KRBL Aims For Double-Digit Ebitda Margin In FY26

KRBL Ltd. aims to replicate the high Ebitda margin it saw in Q4 FY25 in the current financial year, according to Chief Financial Officer Ashish Jain. 

In the fourth quarter of FY25, the parent company of India Gate basmati rice brand reported an Ebitda margin of 16.2%, compared to 14.1% in the year-ago period.

"If you look at our Q4, the margin profile improved and that's the level that we are hoping to achieve in FY26, primarily for two reasons," he told NDTV Profit in a conversation on Monday.

"One is that we are hoping to see better export numbers. Exports, typically branded exports, tend to be of higher margin as compared to the domestic market. Similarly, our inventory cost should also rationalise itself, as the share of the recent crop which we purchased increases," Jain said.

Overall, he has a "neutral to positive" outlook for exports in FY26. The export business has two segments: branded rice and bulk export. 

"On the branded rice exports, you would have seen in the last quarter as well as last year, the performance is far better than the preceding year. On the bulk export side, it tends to be affected by geopolitical risks.

"Recent news items, including the Israel-Iran conflict, are something that we are watching closely. So, overall, neutral to positive outlook for exports for FY26," he said.

Historically, KRBL's revenue has been split evenly between domestic and export sales. However, recent challenges, including distribution issues in Saudi Arabia, have caused the mix to skew towards the domestic market. 

Jain underlined the company's long-term goal to restore the 50-50 balance. He cited India's dominant position as the producer of 85% of the world's basmati as a fundamental strength.

The company is now actively working to formalise its distribution network in Saudi Arabia and fix the problems in FY26. He added that a more systematic distribution arrangement is crucial to realising the market's "full potential".

The top executive also discussed the company’s inventory strategy.

Rice as a grain improves with age. Rice is a seasonal produce in India. So, 95% of rice production in India, at least as far as basmati is concerned, is harvested in Kharif, which is from October to December, he said. "Which is why you see higher inventory and then as we approach, as the year goes on, the inventory levels fall."

The combination of aged rice, which is a "superior product" with strong branding, allows the company to command higher prices and absorb price fluctuations in the commodity rice market, the top executive said. 

In addition to its core rice business, KRBL is venturing into new segments, notably healthy edible oils.

Leveraging its India Gate brand and rice bran oil production capabilities, the company recently launched a range of edible oils. While still in its early stages, Jain projected that the edible oil business could contribute Rs 200–300 crore in revenue within two to three years. He described the initial market response as "strong".