KRBL Limited — Q1 FY26 earnings call

Call held 16 Sep 2025

Management summary

This investor conference call for KRBL primarily addressed the resignation of an Independent Director and the concerns raised. Management clarified that the concerns were related to Board processes, not financial or legal compliance gaps. The call detailed a significant export receivable write-off of INR 58 crores in FY25, outlined CSR spending, and discussed a proposed change in the object clause for real estate ventures. The company committed to an independent review of the director's observations and to filling the board vacancy promptly.

Highlights

  • Management acted swiftly to address concerns by convening board meetings and planning an independent review.

  • Company asserts compliance with all stipulated laws and regulations, with no apparent lapses in financial or legal matters.

  • Board has confidence and support of all members, including other Independent Directors.

  • Initiated a recovery plan for the written-off export receivables, including arbitration and appointing a collection fund.

  • CSR spendings are in line with applicable rules and regulations, with proper due diligence for implementing agencies.

Concerns

  • Resignation of an Independent Director citing 'certain concerns' focused on Board processes, leading to reputational scrutiny.

  • Significant export receivable write-off of INR 58 crores in FY25 due to an untraceable and 'notorious' counterparty.

  • Delay in reporting the Independent Director's resignation to stock exchanges (8th to 13th September 2025).

  • Dissent recorded by one director regarding the land monetization and real estate projects proposal.

Key financials

3 periods

Headline

  • Total CSR Spend (Past 3 years)
    ₹40 Cr
  • Unspent CSR Balance
    ₹37 Cr

FY24

  • Expected Credit Loss Provision
    ₹18 Cr

FY25

  • Export Receivable Write-off
    ₹58 Cr

What they filed

Q1 FY27: revenue down 5.6%, net profit up 72.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,270 1,682 1,442 1,584 1,511 +19%1,477 −12%1,526 +6%1,496 −6%
EBITDA123 195 224 193 226 +84%229 +17%229 +2%308 +60%
Net profit103 133 154 151 172 +67%170 +28%155 +1%261 +73%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Governance

  • Independent third-party review report submission Governance · within 30 days from Sep 16, 2025 · High confidence within 30 days
    An independent reputed third party firm be appointed to conduct a thorough review of the observations as soon as possible but not later than 30 days and present the report to the respective board committees.

    — Anil Kumar Mittal, Chairman and Managing Director

Board Composition

  • Appointment of new Independent Director Board Composition · within 3 months from Sep 16, 2025 · Medium confidence within 3 months
    We are already on the lookout for the replacement of Mr. Anil Kumar Chaudhary. Since we have three months' time, we will try to fill this gap as early as possible.

    — Anil Kumar Mittal, Chairman and Managing Director

What to watch in Q2 FY26

Submission of independent third-party review report

within 30 days
Current Firm to be appointed
Target Report submitted to Board committees

Why it matters

This report will provide an independent assessment of the concerns raised by the resigning director, crucial for governance and transparency.

An independent reputed third party firm be appointed to conduct a thorough review of the observations as soon as possible but not later than 30 days and present the report to the respective board committees.

Risks & concerns

  • Reputational damage and governance concerns due to Independent Director's resignation

    medium

    Independent Director resigned citing 'certain concerns' about Board processes, though management states no financial/legal compliance gaps.

    Both downplayed

  • Financial loss from significant export receivable write-off

    medium

    INR 58 crores written off in FY25 due to an untraceable counterparty, though a recovery plan is being finalized.

    Management acknowledged

  • Perception of non-compliance due to delay in reporting resignation

    low

    Delay of 5 days in reporting the Independent Director's resignation to exchanges, explained by management as a reaction to shock.

    Analyst acknowledged

  • Internal dissent regarding new business proposals

    low

    One director recorded dissent on the land monetization and real estate projects proposal, though it was approved by majority.

    Management acknowledged

Q&A highlights

4 direct, 2 evasive
Independent Director's resignation and board composition Direct
We are already on the lookout for the replacement of Mr. Anil Kumar Chaudhary. Since we have three months' time, we will try to fill this gap as early as possible.

Addresses the immediate action plan for the board vacancy and the current board structure (3 ID, 4 family members).

Asked by Hitesh Goel, Aurigin Capital

Export receivable write-off status Direct
there is no other outstanding as of now export receivable issue right now in the company except for this, which has been provisioned in FY '2025.

Confirms that the INR 58 crore write-off is the only significant outstanding export receivable issue and has been accounted for.

Asked by Hitesh Goel, Aurigin Capital

Independent Director's concerns and timing Evasive
Mr. Anil Kumar Chaudhary had never ever raised any issues before the Board or within the Committee. If at all any issues were raised by him, they were articulated and settled then and there. But if a person has decided or if he was cooking up some stories within himself, that cannot be answered.

Management expresses surprise and suggests the director's concerns were not previously raised, implying they might be unfounded or personal.

Asked by Mohit Saini, Way2Wealth Securities

History with the counterparty for the written-off receivable Direct
We used to deal with this party way back in 1995 till 2005. After 2005, we stopped doing business with them. All of a sudden, in 2022-23 he requested us for shipment... that man who is notorious and had some ulterior motive had played a dirty game with us.

Provides context on the nature of the counterparty and the circumstances leading to the bad debt, indicating it was a re-engagement with a problematic entity.

Asked by Jatin Chawla, RTL Investments

Type of independent audit expert to be appointed Direct
We are looking for a reputable firm who has the necessary skill. So typically, we are either looking for big four or a firm of that stature or a reputed legal firm.

Clarifies the company's intention to engage a high-caliber firm to review the director's observations, aiming for credibility.

Asked by Jatin Chawla, RTL Investments

Delay in reporting Independent Director's resignation Partial
When we received the letter from Mr. Anil Chaudhary, the whole management was under shock since we couldn't dream that he would react in this manner. We could never imagine that he would become so hostile without any reason... We remained puzzled for 3 - 4 days and that was the reason for the delay in reporting the matter.

Management explains the delay as a reaction to the unexpected and hostile nature of the resignation, rather than an intentional lapse.

Asked by Niteen S Dharmawat, Aurum Capital

Contemplating legal action against the Independent Director Evasive
It would not be appropriate on my part to pass any comment now. We are a part of the Board and we are awaiting the legal report from the independent auditors. Until then we will not be able to answer in a transparent manner.

Management defers comment on potential legal action, indicating a cautious approach pending the independent audit report.

Asked by Niteen S Dharmawat, Aurum Capital

3 min read 6 chapters

Detailed narrative

Independent Director Resignation & Company's Response

Mr. Anil Kumar Chaudhary resigned as an Independent Director effective September 8, 2025, citing concerns focused on Board processes rather than financial or legal compliance. The company expressed shock at his resignation and the nature of his observations, stating that no such issues were raised previously. In response, KRBL has committed to appointing an independent, reputed third-party firm, potentially a Big Four or similar legal firm, to conduct a thorough review of the observations within 30 days. The Board committees will then deliberate on this report and submit recommendations.

Export Receivable Write-off Details

KRBL reported a write-off of approximately INR 58 crores in FY25 related to export receivables from financial year 2023 shipments to an African customer. This stemmed from a contract to sell 23,000 metric tons of non-Basmati rice for about INR 79 crores. After an initial payment of INR 17 crores, the remaining INR 62 crores became due by August 2023. Despite receiving an additional INR 6 crores across FY24-25, the balance of INR 58 crores was written off in FY25 due to the counterparty being untraceable. The company had made an expected credit loss provision of INR 18 crores in FY24, with the remainder in FY25, and is now finalizing a recovery plan including arbitration.

CSR Funds Utilization and Unspent Balance

Over the past three years, including the current year, KRBL has spent approximately INR 40 crores on Corporate Social Responsibility (CSR) initiatives. As of the call date, the company has an unspent CSR balance of INR 37 crores, which includes the current year's obligation. Management stated that CSR spendings adhere to applicable rules and regulations, with an annual operating plan approved and funds utilized in a phased manner for ongoing projects, ensuring careful evaluation and proper due diligence for implementing agencies.

Proposed Object Clause Change for Real Estate

The company discussed a proposal to change its Memorandum of Association's object clause to include land monetization and real estate projects. This move is intended to unlock shareholder value and utilize available funds more competently. While one director recorded dissent, the resolution was approved by a majority in the audit committee and the board. This proposal is now slated for shareholder approval at the upcoming meeting, with detailed plans to be disclosed in due course.

Board Composition and Compensation Policy

Currently, KRBL's board comprises three Independent Directors and four members related to the promoter family. Management confirmed they are actively seeking a replacement for the resigned Independent Director and aim to fill this gap within three months. Regarding compensation, the company stated that variable pay and annual increments for its eight persons holding office or place of profit (four Executive Directors and four key vertical heads) are recommended by the NRC and approved by the Board, adhering to shareholder-approved limits and considering performance, industry benchmarking, and responsibility.

Delay in Reporting Resignation

The resignation of the Independent Director, effective September 8, 2025, was reported to the stock exchanges on September 13, 2025, leading to questions about the delay. Management explained that they were in 'shock' and 'puzzled for 3-4 days' upon receiving the letter, which they described as unexpectedly 'hostile'. This emotional reaction was cited as the reason for the delay in reporting the matter, which they believe was within statutory timelines.

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