KRBL- The King of Basmati rice


(bala) #82

KRBL ROE 22%, Daawat 20%. not much difference, but mcap of KRBL is 8x of Daawat.

90% of sales come from branded products for KRBL. Its 70% for Daawat. this explains Daawat sells more and at lower margins.

However brand recall of India Gate is much superior and the management has decades of experience in this field and they have more management bandwidth compared to Daawat.

Regarding 8x difference in mcap, I feel the gap will slowly narrow down. Daawat has plans to raise 500 cr soon, e-voting is going on. In my view both are good investment bets, after 2 quarters GST issues will be sorted out and both will gain mshare from unorganized sector.

Disc : Hold both , each more than 5%


(sachit) #83

There is a reasonable amount of irregularity in Daawat’s books of accounts (especially in their inventory valuation). Average closing stock of rice in LT was valued at 45/kg whereas the same in KRBL books was valued at 32/kg. Some caution is advised notwithstanding the steep valuation difference.


(kauban) #84

Q2FY18 results:

STANDALONE Q2FY18 Q2FY17 Growth
Revenue 74148 71586 4%
EBITDA 21357 15468 38%
EBITDA Margin 28.8% 21.6% 720 bps
PAT 12923 9865 31%

CONSOLIDATED Q2FY18 Q2FY17 Growth
Revenue 71655 71714 -0.1%
EBITDA 18762 15447 21%
EBITDA Margin 26.2% 21.5% 464 bps
PAT 10327 9842 5%

Anyone has an idea why the other income of 25.47 Cr in Standalone results doesn’t show up in consolidated?

Can someone who listened to the mgmt on TV today please post a summary of the discussion?


(1.5cr) #85

Would love a thesis on KRBL for a fresh entry. They seem very expensive at the moment. Comparing them to LT foods. Ive just started tracking the space.
I would love some insights on LT foods and KRBL.
Thanks!


(Kumar Saurabh) #86

Basmati rice is 2-3 year cycle of demand supply mismatch. So, m sure in future , you will get your opportunity . Would suggest to go through all icra reports on basmati rice n also try to get hold of export data for last 5-6 years to understand how this cycle plays. Of course, KRBL being a brand is relatively less prone to cyclic ffect ,neverthless, it gets reflected. The latest up cycle has started during March 17 after 2 years of lull n hence expected to continue for some more time . Disc : invested in theme but not in krbl


(nartinala) #87

LT foods seems to be catching up with KRBL…JV for the rice based snacks , new plants in US and Europe…should augur well for LT future growth aspect.


(MeetSugat) #88

Krbl is bigger brand than Lt foods


(tbhavesh) #89

Mohnish Pabrai’s funds buy 2.7% stake in KRBL


(mukeshbhatt77) #90

what would be the reasons for him to buy?- no the usual suspects but reasons we are missing and he he seeing…


(Jaclyn) #91


#92


This would be applicable for the paraboiled rice segment


(Gurmeet) #93

Basmati price has increased in international markets by 20%-25% in last one month after Iran has floated tender for importing 30000 tonnes of basmati rice from India.KRBL is India’s largest exporter of premium basmati rice with more than 30% share in total exports.KRBL is zero debt company & has not purchased paddy agressively this season because they already have surplus old stock purchased at low prices, this year paddy was expensive due to lower production. At current price of ₹640 market capitalisation is ₹15000 cr.


(shunz) #94

How is this a screaming buy at 33 PE :open_mouth:


(1.5cr) #95

(post withdrawn by author, will be automatically deleted in 24 hours unless flagged)


(nil_71) #96

His time horizon is 3-5 years. Not 3-5 Months.


(1.5cr) #97

Oh no. I thought his he wanted to cash out this month :o


(vishal kumar) #98

dont go just by his words…check his actions too…
I remember he bought few yrs back j&k & south ind bank along with rain ind…
but booked loss in both banks…he must be experimenting smthng new this time


(ishandutta2007) #100

The stock never showed any signs of cyclicalness in past 15 years.


(Rajesh) #101

KRBL did not purchase paddy this winter as it is costly this year. They have old paddy to use to make rice. May be this smart move of them will pay in disproportionate profits this year. I am very weak in accounting, I don’t know if this price difference is already there in profit loss statement of Dec 17. I guess Pabrai is discerning this.


(Ashish) #102

KRBL has always commanded better operating margins than competition. This justifies premium valuations. Over the years, KRBL has increased its margins significantly; OPM was 14.2% and NPM was 7.2% in FY12-13, which has expanded to 20.6% and 12.7%, respectively, in FY16-17. While most players are trading in Basmati rice, KRBL has focussed on end to end integration which results in superior performance versus competition. Valuations seems stretched at this moment but the stock is definitely worth premium multiples. Disc: Invested.

KRBL versus competion