2018_10.pdf (421.2 KB)

according to this update from Axis Securities, GST is now charged at 5% on KRBL’s products after clarification from the govt.

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If you listen to their concall, they have mentioned that 5% GST is charged on their products and hence there was a fall in India income.

@shreys spent 5 minutes on Riceland’s website but didn’t see any capacity specification…also seems like its privately owned…may be KRBL is world’s largest “basmati” rice miller and Riceland is world’s largest for non-basmati rice…that’s my guess

@rupaniamit
Many thanks for trying to help me discover the truth.
I’m inclined to agree with your hypothesis that Riceland is the largest non Basmati rice player while KRBL is the leader in Basmati rice.
Riceland is a farmer association owned company. I think the Indian equivalent is AMUL.

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Thank you for your reply. I appreciate it . I have one more query even though it is discussed earlier. Discount rate taken by you in your calculation takes valuation to higher side. Why not we take 10% or 12% which can be opportunity cost or minimum expected return from investment. If we consider 10% then the stock becomes expensive.

Are we not very optimistic about the stock considering the fact that we are taking 5% as terminal growth rate, low discounting rate and 0% Margin of safety.

My queries may sound idiotic. I am learning from such discussions.

Can you kindly post in this thread? I’ll be more than happy to respond there.

I feel like we’re hijacking this thread with general Valuation discussions. Thank you.

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Many members have posted some questions to which i have definite answers so posting.
GST is applicable on KRBL products @ 5%. This was clearly clarified during q2 conf call. Unorganized Rice sellers have 0%.
The share of market figures given by KRBL are more accurate and i have experienced their overall accuracy on market size and nos over a period of years as compared to its peers and other Analysts.

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If I may, I’d like to ask you why you think the management is above average?
In the public domain there’s usually very little information available to be able to establish an impression regarding the leadership.