KRBL Limited: Strong Q2 FY26 Performance Driven by Exports and Strategic Diversification

KRBL Limited, a global leader in the basmati rice industry, has reported a robust financial performance for the second quarter and first half of fiscal year 2026 (Q2 & H1 FY26). The company's consolidated total income for Q2 FY26 reached INR 1,541 crore, marking an impressive 18% year-on-year (YoY) growth. This strong top-line expansion was complemented by significant profitability improvements, with Profit After Tax (PAT) soaring by 68% YoY to INR 172 crore. The results underscore KRBL's resilient operating foundation, disciplined procurement strategies, and the growing traction of its branded portfolio in key international markets.

The company's revenue performance was primarily driven by its export segment, which witnessed a remarkable 74% YoY growth in Q2 FY26, contributing INR 438 crore. This surge was attributed to strong overseas demand from the Middle East, Europe, and Africa, along with growth in both private label and branded businesses. Domestically, KRBL's revenue, excluding power, grew by a healthy 6% to INR 1,039 crore, reflecting sustained demand for its premium basmati rice products. The power segment contributed INR 34 crore to the Q2 revenue. For the first half of FY26, total income stood at INR 3,155 crore, a 25% increase YoY, with export revenue growing by 86% and domestic revenue by 10%.

Financial Highlights: A Snapshot of Performance

Profitability metrics also showed significant improvement. The gross margin for Q2 FY26 expanded to 29.2% from 23.7% in Q2 FY25, largely benefiting from lower average basmati Cost of Goods Sold (COGS), which decreased by 11% YoY. EBITDA margin for the quarter stood at 16.6% compared to 12.1% in the prior year, despite higher proportionate employee costs and other expenses. The PAT margin also improved to 11.2% from 7.9% in Q2 FY25. For H1 FY26, gross profit stood at 27.3%, EBITDA at 15.3%, and PAT at 10.2%, primarily driven by lower input costs.

Strategic Initiatives and Diversification for Future Growth

KRBL is actively pursuing several strategic initiatives to sustain its growth trajectory and enhance shareholder value. A significant development is the company's planned entry into the real estate sector. KRBL was declared a successful bidder for approximately 125 acres of land in Samalkha, Panipat, for INR 403 crore. This move is aimed at deploying surplus funds more effectively, moving away from low-yield treasury instruments, and leveraging underutilized bank limits for better returns. The company also plans to monetize its approximately 110-acre Ghaziabad parcel, currently valued at INR 2,500 crore, with a potential to reach INR 4,000 crore post-development and relocation of its existing plant over the next 2-3 years.

Another key initiative is 'Project Akshat', an 18-24 month commercial transformation program designed to build a stronger, sharper, and more productive commercial engine for the next decade. This project focuses on improving market share in general trade and e-commerce by 500 basis points, enhancing e-commerce economics with a 15-20% improvement in Return on Advertising Spend (ROAS), and strengthening on-ground capabilities. The company is also remodeling its supply chain, launching 16 Carrying & Forwarding (C&Fs) agents and 8 Super Stockists (SS) to ensure wider and deeper supply, optimize costs, and improve serviceability.

Expanding Product Portfolio and Brand Investment

KRBL continues to invest heavily in its flagship 'India Gate' brand, which remains the world's number one basmati rice brand. A recent pan-India multi-media campaign featuring Amitabh Bachchan for India Gate Classic, themed 'Giving TIME to our loved ones', has significantly boosted consumer confidence, brand search, and repeat purchases. The campaign achieved GRPs of 2472 and a reach of over 15 million, reinforcing the brand's premium positioning.

In line with its diversification strategy, KRBL is expanding its product portfolio beyond basmati rice. The 'Uplife' brand, focusing on health and wellness, continues to make steady progress with products like edible oil, quinoa, chia seeds, and flax seeds, achieving a 5.5% market share in stores where available. The company aims for Uplife to become an INR 200-300 crore category in the next few years. Additionally, KRBL has ventured into the spices segment, launching Biryani Masala in three variants (Hyderabadi, Lucknowi, Kolkata) and other masalas for Mughlai cooking, with plans for future export.

Key Financial Metrics

Outlook and Management Commentary

Management remains optimistic about FY26, expecting continued improvement in gross margins. The domestic business is targeted to achieve a 10% average growth rate for the year. In the export market, KRBL aims to reach approximately 1.5 lakh tonnes of volume in Saudi Arabia within the next 3-4 years and expects its non-basmati business to achieve INR 500 crore turnover in 2-3 years. While acknowledging challenges like US tariffs on Indian rice exports and localized crop quality issues, the company's limited direct exposure to the US market and disciplined procurement strategy are expected to mitigate risks. KRBL's strong credit ratings and robust cash flow position provide a solid foundation for its strategic growth and diversification initiatives, reinforcing investor confidence in its long-term value creation.