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KRBL Ltd.

BSE: 530813 Sector: Agri and agri inputs
NSE: KRBL ISIN Code: INE001B01026
BSE 00:00 | 26 May 222.55 5.30
(2.44%)
OPEN

217.40

HIGH

225.50

LOW

206.75

NSE 00:00 | 26 May 222.05 4.75
(2.19%)
OPEN

215.40

HIGH

230.00

LOW

206.65

OPEN 217.40
PREVIOUS CLOSE 217.25
VOLUME 70027
52-Week high 337.45
52-Week low 184.85
P/E 10.70
Mkt Cap.(Rs cr) 5,239
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 217.40
CLOSE 217.25
VOLUME 70027
52-Week high 337.45
52-Week low 184.85
P/E 10.70
Mkt Cap.(Rs cr) 5,239
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KRBL Ltd. (KRBL) - Chairman Speech

Company chairman speech

Dear Shareholders

As I sit down to write this year's message the only thing that crossesmy mind is that how challenging the year has been for most of us. At the outset we trustyou and your family are keeping well in the unprecedented COVID-19 pandemic. FY21 will beremembered as one of the most challenging years in recent times as COVID continues toaffect our lives and livelihoods. Maintaining food supply has been a critical requirementof the government and as a supplier of an essential commodity we have much to be proud ofin the way we have risen to the challenges presented by this devastating pandemic.

Staying true to our corporate ethos I find myself reassured withregards to the trust and confidence I had put in my colleagues over the years butespecially over the past year when we were put to yet another test of resilience as theraging pandemic continued to wreak havoc in people's lives across countries and economies.It's been a year like no other and the way our people have responded and what they haveachieved has been nothing short of inspirational. I was confident we would manage to stayon top of the crisis being a resilient organization. The confidence was not misplaced asall our colleagues across our facilities came together in the most inspiring ways toensure that we continue to serve our customers and grow our business. Our results thisyear show how we have built a committed resilient and agile business with a purpose thatpermeates across the organization and a strategy that is delivering consistent growth.

SECTORAL OPTIMISM

The Indian economy witnessed a contraction of more than 8% in FY21 dueto the prolonged lockdown imposed across the country to contain the spread of thecoronavirus. But the Indian agricultural industry has shown immense resilience all throughthese tough times and proved to be the shining star. When most other industries remainedtepid or might have even retreated into negative territory the agri and allied sectorrecorded a strong 3.4% growth at constant prices in FY21.

Support from policymakers and favourable government policies such asPradhan Mantri Gram Sinchai Yojana (PMGSY) Pradhan Mantri Krishi Sinchai Yojana (PMKSY)and Pradhan Mantri Kisan Samman Nidhi Yojana (PMKSNY) further contributed to the sector'shealth during FY21. Also the favourable weather condition during the two-cropping seasonin FY21 played a major role in supporting the growth of the Indian agriculture industry.Backed by these factors the overall Indian agriculture exports registered a strong 17.34%growth in FY21 to stand at the US $41.25 billion.

DELIVERING A COMMITTED AND RESILIENT PERFORMANCE

We entered FY21 with positive sales momentum underpinned by thestrength of our brands and wide portfolio. But onset of the COVID-19 and the resultantlockdown impacted our business also. Being in the food industry we classify as anessential business and during the pandemic all our manufacturing facilities have remainedoperational. Further support to the business was provided by our strong farmer communitywho worked relentlessly even during the lockdown period to ensure that we had a steadysupply of raw materials. However the major constraint faced by us during this period wasrelated to the transportation of goods. Despite the government allowing the free transportof essential commodities across the country and also internationally limited availabilityof labours vehicles shipping cargos and rising logistical costs proved to be a hurdle.

But being KRBL we managed to not just overcome these challenges butthrive. We steered the tough environment by further fortifying our strengths andleveraging newer opportunities. Besides protecting our current market position we gearedup to make the organization more efficient to take on the short-term challenges. Wefocused on upgrading our supply chain to an integrated one while leveraging thee-commerce channel during the year to ensure that our products in timely manner availableto our customers be it retail or institutional. Further we emphasized on enhancing ouromni-channel presence with increased coverage of modern retail and e-commerce platformswith deep engagement with our customers through responsive and emotional communicationsand social media connect.

Even though KRBL has been affected by the harsh impact of COVID-19during the first couple of quarters our growing retail business and strong brandportfolio together with our organizationwide transformation strategy helped us deliver afinancial performance above our expectations. Our performance can be ascribed to theagility of our organization the versatility and the quality of our restructuring strategyand agile business model. The quality of our brands and our ability to move more productsinto the soaring retail sector meant that we achieved exceptionally strong growth in ourbranded product segment. Despite the challenges we recorded our highest ever PAT of Rs565 crores and repaid net bank debt worth Rs 321 crores during the year. This stronglydemonstrates the cash generation capability of our business model and our strong desire todrive an operational expansion without being reliant on external borrowings. Finally weare moving closer to our commitment of emerging as a debt-free company. As of 30 June2021 we have total bank debt worth Rs 16 crores in our books compared to a total equityof Rs 3833 crores and expect to become debt free in FY22. Talking about our performancehighlights for the year we sold 6.24 lacs tonnes rice during the FY21 compared to 6.20lacs tonnes in the previous financial year. Our total income stood at Rs 4015 crorescompared to Rs 4522 crores in FY20 while our net worth stood at Rs 3693 crores comparedto Rs 3128 crores. EBITDA stood at Rs 845 crores compared to Rs 893 crores while PBTwas Rs 749 crores compared to Rs 758 crores in the preceding year.

As part of the core business strategy we focused on expanding ourinventory levels during the year to taking advantage of the favourable paddy prices. Wegrew our inventory by Rs 112 crores and stocked up incremental quantities in order to meetour raw material requirement for the next couple of years. This strategy not only gives usa unique base to grow volumes at a pace that we are comfortable within the coming year butalso provides us with a pricing advantage. Also with the announced increase in MSP forthe Non- Basmati price the industry dynamics will support firmness in the pricing of theBasmati which could enhance our inventory position further.

We also expanded our product portfolio and geographic footprintutilizing our existing delivery model. We strategically diversified into product segmentsthat augment our existing portfolio. We forayed into the premium Non-Basmati Rice variantalong with extending our proposition in the health food segment with the launch of two newnutritionally superior products India Gate Chia Seeds and India Gate Flax Seeds. Backedby our effective communication strategy our health food segment showcased double-digitgrowth in FY21 with strong traction in the international and domestic markets. Further wetook some strategic strides to grow our presence in the Indian unbranded Basmati Ricemarket. As a category captaincy effort to grow the penetration of packaged Basmati Rice inthe broader Basmati Rice segment we tried to positioned our 'Unity' brand as a brand ofchoice for the price conscious customer while ensuring the product quality and consistencythat KRBL is known for. We also diversified into the branded rice oil segment during theyear with the introduction of India Gate Basmola rice bran oil in 500 ml and 1 litrepacks - positioned as India's premium edible health oil globally. These are importantstrategic developments in a number of ways. They diversify our presence across the FMCGvalue chain expand our presence in the higher growth segments and broaden our productportfolio for customers globally.

What these results show is the continuing strength of our strategy andthe importance of our focus on emerging as a resilient organisation in the face ofchallenges. This involves several aspects including our logistics team finding ways toaccommodate rapidly fluctuating demand for products by rethinking delivery systems andschedules. Further by having an absolute focus on serving our customers in their time ofneed by introducing new and innovative ways of working and by thinking creatively wehave strengthened our relationships with our customers this year. These initiatives willfurther encourage a higher share of our branded products in the household basket and ourleadership in premium rice will get further augmented.

SUPPORTING OUR LOCAL COMMUNITIES

We are active members of the communities where we live and where wework. Many of these communities suffered real hardship during the pandemic and so we dideverything we could to support them in their time of need. Just like our focus onachieving business goals during the pandemic our focus was centered around the idea ofproviding basic food to the people in need in the communities where we operate. As a partof this strategy we helped provide 55 million nutritious meals for people in need in ourlocal communities. We donated different COVID related safety kits to the people in needand found new ways to support our communities such as associating with celebrity ChefVikas Khanna to support Mumbai's Dabbawallas who were literally without any earnings owingto lockdown.

KEEPING THE COMMUNICATION GOING

Our focus on serving our customers was a thread that ran througheverything we did during this year. We took pride in knowing that we kept theall-important basic food diet supply chain going whether that was for our retailcustomers or for our institutional clients meeting the increased demand for packagedproducts as people shopped online.

I think we surprised even ourselves with just how ambitious and agilewe could be and nowhere was this more evident than the creative ways we kept connectedwith our customers distributors and retailers. These included the giant strides we hadtaken in FY21 to create a complete end-to- end digital communication strategy for ourdifferent channel partners and by directly communicating with our customers utilisingdifferent digital and social media platforms along with the traditional one. Project Dishais a big step towards achieving this goal wherein we create an open culture to sharelearn and grow together with our different stakeholders. Through Project Disha weemphasised on creating a digital interface between KRBL and its distributors. This islikely to completely transform the way our channel partners and sales team have beeninteracting till now and will strengthen the organization's ability for decision making intoday's fiercely competitive market.

BELIEVING IN OUR PEOPLE

Resilient organizations are those that rebound and prosper even whenfaced by business disruption because they are resistant to the impacts of disruption aswell as adaptive agile and sustainable in the face of disruption. At KRBL we stronglybelieve that it is the spirit of our people and their willingness that makes us resilient.Since the beginning of the pandemic employees across the entire Company have worked hardto uphold a steady flow of products to consumers across the globe. It took a massiveeffort to maintain production to meet the spike in products for the growing domesticconsumption while ensuring product quality in packaging and logistics did a tremendous jobin delivering the products at the convenience of our customers with changed time schedulesand delivery procedures. I would like to take this opportunity to thank each and everymember of KRBL for going that extra mile to ensure that KRBL stands on its commitment.

INGRAINING A HEALTHY FUTURE

As a business entity we are keen to drive growth that is sustainablewhile executing our plans to expand the portfolio and add exciting SKUs that will helpmeet the changing tastes of our customers. A combination of augmented brand line-uphealthy volume along across geographies and superior capital efficiency is expected to aidin the achievement of profitable growth with consistent performance in the foreseeablefuture of the Company.

ROAD AHEAD IN AN UNCERTAIN WORLD

As we continue to wage our war against COVID our focus going forwardwould remain on taking things as and when they come. Yes we had a strong year weatheringthe pandemic and finishing the year in a more robust financial position than when westarted.

But with the recent COVID waves raging havoc we enter into the currentfinancial year being cognizant of the risks that surround us from the possibility of a newwave of infection. Despite the concerns we are confident that the way we overcamechallenges in the past year with well- established business strategy defined processesand risk mitigating measures coupled with agile thinking and swift action we remaincautiously optimistic about handling such situations in the future with confidence andresolving them in the best possible manner. The strategies we undertook during the year togrow our retail business are likely to guide us in FY22 also and our focus on thevalue-added segment and growing our export business is likely to drive business growth inthe years ahead.

As we continue to embrace ourselves in the new normal our focus in theyears ahead would be to align ourselves with the changing trends in the market to keepourselves relevant. Also we would continue to focus on growing our export presence innewer geographies while continuing to strengthen our presence in the existing ones. Beforeclosing I would like to extend my gratitude to our employees for their persistent hardwork and support for their.

I also wish to thank our farmer community distributors supplierspartners bankers customers consumers and all our shareholders for their unwaveringtrust and confidence in us.

Here's wishing you the best of health and prosperity for the yearahead.

Anil Kumar Mittal

Chairman and Managing Director

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