KRBL Limited — Q3 FY26 earnings call

Call held 19 Feb 2026

Management summary

KRBL reported a mixed Q3 FY26, with strong margin expansion and PAT growth driven by lower input costs and improved sales mix, despite a significant decline in export revenue and flat domestic revenue. The company achieved a net cash position and is optimistic about future EBITDA margins. Strategic initiatives include distribution expansion in Tier 2/3 cities and brand investments, while asset monetization plans for Ghaziabad have been deferred due to high relocation costs.

Highlights

  • Gross margin for Q3 FY26 expanded to 30.2% compared to 24.0% in Q3 FY25, driven by lower basmati COGS and higher other income.

  • PAT for Q3 FY26 increased to INR170 crores (11.3% margin) from INR133 crores (7.8% margin) in Q3 FY25, representing a 27.8% YoY growth.

  • Net bank borrowings turned into a negative INR388 crores as of December 31, 2025, indicating a net cash position, improved from INR102 crores last year.

  • Domestic revenue (excluding power) for the 9 months ended FY26 grew 6% YoY to INR3,215 crores, with branded non-basmati growing strongly at 35%.

  • Management expects Q4 FY26 EBITDA to grow by a minimum of 200-250 basis points and FY27 EBITDA margins to remain intact.

Concerns

  • Export revenue for Q3 FY26 declined significantly to INR357 crores from INR563 crores in Q3 FY25, primarily due to restricted bulk export volumes amidst geopolitical tensions.

  • Domestic revenue (excluding power) for Q3 FY26 remained broadly flat year-on-year at INR1,104 crores, impacted by increased competitive intensity from loose and regional players.

  • The monetization of Ghaziabad land has been postponed for 2-3 years due to higher-than-expected costs for shifting the plant (estimated at INR500-600 crores).

  • Retail outlet count diminished from 3.6 lakhs to 3.2 lakhs, attributed to shifts towards quick commerce/modern trade and cessation of co-branding activities.

Key financials

  1. Consolidated Revenue ₹1,476 Cr -2%QoQ
  2. EBITDA ₹250 Cr
  3. PAT ₹170 Cr +27.8%YoY
  4. Gross Margin 30.2%
  5. Export Revenue ₹357 Cr -36.6%YoY
  6. Domestic Revenue (ex-power) ₹1,104 Cr 0%YoY

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.

Segment breakdown

Share of Revenue
₹1,461 Cr Total
  • Domestic (ex-power) ₹1,104 Cr 75.6%
  • Export ₹357 Cr 24.4%

Capital allocation

high confidence
  • Capex ₹100 Cr
    • Packaging plant and increased packaging capacities at Samalkha (Panipat) ₹100 Cr
    It is going to be a packaging plant. Directly, it is whatever manufacturing and there is some packaging. So we'll be doing packaging there at that plant. So, it will increase the packaging capacities of our units. ... I think that investment will be to the tune of around INR100 crores.
  • Debt Net cash ₹388 Cr
    Net bank borrowings, net of treasury investments were at a negative INR388 crores as of December 31, '2025, as against INR102 crores last year. Lower inventory, coupled with higher cash profit generated in the 9-month period resulted in lower net bank debt.
  • Liquidity Cash ₹400 Cr
    As of December 31, 2025, it was around INR400 crores.

Guidance & targets

Profitability

  • EBITDA Margin Improvement Profitability · Q4 FY26 · High confidence 200-250 basis points
    Even I tell you our fourth-quarter EBITDA will definitely grow by minimum 200 to 250 basis points more.

    — Anoop Kumar Gupta

  • EBITDA Margin Profitability · next financial year · High confidence intact
    And for the next financial year, since we are holding stocks for more than 1 year, 1.5 years, for next financial year also looking at the market, our EBITDA is going to be intact.

    — Anoop Kumar Gupta

Volume

  • Export Volume Growth Volume · next financial year · High confidence minimum 15%
    And I believe that next financial year, our exports should jump by minimum 15%. ... Therefore, we expect that minimum 15% rise should be there next year.

    — Anil Kumar Mittal

  • Domestic Market Growth Volume · next financial year · Medium confidence high single digit or early double digit
    I think we are very positive that we can maintain mid-single-digit growth or maybe even early double-digit growth because, as I said, bulk pack business continues to remain strong.

    — Ayush Gupta

What to watch in Q4 FY26

Q4 FY26 EBITDA Margin Improvement

next quarter
Current 16.9% (Q3 FY26)
Target 200-250 bps improvement

Why it matters

Indicates the company's ability to sustain and improve profitability through operational efficiencies and pricing power, crucial for overall financial health.

Even I tell you our fourth-quarter EBITDA will definitely grow by minimum 200 to 250 basis points more.

Risks & concerns

  • Geopolitical tensions impacting Iran exports

    medium

    Company is cautious and has postponed new business in Iran due to ongoing tensions, limiting export opportunities in that market.

    Management acknowledged

  • Increased competitive intensity in domestic basmati market

    medium

    Competition from loose and regional players in general and modern trade channels is putting pressure on demand and margins, leading to flat domestic revenue in Q3 FY26.

    Management acknowledged

  • Downward pressure on demand and margins from lower raw material prices

    medium

    Lower raw material prices have led to increased competition and pressure on pricing, though KRBL maintained volume stability and robust margins by not sacrificing margins for short-term volume gain.

    Management acknowledged

  • Delay in Ghaziabad land monetization

    low

    Monetization of Ghaziabad land postponed for 2-3 years due to higher-than-expected plant transfer costs (INR500-600 crores), delaying potential capital realization.

    Management acknowledged

Q&A highlights

7 direct
Current realizations in domestic and export markets Direct
Talking about the domestic branded business, the Q3 realization was around INR77,500 per ton. And on the export side, like I mentioned, it was about INR1,42,000.

Provides specific price points for the company's products in key markets, indicating pricing power and market positioning.

Asked by Anubhav Mukherjee

Expected gross margin improvement in coming financial year Direct
Even I tell you our fourth-quarter EBITDA will definitely grow by minimum 200 to 250 basis points more. And for the next financial year... our EBITDA is going to be intact.

Management provides clear guidance on short-term and medium-term margin expectations, indicating confidence in profitability despite market dynamics.

Asked by Anubhav Mukherjee

Status of Saudi distribution setup Partial
The Saudi business is progressing well, and we are seeing consistent volume demand with regular shipment taking place. Our current approach of working directly with wholesaler is working effectively in the interim and helping us maintain strong market visibility. We are still evaluating the right long-term distributor structure and have not finalized a distributor yet.

Indicates progress in a key export market but highlights that the long-term strategic structure is still under evaluation, suggesting potential for future changes and strategic decisions.

Asked by Anubhav Mukherjee

Impact of Iran and U.S. tensions on exports Direct
There is still tension going on, and that is why we are quite restrictive in concluding any new business in Iran. So therefore, it will take some time. ... At the moment, we are also very cautious in exporting anything to Iran or getting new orders.

Reveals a direct impact of geopolitical factors on export strategy and new business in a specific market, indicating caution and potential revenue limitations.

Asked by Amit Aggarwal

Total market size for regional rice varieties Direct
So these segments independently are very large. And the market size, if I have to estimate, could be in the range of INR3,000 crores to INR4,000 crores.

Quantifies the significant market opportunity for the company's regional rice portfolio, highlighting growth potential and strategic focus.

Asked by Chirag Singhal

Updates on Ghaziabad land monetization plan Direct
At the moment, we have postponed it because we calculated that the cost of transferring the unit to other place is quite high. So for at least minimum 2 to 3 years, we have postponed the decision. We have delayed the decision.

Clarifies a delay in a significant asset monetization plan due to unforeseen high costs, impacting capital allocation strategy and timeline.

Asked by Chirag Singhal

Decline in retail outlet count Direct
Our retail outlets have kind of diminished in the past 4 to 5 months. And broadly, there are 2 reasons. One is there's a lot of shift of branded basmati business happening from general trade to quick commerce... Second reason is we engaged in certain co-branding activities with other FMCG companies in the past, which had given us an uplift in retail expansion. So because those co-branding activities are now at a hold...

Explains the reasons behind a reduction in physical retail presence, linking it to channel shifts and changes in marketing strategy, which could impact distribution reach.

Asked by Krushi Parekh

Domestic volume growth outlook given competitive pressures Direct
I think we are very positive that we can maintain mid-single-digit growth or maybe even early double-digit growth because, as I said, bulk pack business continues to remain strong. The good thing is e-commerce, quick commerce channel, which is a brand forward channel, is gaining salience for the category, right?

Management expresses confidence in achieving future domestic growth despite current competitive intensity, citing specific growth drivers like bulk pack and e-commerce channels.

Asked by Soumen Choudhury

3 min read 7 chapters

Detailed narrative

Global and Basmati Rice Landscape

Global rice production for 2025-2026 is estimated at mid-540 million metric tons, with consumption broadly aligned, indicating a stable market. India remains the world's largest rice producer, with record high production for 2025-2026. The 2025 basmati harvest in India was adequate in volume but uneven in quality, with some regions experiencing higher moisture content and reduced head rice recovery due to heavy monsoon. Pakistan's Super Basmati traded at a premium of $1,180 to $1,220 per metric ton, reinforcing India's competitive pricing in export markets.

Q3 FY26 Consolidated Performance Overview

KRBL reported consolidated revenue of INR1,476 crores for Q3 FY26. EBITDA stood at INR250 crores, with a margin of 16.9%. PAT for the quarter was INR170 crores, representing an 11.3% margin, a significant increase from INR133 crores (7.8% margin) in Q3 FY25. Gross margin expanded to 30.2% in Q3 FY26 from 24.0% in Q3 FY25, primarily due to lower average basmati cost and higher other income, reflecting strong operational momentum.

Domestic Business Performance and Strategy

Domestic revenue, excluding power, for Q3 FY26 was INR1,104 crores, remaining broadly flat year-on-year. For the 9 months ended December 31, 2025, domestic revenue grew 6% YoY to INR3,215 crores, driven by higher value. Branded basmati sales were flat, while branded non-basmati grew strongly at 35%. The company maintains market leadership with shares of 37.8% in general trade, 39.3% in modern trade, and 41.2% in e-commerce. Strategic pillars include distribution expansion to 3.2 lakh retail outlets, supply chain remodelling, brand investment (e.g., Mr. Bachchan campaign), and new product categories under the Uplife brand.

Export Performance and Geopolitical Factors

Export revenue for Q3 FY26 was INR357 crores, a significant decline from INR563 crores in Q3 FY25, mainly due to restricted bulk export volumes caused by geopolitical tensions. However, for the 9 months ended, export revenue increased 21% YoY to INR1,276 crores. The company noted that the U.S.-India trade understanding provides clarity with an 18% import duty on Indian rice. Geopolitical tensions, particularly with Iran, have led to a cautious approach, with new business in Iran being restricted.

Capital Allocation and Asset Monetization

The company has postponed the monetization of its Ghaziabad land for 2-3 years, as the cost of transferring the plant to another site is estimated to be INR500-600 crores, significantly higher than initial estimates. Instead, KRBL plans to invest around INR100 crores in a packaging plant at Samalkha, Panipat, to increase packaging capacities. The company is evaluating opportunities to monetize a portion of its 125-acre land parcel in Samalkha while retaining 50-60 acres for future expansion of its Barota operations.

Inventory and Debt Position

Total inventory as of December 31, 2025, stood at INR3,941 crores, including INR1,322 crores in paddy and INR2,450 crores in rice. On a volume basis, paddy inventory was 3,58,000 tons and rice inventory was 4,11,000 tons. Net bank borrowings, net of treasury investments, turned into a negative INR388 crores as of December 31, 2025, compared to INR102 crores last year, reflecting a strong net cash position. The company's cash on the balance sheet as of December 31, 2025, was approximately INR400 crores.

Outlook and Growth Drivers

Management expects Q4 FY26 EBITDA to improve by 200-250 basis points and anticipates EBITDA margins to remain intact for the next financial year. Export volumes are projected to grow by a minimum of 15% in the next financial year. In the domestic market, the company aims for high single-digit to early double-digit growth, driven by strong bulk pack business and increasing salience of e-commerce and quick commerce channels. The regional rice market for the company's three main varieties is estimated to be INR3,000-4,000 crores, offering significant growth potential.

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