KRBL: Owner-Operated Basmati Rice Leader with Strong Economics

Rajeev Agrawal of DoorDarshi Advisors presented his in-depth investment thesis on KRBL (India: KRBL) at Asian Investing Summit 2020.

Thesis summary:

KRBL is the world’s largest rice miller and the biggest player in the branded basmati rice market. KRBL’s brand, India Gate, has 35% market share in the Indian basmati market. KRBL is also the largest player in the Middle East, the largest export market for basmati rice. The company has continued to increase market share in India and most export markets.

KRBL has reported ROE of 20+% and ROCE of 20+% over many years. The company has grown revenue three-fold over the last decade and has grown EBITDA seven-fold in the same period. This growth has been achieved without any equity dilution.

Insiders own 59% of the company. Management has increased its stake from 53% in 2008 to 59% in 2020, driven by open market purchases. The company does not grant employee stock options. Management compensation is under 1% of earnings. Over the past three months, management has bought 38 crores of stock at an average price of INR 252 per share.

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About the instructor:

Rajeev Agrawal is the Founder and Adviser at DoorDarshi Advisors. Rajeev has been investing in the US and Indian equity markets for 15+ years. Rajeev follows Value Investing principles and finds that Indian equity market provides wonderful opportunities for his style of investing. Prior to starting DoorDarshi, Rajeev was a Technology executive focusing on the Financial Industry. He retired from IHS Markit as MD and CTO. Prior to that he has worked in US in various senior positions at Goldman Sachs, Bank of America, JP Morgan and Dresdner Bank. Rajeev completed his B.Tech from IIT Bombay and MBA from IIM Calcutta. He is also a CFA charterholder.