KRBL

Delhi based KRBL Ltd., is the largest rice miller and basmati exporter inthe world. Having seen an increase in demand for basmati rice (which is produced only in India and Pakistan) from cities situated mainly in MiddleEast and USA, the company has turned upbeat about the export outlook and thus it is all set to increase its production. The company has good distribution network and it has already tied up with Omar Ali BalsharafEstablishment (a leading super market chain and FMCG trader in Saudi Arabia) who has also picked up a 8.35% stake valued at US $ 3.07 million and alsowith other leading players in USA.With an installed capacity of 67 tph (tons per hour), the company is all set to complete the second phase of the acquired 150 tph Dhuri plant. InDecember 2003, KRBL acquired this 132 acre facility to process rice and theco-products namely rice bran oil and furfural. The unit was sick, when KRBL accquired and is being revamped in three phases.For the first nine months the company has achieved net sales of Rs. 5435 mnout of which nearly 52% was exports, as compared to sales of Rs. 5027 mn forthe complete previous year. Being a low net margin industry the company has taken various steps to improve it by selling the co-products, which generates high margins.

The operating profit of the company has increased by near about 100% and further more with an annualized EPS of Rs. 16 for FY06 the company is trading at 12x, which is substantially low, then its peers like Lakshmi overseasltd.