KRBL Limited

Anil Kumar Mittal

Chairman and Managing Director

Anoop Kumar Gupta

Joint Managing Director

Ayush Gupta

Head, Domestic Division

Ashish Jain

Chief Financial Officer

112 million

enefited non-basmati rice crop. When compared with the production of Kharif season 2021, which was 112 million metric tons, the production this year is lower by 6% at 105 million metric tons, out of which bas

6%

ion of Kharif season 2021, which was 112 million metric tons, the production this year is lower by 6% at 105 million metric tons, out of which basmati is around 7.5 million metric tons. In the last

105 million

Kharif season 2021, which was 112 million metric tons, the production this year is lower by 6% at 105 million metric tons, out of which basmati is around 7.5 million metric tons. In the last 10 years, India

7.5 million

he production this year is lower by 6% at 105 million metric tons, out of which basmati is around 7.5 million metric tons. In the last 10 years, India's rice production has grown at a CAGR of 2.4% per annum

rs,

5 million metric tons, out of which basmati is around 7.5 million metric tons. In the last 10 years, India's rice production has grown at a CAGR of 2.4% per annum, whereas India's rice consumption has

2.4%

und 7.5 million metric tons. In the last 10 years, India's rice production has grown at a CAGR of 2.4% per annum, whereas India's rice consumption has grown at a CAGR of 0.9% per annum. The production

0.9%

ion has grown at a CAGR of 2.4% per annum, whereas India's rice consumption has grown at a CAGR of 0.9% per annum. The production yield has grown much higher than the domestic consumption which has hel

21.21 million

has helped India to become the larger rice exporter in the world. Last year, India exported around 21.21 million tons of rice, out of which Basmati exports were 3.95 million tons. The government of India on 8th

3.95 million

ld. Last year, India exported around 21.21 million tons of rice, out of which Basmati exports were 3.95 million tons. The government of India on 8th September 2022 imposed an export duty of 20% on non-basmati r

20%

ts were 3.95 million tons. The government of India on 8th September 2022 imposed an export duty of 20% on non-basmati rice, exempting non-basmati parboiled rice and all varieties of basmati rice. Thes

100%

o fulfill their obligation of free distribution of wheat and rice to the under-privileged, whereas 100% broken rice was completely banned for exports. There is a huge demand for broken rice for manufac

1.5 million

the country. We would like to add that broken rice was primarily exported to China to the tune of 1.5 million metric tons. This year, in the first half, India has exported around 2.2 million tonnes of basma

“As a reminder, all participant lines will be in the listen only mode.”

“And there will be an opportunity for you to ask questions after the presentation concludes.”

“In the last 10 years, India's rice production has grown at a CAGR of 2.4% per annum, whereas India's rice consumption has grown at a CAGR of 0.9% per annum.”

“With the imposition of 5% GST, the demand for KRBL brands have improved significantly which would be witnessed in the third quarter, the details will be shared by Ayush, who heads the domestic department.”

“We have still to finalize the HoReCa segment for which our efforts are ongoing, and we expect that during Quarter 4 we will be able to finalize it.”

“We have effectively appointed 167 new distributors in this financial year so far, and we are on track with our target to expand our”

“On the third strategy, on augmented product portfolio, while the non-basmati initiatives remain under the work, I'm happy to share that Unity brand has grown by over 40% in this financial year and is on track to reach the INR1,000 crore mark by the end of financial year 2025.”

“As a category captain, our approach will be to focus on the long-term evolution of the category.”

“In the half year, 20-plus percent top line growth that we see, what will be the volume growth in this?”

“But we expect that we will get a good distributor.”

Anil Mittal

13

Anoop Gupta

9

Ashish Jain

5

Pritesh Chheda

4

Nitin Awasthi

3

Amit Doshi

3

Manish Bhandari

3

Amit Aggarwal

3

Moderator

2

Siddharth Rangnekar

1

Siddharth Rangnekar

Ladies and gentlemen, good day, and welcome to the KRBL Limited Q2 FY'23 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, Siddharth. Thank you, Rochelle. Welcome to KRBL Limited's Q2 and H1 FY'23 Earnings Conference Call for analysts and investors. I'm pleased to introduce to you senior members of the management team on today's call. We have with us Mr. Anil Kumar Mittal, Chairman and Managing Director; Mr. Anoop Kumar Gupta, Joint Managing Director; Mr. Ayush Gupta, Head, Domestic Division; and Mr. Ashish Jain, Chief Financial Officer. We propose to begin with updates f

Anil Mittal

Good afternoon, investors. I would like to brief you on the production and consumption of Indian rice crop this year since there have been many changes due to deficient monsoons. However, as we've all witnessed, there were rains in the month of September and October, which slightly damaged basmati rice crop, but benefited non-basmati rice crop. When compared with the production of Kharif season 2021, which was 112 million metric tons, the production this year is lower by 6% at 105 million metric tons, out of which basmati is around 7.5 million metric tons. In the last 10 years, India's rice production has grown at a CAGR of 2.4% per annum, whereas India's rice consumption has grown at a CAGR of 0.9% per annum. The production yield has grown much higher than the domestic consumption which has helped India to become the larger rice exporter in the world. Last year, India exported around 21.21 million tons of rice, out of which Basmati exports were 3.95 million tons. The government of Ind

Ayush Gupta

distribution reach to 250 new towns by the end of this financial year. Our numeric distribution percentages had already increased by 370 basis points in quarter 2, but we'll be seeing the true results of this in the subsequent quarters. In the past year, our secondary sales coverage stood at 31%, which means the percentage of distributor sales being captured by our field sales team. In the first half of this financial year, we have been able to expand our secondary coverage to 38%, a growth of 700 basis points. This is in line with our strategy to drive the category through robust active retailing. Increase in secondary sales coverage has resulted in higher throughput at retail outlets, improved relationships with trade and better saliency of the brand. We will continue to drive this feature and are targeting to reach 60% secondary sales coverage by financial year 2025. On the third strategy, on augmented product portfolio, while the non-basmati initiatives remain under the work, I'm h

Ashish Jain

Thank you, Ayush. I will now take you through the performance for the quarter ended September 30, 2022. All figures mentioned by me would refer to the consolidated financials of KRBL Limited. Total income for the quarter stood at INR 1,340 crore, marking a growth of 26.5% over the corresponding quarter last year. Gross profit of the company increased by almost 50% and EBITDA and PAT increased by almost 50% and 56.4%, respectively. The company recorded several highest-ever metrics, too. For example, the company recorded highest total income, highest EBITDA, highest PBT, highest PAT, highest total comprehensive income and highest quarterly earnings per share in the quarter. Revenue from operations grew by 25.2%, led by export sales which grew by 105% to INR 592 crore. Domestic sales, excluding power, were at INR 696 crore or lower by 5%, but this is on account of higher bulk rice sale in the corresponding quarter last year. Excluding bulk rice, referring to branded sales, branded sales g

Pritesh Chheda

Our first question is from the line of Pritesh Chheda from Lucky Investment Managers Pvt. Ltd. Please go ahead. I have a few questions. In the half year, 20-plus percent top line growth that we see, what will be the volume growth in this?

Anil Mittal

Okay. What explains the improvement in margins that we see in the first half now? So, I think the improvement in margin is explained by 2 factors. One is there is improvement in product mix, which is higher share of higher realization SKUs and also the general increase in rice prices that we've seen over the last, I would say, now 3 quarters. Okay. Looking at the current scenario, do we see the H1 performance sustaining in H2? Yes, definitely, our third quarter and fourth quarter is going to reflect H1 performance. And my last question is, sir, I see the export business in the first half at about, let's say, INR1,077 crore. Looks a lot of improvement versus the last year's number, because last year full year number was about INR1,500 crore, INR1,600 crore, my guess. So now what is the progress on the Saudi and the Iran business for us to better understand this export business of INR1,077 crore that I see in the first half. As I conveyed in my opening remarks, we are doing very well in