KRBL- The King of Basmati rice


(GSrikan) #585

Pretty good results.

Rev up 74% (1250 cr vs 716 cr YoY)
PBT up 44% (222 cr vs 157 YoY)
Agri Revenue up 76.6% (1194 cr vs 676 cr YoY)
Power Revenue up (69 cr vs 52 cr YoY)
PBT Agri up 29.5% (184 cr vs 142 cr YoY)
PBT Power up 40.7% (38 cr vs 27 cr YoY )
Domestic Agri Revenue up 47% (558 cr vs 380 cr YoY)
Export Agri Revenue up 114% (635 cr vs 296 cr YoY)

Exports Seems to have contributed primarily. Domestic, Power too contributed.

Finance costs 92 lakhs vs 13.91 crores (YoY). (Need to understand whether is some kind of adjustment of forex gains into finance costs; Balance sheet indicates Short term Borrowings are down to 115 cr from 1164 cr Six months back; 208 cr Year back)

Receivables stable YoY at 253 cr (vs 246 vr six month back; 261 cr Year back). Payables down to 56 cr (vs 115 cr Six months back & 84 cr and Year back).

Got to listen to concall to understand this Export performance is sustainable or not in coming quarters.

Discl: Invested


(rupaniamit) #586

Last quarter management mentioned that a cargo (worth approx 150-200cr) for Middle East was lying at the port and they weren’t able to ship it by end of Q1. The sale for this cargo is included in Q2 result and hence export numbers are inflated. Need to understand realization trend and value of existing inventory.

Margins were under pressure for Q2FY19 as perhaps benefit of lower cost inventory is not left anymore:

image


(GSrikan) #587

Video version:

Text version:

Very silly interview to replace important conference call. Not much useful info other than management were aggressive in increasing sales so had to sacrifice margins. H2 would be close to H1. No answer to investigation part of question. Iran seems to be planning to buy rice using rupee. No benefit of dollar appreciation due to 80% of dollar revenues are hedged.

Reading between the lines, looks like they have reduced the prices to compete with new players like Adani-wilmer, Patanjali etc…

Disc: Invested


(jajushobhit) #588

While I broadly agree with your analysis, there is a ~7-8% increase in realizations (both domestic and exports). Further, another positive is the ~35% increase in domestic volumes. Though, one may argue that it has come at the expense of margins. Giving the link of the presentation uploaded by the company on website.

Regards
SJ


(Dinesh Sairam) #589

(ramdhawad) #590

Wasn’t the share sell to Pabrai funds ? So if ED follows the order, does that mean the buyer will have to take delivery ? And at what price ? Nothing to do with KRBL, just curious to understand how this will unfold.


(Dinesh Sairam) #591
  1. Yes. It was sold to Pabrai.
  2. Yes, ideally he has to. But he will have to pay the original price, otherwise the Saudi investors will be at a loss.
  3. But if he does, he will be in a severe loss.

Interestingly, the court has allowed the investors to sue the ED for damages caused. So, we’ll have to wait and see how this unfolds.

This is a lesson in many ways. A lesson about tailing famous investors, a lesson about not giving into the market’s mood swings and most importantly, a lesson about a good investment always coming with a certain amount of discomfort.

As I’d expressed in my blog post long back, I think KRBL is a good buy at sub-₹315 levels. I still stand by the statement, despite all the criticism I faced back then.


(ad9) #592

As per court order ED had released the blocked funds of pabrai after one month from the date it had asked exchange to not complete the transaction… So Pabrai was already free and lucky… Source _twitter posts

Any transaction by balsharaf now will only take place as per prevailing Mkt …also ED can appeal the court order


(k praveen) #595


(cool_gaurav) #596

Basmati Rice price rising…


Yesterday, In interview with CNBC TV18 Mr. Anil Mittal (CMD) was sounding very bullish… Looks like KRBL will gain its glory back after the judgement of HC (Major overhang on the stock)


#597

Ref. to data from @phreakv6 's website. Seems like multiyear low for basmati exports in the last quarter.
Am I interpreting the data correctly?
If yes, any reason for the massive down trend ?


(phreak) #598

@dipen01 - Q3 data is not yet complete so please refer to the monthly. It is not as bad but though there is growth in realisations, volumes have been shrinking.

https://phreakonomics.in/export-import/micro-individual?type=exports&hscode_commodity=486&startDate=2000-04-01&endDate=2019-01-01&currency=inr&consolidation=month


(kauban) #599

Iran ban would have been in effect during the past several months. It was lifted sometime in Dec 2018. That could explain the drop in export figures. Iran is the world’s biggest consumer of basmati and has the greatest share of imports. I could be wrong, but just trying to back trace.


#600

A quick search on Iran in this thread, calls out <3% of exports to Iran by KRBL.I remember reading that same or even lesser was applicable to Chaman Lal Setia. There might be other countries that are witnessing slowdown in volumes


(phreak) #601

I have updated principal commodity data for Dec-2018. This for basmati rice corresponds to individual commodity data as is, so it can be used for comparison.

https://phreakonomics.in/export-import/micro?type=exports&country=0&commodity=4&startDate=2000-04-01&endDate=2019-01-01&currency=inr&consolidation=month

Dec numbers are not bad as there is both volume and realisation increase

As for Iran, December had a big contribution from Iran (this was less in previous months, so Iran might be the big factor here).


(rupaniamit) #603

Decent Quarter. 9M numbers looking good. Management started giving realization numbers in Corp Presentation which is great. Good to see increase in volume for domestic market by 14% and increase in realization for exports by almost 45%.Strong inventory position at 3364cr compared to 2712cr same quarter last year. Investor’s should carefully read note #4 to financial statements pasted below.


(kris2727) #604

Below will be dent KRBL as they recieved Income tax Demand Notice of 757 crores plus 511 crores interest. Board has decided to challenge it .


(phreak) #605

I just did a quick calculation - PBT from FY10 to current is 2891 Cr and in the same period they have paid a tax of 675 Cr (from cash flow statement) which works out to 23%.

A demand of 757 Cr makes no sense. But the IT dept is making this claim after raids and assessment so this is backed by something strong. The IT dept is claiming an additional income of 2220 Cr which implies a massive underreporting of numbers. This is damning on two fronts - A claim of 1268 Cr of tax + interest can sink the company if upheld. If the IT dept’s assessment is in fact right, what happened to this 2220 Cr? Has the management siphoned this money off?

Some similar cases I found

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=534
https://www.taxlok.com//view/latest-library-news/latest-details-news.html/id=9744/key=E

Disc: No holdings


(rupaniamit) #606

Lower tax rate because it invested in energy business to take advantage of MAT. I have a feeling this claim by IT department is because of their business in energy segment. Hope BTV host asks management about this in interview on Monday so that management can share more details.


(Krishnendu) #607

Hi @phreakv6 thanks a lot for the brilliant analysis on this sector but my experience is Market never going to give a premium value to a stock whose management is having some integrity or corporate governance issue.
So I think we should discuss other stocks in the same area like LT foods or chaman lal setia who has also suffered the industry down cycle. Not sure if we are already having a separate thread for them if not we can initiate one as well.