Khushi Ram & Behari Lal (KRBL)

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2 Khushi Ram & Behari Lal (KRBL)

3 History

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5 The world s most precious rice strain BASMATI Grown only once a year in the Indo-Gangetic Plain beneath the Himalayan sub ranges. The fertile alluvial soil, fresh and cold air and the sweet water from the ranges contribute primarily to the unique characteristics associated with the grain. The Basmati is longer, lighter and fluffier than standard white rice, and does not stick together. Basmati also is geographically indexed. Basmati growing areas are Uttrakhand, Punjab, Haryana, Uttar Pradesh, adjoining areas of Jammu, Kashmir, Himachal Pradesh and Delhi. Quite like Wine & Scotch, it gets better with age. Under good conditions it keeps well for up to 10 years. Old rice cooks up fluffy, with separate grains and releases a pleasant aroma. The consumption is typically based on recipe, eating habits, health needs and cultural geographical usage.

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7 Businesses of The Company 01 Agri Division It is core business of the Company 02 Energy Division Diversified Business of the Company

8 Agri Business With a 129 year heritage and an existence since 1889, KRBL Ltd. is India s first integrated rice company with a comprehensive product chain. Under this segment, the company is doing the business of basmati rice and value-added products. KRBL still lead the industry ranking in terms of Basmati Rice production and trade, both within and outside the country. Largest in the world

9 Agri Business Agri Business Consumer pack segment Bulk packaging segment Super premium segment Distribution Channels Traditional Modern E- Commerce

10 Consumer Pack Segment Agri Business Segment The Company sub-segments its consumer pack segment into India Gate brand and other brands which include Bemisal, NurJahan and Doon. Sales in increased by 28.66% in volume terms and by 25.55% in value terms. This premium segment was created with the rationale of capturing market share from the huge unbranded Basmati Rice Market Bulk Packaging Segment The Company s two key brands in the segment i.e, Unity and India Gate Sales grew by 26.9% in volume terms and by 43% in value terms In The segment caters to the requirements of institutional buyers such as hotels, restaurants and caterers.(institutional buyers include Star Group of Hotels, The Leela and ITC Hotels.) Super Premium Segment This is a new segment created by the Company for building consumer perception. This category comprises KRBL s most premium and healthoriented products. Sales volume from this category grew by 19.36%, while in value terms it grew by 10.48%. (target to grow this segment by 35% in value term.) Products newly launched or re-launched within this category include: India Gate Quinoa, Brown Basmati Rice, Brown Rice.

11 Distribution Channels Modern Trade Modern trade distribution channel, the Company has enhanced its presence to 6,500 stores. Initiatives undertaken by the Company towards retail activation and dominating shelf-space, has resulted in improved same-store sales and category share. The Company s strong business development team undertakes significant research and analysis to identify the right city, right catchment area and right store. E-commerce Viewing the huge scope of opportunity from the online distribution network, the Company has focussed on strengthening its e-commerce channel. The Company tied-up with major players like Big Basket, Grofers, Amazon, Shopfilo, JBL, and Flipkart among others.

12 How Company Run The Business Contact Farming Procurement Ageing & Storing 06 Seed Development Milling 01 Research & Development Quality Control 07

13 Rice bran Oil Value-added Product Burning Husk Paddy Husk Cattle Feed

14 Other Products under Agri Segment The company's organic basmati rice farming had initiated in 2004 with 23 basmati rice growers in the fertile Ganges river belt. Presently, the company's organic project is spread in an area of about 5000 Acres with dedicated 800 farmer families. A team of more than 65 members in Agri division is dedicated to the task of providing proper extension services to the farmers. The company anticipates expanding the organic basmati operations to the tune of 10,000 acres within a period of 5 years. Organic Basmati Rice Sesame Seed Pulses Seed

15 Product Portfolio

16 Market Share

17 Energy Division This division has not only helped the Company in becoming self-sufficient for power requirements, but it has also opened up a new revenue stream. KRBL strengthened its green energy portfolio to MW in from MW last year. Long-term power purchase agreement for 13 & 20 Years with MSEB, AVVNL, TEB.

18 Plant Location

19 Anil Kumar Mittal Management The visionary behind the success of the company, Mr. Mittal is the Founder Chairman of KRBL Limited. He has been instrumental, in turning the company into a global brand and the leader in the Indian Basmati industry. He was the President of the All India Rice Exporters Association and the Vice President of the Basmati Rice Farmers & Exporters Development Forum. He has been a Board Member of the Export Inspection Council as well as Basmati Development Fund. Arun Kumar Gupta An expert on the Basmati paddy supply chain management and the paddy milling technology, Mr. Gupta has steered the company into a growth trajectory. He holds various eminent positions in various reputed organizations, one of them being an Executive Member of the Basmati Rice Farmers & Exporters Development Forum.

20 Management Anup Kumar Gupta The financial architect and the chief strategist of the company, Mr. Gupta has added immense value to the company s financial stability. He has been the Executive Committee Member of All India Rice Exporters Association. He is currently, the Chief Mentor of Basmati Rice Farmers & Exporters Development Forum.

21 MF/DII/Banks, 0.12% Share Holding Pattern Indian Public / Others, 28.95% Promoters 58.81% FII/FPI/FDI, 12.11%

22 Farming around Industry The year 2016 turned out to be a record year for paddy production post two years of poor outcome which was marked with El Niño weather anomaly. India is the second largest producer and largest exporter of rice. The key Basmati Rice producing states in India includes Jammu and Kashmir, Punjab, Haryana, Uttarakhand, and western Uttar Pradesh. In , the Basmati Rice production is likely to decline by over 18% from 9.8 MMT in to 8 MMT driven by a sharp decline in acreage. Haryana and Punjab are likely to account for nearly 40-45% production followed by Uttar Pradesh at 10-15%.

23 Middle East is the world s largest Basmati Rice Market. Export of Basmati Saudi Arabia imported the largest quantity of Basmati rice from India in FY17 followed by Iran, UAE & Iraq. Basmati Rice is exported to 156 countries out of which KRBL exports to 75 countries and is the market leader in the important Basmati consuming markets in the branded segment The overall shipment of rice from the country increased by 3.94% from MMT in to MMT in

24 Value Realization

25 Industry Players

26 Risks Rice, being an agricultural commodity, is prone to plant diseases that can damage the crop. Low rainfall and improper climatic conditions can adversely impact rice plantations Fluctuations in the market prices of paddy can lead to inventory losses Declining economies of major importing countries and currency fluctuations adversely impacts international/export business Economic Risk Raw Material Risk Foreign Exchange Risk Regulatory Risk Premiumness and Quality Risk Competition Risk Cost Risk Product Concentration Risk

27 Opportunities The Company s strong in-house R&D capability facilitates it to consistently drive quality and operational excellence across its business segments. Being the largest manufacturer of Basmati Rice seed, KRBL has the capacity to handle 20% of India s total Basmati production. Integrated Value Chain & R&D Capabilities Strong Farmer Relations & Dealer Network Evolving Lifestyles and Consumer Preferences Global Market Expansion and Increased Consumption Changing Quality Consciousness and Consumer Perception

28 Financial

29 Profit & Loss Statement Particulars CAGR Total Sales % EBITDA % EBIT % PBT % PAT %

30 Profit & Loss Statement Margin In (%) Particulars EBITDA EBIT PBT PAT

31 Other Financial Data Particulars P/E ROE(%) ROCE(%) Current Ratio Quick Ratio D/E Debtors Days Inventory Days Creditors Days

32 Peer Data Company Price Market Cap (in cr.) P/E P/B D/E ROE ROCE KRBL , % 21.44% LT Food % 15.40% Kohinoor Basmati Chamanlal Setia Source : Screener (as on 27 th April, 2018) % 37.73%

33 Investment Rationale Huge entry barriers for new entrants Strong demand in the Middle East Iran may resume purchases of Basmati rice Opening up of Chinese markets for basmati Rising disposable income leading to shift towards premiumisation Investment Rationale (other than industry triggers) Strong market share in Middle East countries Higher realization than industry average Diversification in Renewable energy/ Captive power Integrated operations resulting in minimum wastage In house R&D facilities

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