India Gate basmati rice maker KRBL looks to hike prices by March
World's largest rice miller KRBL Limited faced input cost challenges in quarter three but is optimistic about its future performance especially with the festive season ahead. The company says it has taken necessary steps to address the increase in opex and input costs, and is confident that its realizations will continue to improve on a year-on-year basis.
KRBL Limited, a leading agri-based company, recently announced its financial update for the third quarter of the fiscal year 2022 in which reported strong growth in both domestic and export revenue. However, on a sequential basis, its gross margin was impacted due to change in product mix.
Ashish Jain, the Chief Financial Officer (CFO) of KRBL, on Monday told CNBC-TV18 that the rice processing and exporting company didn't implement any price increase in the October to December quarter, it plans to take a price hike in the fourth quarter.
“We are seeing strong volume growth both in the domestic as well as export markets,” he highlighted and said that from a export market perspective, prices have gone up and it expects the trend to hold up for at least the next quarter or so.
This, Jain said, was due to the increase in operating expenses (opex) that has impacted the company's financial performance in the December 2022 ended quarter.
Despite the increase in opex, the company recorded a growth of 17 percent in its industry export volume from April to December 2022. Jain also noted that the company has seen an improvement in its realisations on a year-on-year (YoY) basis.
Compared to the previous quarter, the third quarter saw a smaller share of exports. However, Jain stated that the firm is hoping to see higher exports orders in quarter four due to the festive season.
“We see the export side continuing to be strong and therefore we will definitely see exports far better than what we saw last year,” he said.
The company also faced the challenging of rise in input costs on a sequential basis, which affected its performance in the third quarter. “We expect continued levels of input prices in quarter four as well. So margins in quarter four will be similar to quarter three,” Jain said.
To cater to the expected demand in quarter four, the company has built-up its inventories. Jain believes that the company is well-positioned to meet the increased demand during the festive season and deliver strong financial results in quarter four.
Also Read | KRBL Limited bags ‘Climate Positive Award 2022’
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