KRBL Ltd. share price target

KRBL Limited has posted robust consolidated operating numbers in Q1FY20 on the back of strong sales and realization in both domestic and export markets. Revenue from operations at Rs. 12177 Mn grew by 63.8% against same period last year and our estimate of Rs. 10686 Mn.

Robust Q4 and Full Year FY19 KRBL Limited has posted robust consolidated operating performances on both quarterly and full year basis on the back of strong sales and realization in domestic and export markets.

Q3FY19 - A Mixed Quarter: KRBL Limited has posted Q3FY19 financial result which is broadly in line with our estimates. Consolidated revenue of the company at Rs. 9358 Mn (againstour estimate of Rs. 8856 Mn) is up by 19% on YoY basis.

Healthy Q2FY19 Performance: KRBL Limited has reported healthy set of consolidated operating numbers duringQ2FY19 wherein its sales at Rs. 12448 has grown by 67.4% on QoQ and 74.0%on YoY basis.

Weaker-than-Expected Q1FY19: Double Digit Sales Growth Likely: KRBL Limited has reported dip in its top-line by 15% on QoQ and YoY basis as against our expectations of flattish growth, mainly as shipment worth Rs. 2000 Mn could not be shipped in the month of June'18 on account of logistics issue and the same has been shipped in July'18.

FY18, proved to be a challenging year for rice milling firms as GST was imposed on branded basmati rice, while leaving private label rice exempted of it. Further, paddy price remained at higher side with volatility. KRBL on its brand strength and inventory built up at a lower price around Rs. 31/kg, could successfully cope up the situation and managed to increase its domestic market share which is at 36%.

We believe that with GST impact getting normalized and changes in consumer preference towards branded Basmati rice in domestic market, also with Iran resuming purchases and entry into premium health foods segment, augurs well for KRBLs earnings.

Growth Story Continues; KRBL Limited posted consolidated revenue of Rs. 7835 mn in Q3FY18 which is down by 1.8% as against Q3FY17 on YoY basis, but 9MFY18 revenue ofRs. 23705 mn is up by 6.1% against corresponding period of FY17 on YoY basis.

KRBL in Q2FY18 posted consolidated revenues of Rs 716 Cr. (flattish YoY, down 18% QoQ), on account of GST related uncertainty. This combined with company's brand strength, higher price realizations in domestic market and other efficiencies, led to KRBL posting record high EBITDA margins of 26.2% v..

Mixed Earnings with Significantly Improved Margin: KRBL Ltd has delivered mixed performance in Q2FY18. The company reported consolidated revenue from operations in Q2FY18 at Rs.7155 Mn as against Rs.8718 Mn in Q1FY18 and Rs.7147 Mn in Q2FY17, registering de-growth of 17.9% on QoQ basis and flattish growth of 0.1% YoY basis.

Margin registered significant improvement: KRBL Ltd has deliveredyet another quarter of great performance. The company reported revenue from operations in Q1FY18 at Rs.8718Mn as against Rs.7223 Mn in Q1FY17 and Rs. 9128 Mn in Q4FY17 thereby registering growth of 20.7% on YoY basis but de-growth of 4.5% on QoQ basis. The company recorded EBITDA at Rs. 2031 Mn in Q1FY18 as against Rs.4468 Mn of Q1FY17 and Rs.1766 Mn of Q4FY17, marking de-growth of 54.6% but improvements in margin by 442 bps on YoY basis and growth of 15.0% with improvements in margin by 395 bps, on QoQ basis.

KRBL in Q1FY18 posted revenues of Rs 872 Cr. (up 21% YoY, down 4% QoQ), on account of 60% volume growth in the export markets.

KRBL in Q4FY17 posted revenues of Rs 913 Cr. (up 28% YoY, up 14% QoQ), on account of 26% volume growth in the overall rice production. Due to brand strength, lower cost of material consumed, higher price realizations in domestic market and other efficiencies, KRBL recorded PAT of Rs 110 Cr.

Improving Domestic and Global Demand Situation to EnsureSustained Growth: KRBL has posted positive set of numbers wherein on consolidated basis; its income from operations has increased to Rs.8185 Mn in Q3FY17 from Rs.7332 Mnof Q3FY16 thereby registering YoY growth of 11.6%. The company's operational expenditure fell to Rs.6385 Mn in Q3FY17 from Rs.6621 Mn over the same quarter of FY16 which helped the company record EBITDA growth of 153.0% and EBITDA margin improvements by 1228 bps YoY.

Mixed Performance Amid Uncertainties: KRBL has reported decline in its top line for the second time in row which stands atRs.7330 mn in Q2FY17, as against Rs.8003 mn in Q1FY17 and revenue contracted from Rs.8994 mn in Q2FY16 to Rs.7330 mn in Q2FY17 thereby registering de-growth of 8.4% QoQ and 18.5% YoY respectively. The decline in revenue has to be attributed to overall depressed export market conditions.

The company always educates its farmers with modern technology and skills of farming and getting results for that. Their flagship brand India Gate Basmati rice is a renowned brand in the world market. KRBL today is the largest rice miller. It has a strong brand presence through collaborations with global retails chains. The company has a wide market share in the Middle East countries, especially Saudi Arabia. KRBL exports basmati rice to 73 countries in the world. It is the largest manufacturer of Basmati Rice Seed in the world. The company has a...