Amey Kulkarni of Candor Investing Fund presented his in-depth investment thesis on KRBL Ltd (India: KRBL) at Asian Investing Summit 2019.
KRBL, with a market cap of approximately USD 1.2 billion, is a retailer of the long-grain aromatic rice. Basmati rice is the aspirational variety of rice for people who prefer the non-sticky rice over the sticky rice in the rice-eating world (i.e., the Indian subcontinent, the Gulf countries, and most of Africa). KRBL supplies to 82+ countries, and its brands rank among the top three in India, the United Arab Emirates, Saudi Arabia, Qatar, Oman, and several African countries.
KRBL has roots dating back 130+ years and not only understands the Basmati rice business, but has also been a pioneer in R&D and the adoption of the latest technological trends in the production, distribution, and marketing of Basmati rice.
Basmati production is only approximately 2% overall rice production. With per-capita GDP around USD 2,000 in India and growing rapidly, Basmati rice consumption is expected to grow exponentially from a low base. KRBL has a long runway of growth ahead.
The company has demonstrated strong business performance over several decades and is the preferred Basmati rice brand globally. This formidable franchise is available at less than 10x operating earnings.
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About the instructor:
Amey Kulkarni invests in the Indian Public Markets in companies deriving their competitive advantage from unique and / or innovative business models. This means bottom-up stock picking of businesses that don’t require external capital, have the ability to grow for several years in the future and are run by honest and hungry management. Amey partners with select individuals/trusts/family offices to manage their equity investments. Amey believes that patient capital is critical to success in the stock markets.