© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Q1 FY '19 Results Call of KRBL Limited hosted by Emkay Global Financial Services. We have with us today Mr. Anil Mittal, CMD; Mr. Anoop Gupta, Joint Managing Director; and Mr. Rakesh Mehrotra, CFO. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Rohit Sinha from Emkay Global. Thank you, and over to you, sir.
Good afternoon, everyone. I would like to welcome the management and thank them for giving us this opportunity to host a con call. I would now hand over the call to the management for the opening remarks. Over to you, gentlemen.
Good afternoon, and very warm welcome to all participants. I'm sure you must have had an opportunity to see our results. I would now take you through the results for the quarter ended 30th June, 2018. Company earned a total revenue of INR 744.44crores in the current quarter against INR 878.90 crores in the same quarter last year. Revenue during the quarter has been down by 15% as the segment was INR 200 crores [ relying ] at the port and shipped in July 2018. Due to [ branded ] strength, lower cost of materials in June, higher price realization both in export and domestic and other cost control efficiencies, we achieved the EBITDA margin of 24.62% as compared to 23.91% in the same period last year. EBITDA margin increased by 71 basis points. We earned EBITDA of INR 183.25 crores in this quarter. We made a PBT margin of 20.05% at INR 149.26 crores during the quarter as compared to PBT margin of 18.75% at INR 164.79 crores in the same quarter -- same period last year. PBT margin increased by 130 basis points. PAT margin also improved by 62 basis points from 12.82% in June 2017 to 13.44% in June 2018 quarter. And we earned a profit as compared to INR 109 crores in the last year. We earned a profit of INR 100 crores total. Now I will hand -- I would request our CMD, Mr. Anil Mittal, to take you through industry development. Thank you.
Good afternoon to everybody. Due to good monsoon and with the increase of [ MSP ], there have been a little upside in the market and the crop prospects have also increased as well as the new crop is concerned. The swing has been very good, but it is too early to mention that what would be the outcome of the crop. The real position would mature somewhere around 20th of August -- somewhere near -- around 20th of August. At the moment, the prices are stable. They are ranging between the price of around INR 66, INR 67 for [ indiscernible ] INR 74, INR 75 for white rice at the moment. Any questions, I will be more happy to answer them. This is the market scenario.
[Operator Instructions] We'll take the first question from the line of Punit Mittal from Global Core Capital.
One question. I think there's a lot of noise in the market regarding the Iran market. As far as I understand, KRBL is not heavily dependent on the Iran market. So some clarity around there, your thoughts around there would be very helpful.
Let me tell you, as far as Iran is concerned, there was a notification from the rice importers of Iran that from 22nd of July, the Iran -- Iran will ban import of basmati rice or any type of rice from the market. But as far as government is concerned, about 3 days back only we got a clarification from our embassy from Iran that there is no such notification aside from the government of Iran banning rice from 22nd of July. But yes, because of the sanctions of the Trump administration, there are little bit rumors that after any payment, which is to be received after 5th or 7th of August might be problematic. But still, that has not been confirmed from -- by the bank. Therefore, to [ save it ] authentication, anything about Iran is difficult because of the mail which we received about 3 days back from our embassy officially denying that there is no notification or instruction from the government of Iran to ban import of rice into Iran after 22nd of July, and still, the bankers are not confirming the effect of Trump's administration of sanctioning that how the payments will be affected forthwith. So therefore, as far as Iran is concerned, shipments are going as regularly, but they have slowed down definitely because people have one doubt in the mind that if the payments are [ received ] after the 5th of August, what would be the fate of the payment. That is the Iran position.
So in that context, what do you think will be the impact on KRBL in terms of our overall export this year? How much percentage impact do you think that will have?
Let me tell you, we have been discussing for the last 15 days. [indiscernible] [ has dispatched ] over to Iran, also has spoken to various other competitors, also to our government, also to Ministry of Commerce also. If we look at Iran, every year in the month of August, September, there is a ban. Because for 2 months, that ban remains because they have to save the interest of their own farmer. Because same in September, they're also crop comes. So September, October, are the 2 months where normally it is seen there are no exposed to Iran. That's number one. Number two, there are 2 items which cannot be stopped for export. One is essential commodities like rice, and other commodities, and that is the medical and emergency, medical. Whenever there has been sanctions on Iran, these 2 commodities, food, in particular rice, and other is the medicine, they have an alternative arrangement. Thereby, Iran cannot stop it. And let me tell you about Iran one thing more. Their total consumption of rice is 3.2 million tonnes. They used to grow 2 million tonnes, 1.2 million used to be the import. Now because optimization and their own problem, this year, they're depreciated around 1.5 million tonnes. So the country cannot wait for sanctions. There has to be some concession and [ election ] As food is concerned.
Okay, that's very helpful. But just in case, how much is -- what's the [ painting ] of our total exposure to Iran, net the average [ indiscernible].
That is what -- actually our exposure to Iran, if you take last 5 years export, it's just 4% to 5%. So KRBL exposure to Iran is not much if you look at the previous 5 years.
Okay, understood. Just one more question. I remember you mentioned in the previous call that the cash on the balance sheet will be waiting or you're looking for an acquisition. What is your status on that, and if there's any progress? And if not...
Looking for what?
Acquisition.
Acquisition, we said -- no, we're still -- it is in the progress. It has not finalized anything.
Okay, okay. So you do not have any plans for the cash right now. You'll wait until something is finalized?
Yes, yes, yes. That's right.
We'll take the next question from the line of [ Ayish Mattel ] from [indiscernible] Capital.
So in continuation to the previous participant's question, there was some articles about payment issues from Iran also. Is that true or that worry is not there?
No, no. There was an issue. That issue was belonging to one particular private trade. His name was [ Mosin ]. He has -- definitely, there is a problem with this payment. There's a huge payment of about 10 or 12 or maybe 15 different exporters still hold up in Iran. And our association and the government is trying to help us out to take out that payment from that private source. Otherwise, things are working normal. Payments are coming, goods are going. It's only one party, which has got a very big chunk of money and this is not known to affect these at how much is left over or what is there. About 4 months back or 3 months back, that amount was around INR 700 crores to INR 800 crores, let me tell you.
We are -- KRBL has no exposure to that?
No. We have no exposure at all. We do under letter of credit, we do a fair business. But let me tell you, in the last 20 years, there has not been a single bad debt as far as export or domestic is concerned.
Sure. And sir, about exposure to euro. There were some articles that Europe has tightened the pesticide -- the import duty with pesticide issue. Anything on that? Any comments on that?
No, no. That is a problematic area for the whole country. They used to export -- when I say we [ indiscernible ] the country, I'm not talking of the current figures. We used to import around 350,000, 325,000 tonnes of rice, out of which 50,000 used to be a traditional variety of basmati rice and 275,000 used to be pusa basmati rice. Now there is a problem that there is a fungicide known as tricyclazole. And that -- they have reduced it from 0.001 to 0.0001. That means they have reduced it by 100 times, that tricyclazole. For that reason, since January up to now, the expose to Europe of pusa is hardly 25,000, 30,000 tonnes. And thus there is a setback to pusa basmati rice exposed to Europe. There is a concern. And due to that concern, this year, we -- at the association level, we have done a lot of hard work educating the farmer not to use certain pesticide which can create this problem of tricyclazole. So we have been sanctioned by [ EBITDA ] total revenue of INR 2 crores, plus the private traded also spending from their pocket. I hope this year, this tricyclazole issue in the coming season, we should get rid of it by at least 50%. I cannot say 100%, but by 50%. But this year, yes, I agreed, there is hardly any export. For example, last year, we exported about 30,000, 25,000 tonnes of brown rice to Europe. And this year, it is hardly 500 tonnes only in this year. So we have lost that 25,000. But instead of 25,000, we have done at least an export of 10,000 to 12,000 tonnes of traditional basmati. So we have net quantum loss of about 10,000 to 12,000 tonnes.
And this is for which period?
From January up to now. We are talking of January up to now.
Okay, got it. Yes. Okay. And there was also announcement of [indiscernible] China market being opened up [ behind the European qualified ]. Any number that you want to share on that? How big is this opportunity and what kind of numbers are you looking at?
Let me tell you, China is still a unpredictable country. Both the ministry and the [ PM ] itself are really working very hard and are now starting both basmati rice as well as non-basmati rice. As far as basmati rice, they've already cleared about 12 rice mills from India, out of which KRBL is one of them. And there is a delegation, it was supposed to leave on 31st of July. It has now been postponed for 10th or 15th of August. Previously, it was -- the delegation was to go along with the PM. That delegation but now certain changes are being made. But definitely within August, by -- before 15th of August, a delegation is going and we are hopeful that some business of basmati rice might be concluded there. This is the Chinese position.
And some comments on the price change of the basmati rice like -- over last few months, we have seen the prices go up. What is the status now and going forward?
In basmati rice, there are 3, 4 varieties, but I'm talking of the variety, which is majority that is [ part boiled ] about [ one to one. ] Because all are reflected to that, the prices in the billing started with INR 58, INR 59. They shot up, up to INR 73, INR 74. To date, they are at INR 65, INR 66, recently about 15 days back. They went as high as up to INR 68. Now they have stabilized around INR 65, INR 66. That is the pricing scenario at the moment. But since the new crop is expected from October, middle or October end, I think there is a pressure on the prices of basmati rice. But these prices could sustain because when the government recently announced MSP have increased by INR 200 in non-basmati rices, it does not affect on the basmati rice also. Because they are brother and sisters only as far as [ rice ] is concerned. So those prices have sustained themselves at the price level of INR 66, INR 67. Moreover, there is hardly any carryforward. Today, [ if one had ] fresh order of 100,000, 150,000 comes into the market for shipment up to October, these prices can jump again above INR 70, INR 72. So there is hardly any stock which can sustain the prices. Prices can go up, prices cannot go down. That is the second position. Number 3 is the rains are very good, the sowing is very good. We are expecting a price of INR 28, INR 29 -- between INR 28 to INR 30, this we are expecting. Previously, we used to say the price will be not more than INR 26, INR 27 because of the INR 2 MSP increase in the non-basmati rice, we feel that the price should remain between INR 28 to INR 30 and that is the price of the new [ paddy ], then definitely, business will also come and we will be able to do better over last year.
We'll take the next question from the line of Varun Goenka from Reliance Capital.
I had a question on the exports, since we were talking about that. Can you give us some volume outlook for the next 2 years? And Adani has gone and bought the [ Mosin ] brand is what was reported in media. So the trade of between India and Iran on million tonne, does that get impacted by Adani buying this brand, which is, I hear, 25% quarterly importer?
Let me clear you two things. That brand is not purchased by Adani. It's just been purchased by Wilmar. And we know that Wilmar is a partner of Adani as far as oil is concerned in India, but this does not give them the assurance that they are going to buy rice also from Adani. Yes, because of the partner they have definitely advantage that they will first discuss with Adani but they are also talking to other 3, 4 major players because what they have told Adani that 50% we can buy on the production, which isn't 50% on the trading base. So things are not clear, that is number one. Number two, Wilmar has purchased this brand from [ Mosin ]. And [ Mosin ] has sold this brand because they have already cheated dozens of people in India, and they're still to -- people have still to receive big money from [ Mosin ]. As far as [ Mosin ] brand is concerned, they have been in the market for quite long, and their system of sale has been as we've say [ Foreign Language]. They used to buy [ letters there ] $1,000 and sell it $1,000 only and whatever used to be expenses because they have decided not to pay to the Indian market. So they were actually the spoilers of the brand in -- spoilers of the other brand in the Chinese -- in the Iran market. So it is still too early to say which way Wilmar will go, what is their strategy and how they are going to go. But definitely, one thing is there, that Wilmar is quite strong in oil over there, their other partners and all who have opted them to buy this brand. But it is too early, I think, for the picture would be clearer somewhere in September. That is number one. Number two, this [ Mosin ] used to buy approximately 200,000 tonnes of rice from India. Whereas Wilmar has come out to say, in very first year, we might go for just 100,000. And I do not know if they will go for 100,000 or they will go lesser or they will go more. But this has got nothing -- this is not going to impact the Indian market at all because the total basmati market for Iran is anything between 1 million to 1.1 million.
Okay, that's very -- sir, which volume outlook can you clarify in the course of next 2 years? And realization difference between traditional and pusa [ Uttarakhand ]. Are people in Europe...
We have one -- we have 3 major varieties which have been exported out of India. One is the traditional variety, which is dying, which is dying, which used to be 100% export in 1990s and 1995. Because of their yield per acre which is 9 quintal, 10 quintal compared to pusa, which is 15 quintal compared to double one-to-one, which is 18 quintal compared to 1509, which is 20 quintal, it is dying because farmer doesn't get the price, double, 2.5 times, over other varieties of basmati rice. So that particular segment is dying. But still, there is an export, but that export may be of total production of India, not more than 5%, 7%. That is the position. The major export, which is more than 50% out of India is double one-to-one. That is the majority of the export, and the crop cultivation. And for the Chinese also, accordingly, the same. Today, whatever -- let us say, I'm talking of paddy. Let us say rice. Rice, totally, we grow around 6 million tonnes. Out of that 6 million tonnes, according to our assessment and government and the [indiscernible] figures, 4 million tonnes alone is double one-to-one, and less than 2 million tonnes is pusa, [ suganda ], 1509 and the others. This year -- because last year, people got a very good price of 1509, [ Punjab ] has I think to reduce its cultivation, 10% to 15% of double one-to-one, and then gone to 1509. Overall, this year, the production will be 6 million tonnes less of basmati rice.
Okay, okay. Next maybe 2 years volume assessment [ telegraphing ] basically?
Yes. According to us, as far as international markets is concerned, it is about 6%. There has to be jump, that's number one. And number two, it all depends upon that what is the reaction of China because if China start, then definitely, it will be a market of 300,000, 400,000 tonnes maybe from 3 years from now or 4 years from now. That will become a big market. Because today, we are buying a big quantity of Thai fragrant rice. But yes, a lot of rice. Basmati has been smuggled from Hong Kong. So looking past that scenario, I feel that the very first year, we should export 50,000 tonnes. Subsequently, that leads to 3 times or 4 times, that is China. Now another problem has come that all the Middle East countries are disturbed, whether it is due to Trump's the sanction, maybe it is due to their own internal reasons. For example, Iraq. Iraq is a very big buyer. They buy about 400,000 to 450,000 tonnes of rice, basmati rice every year. But payment is a problem from Iraq. There was -- that is why I do not know this year, we will be able to achieve those quantities or not. Yemen is another place where there is a disturbance. Then there are many countries which have come in -- OPEC countries where there is a big demand, like Libya, Algeria, let's see, Syria, Lebanon. There are many countries that [ fall under afraid ] there is a problem there. Now see, to tell you today exactly what -- if let me tell you, everything goes very good, then these all sanctions are removed, then things are come to their normal situation, India is -- can export, at least 25% more what is our -- instead of 4 million to 5 million. But every time there are some restrictions or other, which made the figure back to 4 million only. This is the position.
Just on the industry side, I wanted to understand, on one hand, are we -- Adani had, ITC have maybe per [ country ], I don't know, is entering or intent to [indiscernible] they don't have any back-end experience. But -- and on the other side, several players have gone bankrupt, several brands out of the market, several weaker companies have gone. Does that make an opportunity for KRBL because of its leadership brand, maybe distribution, maybe procurement? Does that make it -- us much more stronger for volume growth? How does...
I think that Anoop will answer this question.
Definitely, you see from the last 2 years, if you say it's an [ incentive ] -- my market penetration was 26 to 29; from last year, it was 29 to 36. Because of one is the GST and the other is because of GST, many brands are out of the market. Now if you see, there are only 2 brands which are mainly in the market, is India Gate and [indiscernible]. If you talk of Adani also, Adani has got a 4% share, Wilmar has got a 3%, 4% share. [ I meant more ], if you talk of 2 people only, they hold more than 60% of the share.
Definitely, there's advantage on India Gate, there's no doubt about it.Let me tell you -- let me add, when you talk of Adani, Patanjali, bits of McCormick [ renewed ] in the domestic market or any other brands, they have no market abroad. Let me tell you, as on date Adani has no market abroad. I do not know if there -- what is their export in the private label, but I have been to every market, and especially in the Gulf, which imports about 65% to 70% of our basmati, [ big ] Gulf including personal Gulf. There is no recognition of these brands, be that Patanjali or Adani or your McCormick or anybody. That's point number one. I just wanted to Anoop tell them about that export. Now tell them about this financial scenario of the segment. [ For ] now, all the mills are becoming NPAs and all what is there. Anoop, should I tell or you tell?
You tell.
Let me tell you what have happened. This wasn't a totally unorganized sector. We have back up to 2000, it was result on the small scale sector. So if you go from -- on from [indiscernible], both sides, there were hundreds of rice mills. Totally, there are more than about 3,000 rice mills in Punjab and [ Ariana ]. Out of these, 300 mills are on basmati rice. Now this [indiscernible] in this small scale sector because the government of India way back in 1994, '93, decided that we want to recognize this basmati export as a niche product. And they came all the way open the coffers of the banks, the government of India, gave no -- give money to the basmati people and the agriculture sector for the exports. So demand was not [ dreamed ] that what is INR 10 crores, or what is INR 50 crores did got the limits of INR 100 crores, INR 200 crores. They couldn't dream even then INR 10 crores, INR 20 crores. So from '95 up to 2008, the coffers were open, the government coffers, and they got money and money this [indiscernible] you go to Punjab, you go to [ Ariana ], even small places in [ UP ] or anywhere, what is your limit, INR 50 crores, INR 100 crores. INR 100 crores and INR 200 crores became as it is a peanut of grown on the trees. What has resulted that everybody entered into over-trading, everybody's aspiration increased. They diversified the funding to real estate and many other places, with the result that many companies which -- I used to say about 20 years back, no, they are the real pillars of the Indian basmati industry, they vanished. And the first company to vanish from India was the brand called [ Pari ]. I don't know whether you have heard that name or not, and some are [ indiscernible ].
[ If they get you to NPA ], KRBL will get a penny from...
I'm telling you why I'm telling them while I'm -- then I'll tell them, Anoop. So these are the result of becoming [ NPAs ]. The reason was that [ seat ] barely comes for 3 months, barely comes for 3 months. And the total [ paddy ] purchased has to be done during the 3 months. Now for KRBL, whenever we buy paddy, we have a 2 years program, we know what we are going to buy, we are going to sell and at this price what do we have -- going to sell because we are in a position to dictate our pricing based on our brand. Where are all the people they are playing a speculative game. When they are playing the speculative game, they do not know to whom they are going to sell, whether they will be able to liquidate the stocks or not and what is going to happen, and that is the reason this whole industry has gone into bad shape, that's number one. Now as far as KRBL is concerned, let me tell you. In agriculture, you have -- you cannot be totally an open-minded man. Every week, we haul everybody who is involved in the business, our whole group, including our purchase manager, all the -- everybody in the company, maybe 10, 15 people. We sit together, we decide what is the price, how much do we purchase, how much not to be purchased, at what price to be purchased. So we have a very dedicated control on ourself in spite of having a good [ belt ] limit and in spite of having our own reserves. The company has good rich reserves, and we have good limit. Many a years this has happened, bankers coming to us why you are not utilizing your limits to the full extent and all of that. So it is not that we are closing our eyes and buying the goods. That is the reason of our success and that is the reason we are far better than the trade. That's number one. Number two, because if [ I ever become ] sick, what would be the advantage? The advantage would be, the advantage would be that the people who used to spoil the market at the auction time in October, November, December, then the market will be stabilized, it will not behave in a rollercoaster manner. That's the advantage we will get.
Just a final question. In Saudi Arabia, the distribution remains unchanged, intact completely.
It is definitely unchanged. We are with them for the last 35 years, and we are doing good business with them. There are many people who are approaching us because our variants are good. But as of now, we are not doing any change. But need be, we have got 5, 6 people who are ready to take over our brands.
We'll take the next question from the line of [ Amit Rupan ] an individual investor.
[ Amit Rupani ] here. I'm an individual investor. So I don't remember whether it was an [ LG or an OG ] who mentioned in the last earnings call that true challenge for KRBL is going from 450,000 tonne volume to 1 million volume in next 7 to 10 years, right? And currently, KRBL is fully focused on increasing volume and increasing market share to maybe 50%. So my question is can you please share some insights as to how does the management plans to raise volume from current levels of 450,000 tonnes to maybe 1 million, and also increase the market share to 50%? So any insight as to what the high level strategy is would be very helpful.
You see, when we talk of the volumes, we say, we have 1 million capacity, we have the full infrastructure. It is only the marketing, we have to look at the marketing to increase our volumes. Back-end is very strong. Financials are very strong. One part we have to look at the marketing of rice. And we say in the next 4, 5 years, we will act accordingly and may take it to 1 million tonnes, in another 6, 7 years. Yes.
We always tell them last time, what you told them is right, that we've told them today the consumption of basmati price in India is 2%, which is going to increase. That's the scenario you gave them. And in the next 4, 5 years, this consumption of basmati will increase in domestic market with many [ ports ].
Yes, market will increase. Maybe India or abroad market will increase, but the point here is that KRBL, the back-end infrastructure is too good. And we had 100% at place to give about to mill and to market, end market up to 1 million tonnes of rice.
Okay, so management is reasonably confident of achieving 1 million volume in the next future, right, may be 5 to 7 years? But we have all the back-end support and financial stability, is what you're saying, right?
Yes.
Got you. And my second question is that my understanding is that -- and also help me to further understand this process, but the rice aging is a complicated process, right? So I wanted to check what is the average percent of rice inventory that would go bad in any given year, right, and what I mean is, rice inventory loss because of maybe fungus or any other reason that can cause it to go bad. So if you can give me a rough estimate of what is the average percent of rice inventory that would go bad will be helpful.
In my career of 20 years, nothing has gone bad, 0%.
Okay. So at KRBL, we don't have any inventory loss by the aging process?
No, it will [ not go bad ]. Rice will not go bad. No.
We'll take the next question from the line of [indiscernible] from [ indiscernible ] Enterprises.
As for our [ ratings ], the management of KRBL is one of the best [ customer ] in transfer and management, we have all understood. In this context, there are some rumors in the market that there are some more litigations, or I can say, of some departments on KRBL we've -- I particular read that the management of KRBL is of extremely good quality. So these rumors should be addressed. So can you please make us understand about this?
There are no litigation which are undisclosed, number one. Number two, if you are saying the rumors to require, you tell me how to crush a rumor. What can we do about rumors? But there's no litigation on KRBL and on the motives of the company, which is not disclosed in the stock exchange.
We'll take the next question from the line of Resha Haria from GreenEdge Wealth Services.
Can you please elaborate what has led to the than 15% decline in sales for this quarter?
Mr. Mehrotra in the opening remark told you that about INR 200 crore cargo was lying at the Kandla port and it could not be shipped in the month of June. And it was ship in July first week, so the INR 200 crore top line will come in the second quarter. It is just a shifting from first quarter to second quarter.
But -- was this a one-off or any specific reason which led to this delay and...
No. I tell you -- let me tell you, see, every year, this -- every year what has happening, this Ramzan and Eid is being [ preponed ] by 1 month. If you see every year, next year, the -- Ramzan and -- they will fall in April and May. This year, they fall in May and June. So what happens specially in the month of June, though we had lot of cargo lying at Kandla to be exported because for 8 or 10 days, Saudi is closed and many of these countries are closed, so that is the reason this particular month, the June was a little weaker month, and it will reflect in July what just now Anoop-ji and Mehrotra-ji told you that goods were lying at port.
And what was the volume that we missed for this particular quarter? Was is the...
Yes, volume number you can note. Yes, in domestic, we did 70,645 metric tonne as compared to 68,170 metric tonne last year. In value terms, we did INR 379.57 crore as compared to INR 352.07 crore same period last year. So average realization for domestic has increased from INR 51,646 per metric tonne to INR 53,729 per metric tonne. In exports, we did a total numbers of 29,016 metric tonne as compared to 54,383 metric tonne last year. In value terms, it is INR 430 -- it is INR 268.05 crore as compared to INR 439.00 crores. And in -- per metric tonne, realization has increased from INR 80,724 per metric tonne last year to INR 92,380 per metric tonne in the current period. The only differences come because that around INR 200 crore worth of goods were lying at the port and could not be shipped. Otherwise, our numbers would have been much better in every aspect. Our realization is better, our domestic sale is better, and exports just because of this number there. In [ power, ] we have done better, from INR 37 crore the total revenue has increased to INR 38 crore. Rice bran sale has also increased, rice bran oil has increased, almost double. Seed business has done better. Furfuryl -- and furfuryl alcohol business has done better. So we have done better in all of other fronts except that shipment could not go, so that's why. Otherwise, we would have been better, higher by INR 100 crore in the current year, in the current quarter.
So I think, in the last con call, you had guided for a 10% to 15% kind of volume growth for 2018, '19. So are we on track to deliver that kind of a double-digit volume growth number for this year?
Yes, yes, yes. We are currently up to 10% there. We are looking at 10%, 12%.
Okay, okay. And if we look at the financial year 2017, '18, though inventory days went up by almost 40 bps, which led to the working capital shooting up. So any particular reason for the sharp jump in inventory days?
Inventory days in terms -- in the value terms has gone up because cost of the raw material procured in the '17, '18 was higher from normal -- average of INR 25 in '16, '17; it went up to INR 32 in '17, '18. That is the reason, in value terms, you are seeing that higher inventory. In quantity terms, the inventory remains almost same.
And then with reference to the media article that appeared, so do we still continue to do business with [ Mr. Omar, ] who, I suppose, is the distributor for our UAE business? And how much business have we done this -- than in the past?
No, we are doing -- okay.
You tell, you tell, Anoop. You tell.
Balsharaf is our distributor in Saudi Arabia, and we are still doing business with them. And in the past also, we have done a bit business with them. We don't face any problem. Why should we stop with them? They are doing business. We are sending them document, they are paying our payments. We are doing business. We are doing business with them.
[Operator Instructions] Next question is from the line of Pankaj Bodade from Axis Securities.
Can you please repeat the numbers, volume and realization numbers?
Yes, sure. Any one you have a doubt or I should repeat all?
Please repeat all of them, I missed them.
In domestic sales, we -- current quarter, we did 70,649 metric tonne as compared to -- 70,645 metric tonne as compared to 68,170 metric tonne last year. In value terms, we did INR 379.57 crore as compared to INR 352.07 crore last year.
INR 352 point?
INR 352.07 crore. Our average realization has increased from INR 51,646 per metric tonne to INR 53,729 per metric tonne.
INR 51,647?
To INR 53,729.
729. Okay.
Okay. In exports, in the current quarter, we have done 29,016 metric tonne as compared to 54,383 metric tonne last year. In value terms, we did INR 268.05 crore as compared to INR 439 crore last year. Our average realization has increased from INR 80,724 per metric tonne for exports to INR 92,380 per metric tonne in the current year.
INR 92,382?
INR 92,380 per metric tonne.
And from that, it's INR 80,700 last year same period?
INR 80,724 [ Foreign Language ] INR 92,380 [ Foreign Language].
Sure. Sir, one more question regarding the expansion in non-rice segment. I would like to know more about your plans.
You mean to say non-basmati rice?
Yes, non-basmati too and the other segments which are beyond rice, if any.
We have entered quinoa and health segments...
Right. I was talking about -- everything about the same.
Yes, yes. So still, market is quite -- I mean, it's in the developing stage, and I think it's a long-term process. And we think within next 2, 3 years, we will grab a good market. It's not an overnight scenario where quinoa, chia seed and flaxseed. We have started marketing it, but it's a long-term process. It will take 2, 3 years to settle the market.
Right. And how about non-basmati segment?
Non-basmati, we are doing -- we are actually dealing in a high-quality non-basmati rice like jeera rice, gobindobhog, kolam rice, which has sold at INR 100-plus, and we are getting a good response, especially from South India. And we are doing well.
How was the revenue share from this segment in this quarter?
That I'll ask Mr. Mehrotra to send you the mail or something, it will be difficult on the phone to guide you.
We take the next question from the line of Kashyap Jhaveri from Emkay Global. Mr. Kashyap Jhaveri, I'm sorry to...
Hello?
Yes, we can hear you now.
Okay. Within exports, you gave this volume number...
Still the voice is low.
Am I audible?
Yes.
Within exports, can you give us a breakup of basmati within the export volumes and realization?
Yes, sure. I can. You can note down.
Yes.
We did 25,237 metric tonne of basmati at a total value of INR 248.71 crore. And 3,779 metric tonne of non-basmati at a total value of INR 19.34 crore. Average realization of basmati has increased to -- from INR 81,651 to INR 98,550 per metric tonne. There is a very big jump.
Okay. And basmati same quarter last year volume numbers, if you can give us...
I told you, 52,912 metric tonne last year, basmati numbers; and the value is INR 432.03 crore.
Okay, okay. Second question is on your domestic number, after lot -- many quarters, we have seen volume growth though very marginal. Has the HoReCa channel probably back onstream? Or there is still issues with respect to the GST number?
No, HoReCa, you see we are still facing GST problem in HoReCa segment. But my one particular SKU, which is Unity brand, is doing very well in the HoReCa segment. And the jump of 2% is not due to HoReCa, it is due to our consumer pack, which is as per India Gate brand is more and more being sold in modern trade and GT, that is due to that.
Okay, okay. So HoReCa would still...
Mr. Jhaveri, I'm so sorry to interrupt. May I please request you to use the handset mode.
Am I audible now? I'm actually on handset only. Probably, I'm just a little away from my -- probably -- am I audible now?
Yes, now it's okay.
Yes. So the HoReCa would have still declined during the quarter on Y-on-Y basis, is it?
HoReCa, most have been declined by 2%, 3%, 5%. But the increase is from the consumer angle.
Okay. And final question, in fact, can you give us paddy and rice inventory at the end of Q1 and the [ costing?]
Yes, sure. We have the inventory of 1 lakh 64,281 metric tonne, and the average price is INR 31,299 per metric tonne.
Sorry. I didn't get that number.
1 lakh 64,281 metric tonne paddy, and the average price is INR 31,299 per metric tonne.
Okay, okay.
Okay?
And Rice?
Yes, Rice, we have 3 lakh 47,402 metric tonne, and the average price INR 45,436 per metric tonne.
45,000?
INR 45,436 per metric tonne.
Okay, okay. Just one last question, if I can squeeze in. We were supposedly -- we were supposed to have a -- sort of a big order from Iran after a bit of lull last year. Now given the sanction thing which is going on with respect to Iran, does that order get executed this year? Or there is any sort of confusion over there?
No, it would be executed this year only.
We take the next question from the line of Manish Bhandari from Vallum Capital.
Sir, my question is regarding the challenge you are facing in quinoa market to expand the market and our market share. So if you could give me some highlight at how you are addressing those challenges? And what is the size of opportunity in quinoa? It is growing significantly, and I see a lot of people importing quinoa and expanding the business in India, while we would have a lot better chance to expand the market in India with our domestic brand and our domestic distribution strength.
You see, there's no -- you're right, there's no national brand of quinoa in India today except India Gate from Kashmir to Kanyakumari, we have said, in quinoa. But I tell you that still the market is not that mature. As per our calculation, the total market is about 1,000 to 1,200 tonnes. At first, we started the market wherein our MRPs are quite high. We kept the MRPs at the market level at around INR 800 to INR 900 a kg. Now we have reduced the price to around INR 400, INR 450 a kg. And now market is getting built up. Today, we have reached to about 10% to 15% of market share. And I think, we can go up to 30% of market share. If we go up to 30% also, then we can grow only up to 300, 400 tonnes of quinoa in the Indian market. I mean, market has to grow. The education of consuming quinoa should go up, and we are doing a lot of social media work on quinoa, and it is a long process. I don't think it is a overnight process. It will take 3, 4 years to get the people educated about quinoa.
Sir, can I ask you one more question if moderator could allow me?
Yes.
Yes, My next question is, I see a lot of value addition from Patanjali even in a product like quinoa, which is a quinoa puff. So is there any thought which has gone into -- in...
Yes, yes, yes. Our actually...
Maybe [ devise ] some value addition on snack category. And you have enough capital today and as well as enough profits. So rather than paying taxes maybe INR 50 crore of investment in these brands would have definitely changed the sort of 3- or 4-year view?
Yes, we are looking at it, we are looking at it. We have a full team from NIFTEM, and we are looking at snacks. Our R&D is working on it. We are looking at it. It's not that we are not looking, we are looking at it and decision may take some time.
We'll take the next question from the line of an [ Amit Agarwal ], individual investor.
My question is on power sector. Last time, everyone told that your stock [indiscernible] investing, taking progressive power because of the market condition. Has the market condition improved? And if investments -- further investments, do you think if the growth in power sector will slow down? Is revenue growth and profit growth, is that in the power sector only?
You see, power sector has not improved, and I don't foresee any investment in power sector because as per my calculation, IRR doesn't come. So I -- we don't expect any -- I don't expect any investment in power sector.
In next 2, 3 years, the growth in the [indiscernible] segment or you expect any growth there also?
I couldn't follow your question.
Year-to-year any growth would be there in power sector or no?
The growth will be whatever capital asset is already there. We are getting around INR 100 crore of revenue from power. So unless we improve -- we will keep on getting this revenue on the -- in power sector of INR 100 crores only.
Only -- that only?
Yes, yes.
The next question I have is, what is effect of GST for our products? How does it pertain to the market conditions? And what about the India Gate brand as such? Is it positive effect or negative effect?
No, it's neutral. Actually, India Gate is paying GST but it's -- brand is so strong that we are able to consume the GST and pass on the GST to the consumer. So the effect is somewhat better because a lot of brands are vanished from the market because of GST. So it is a positive for India Gate.
We'll take the next question from the line of Varun Goenka from Reliance Capital.
So all my questions are answered. Just one small thing. Can we use our India Gate brand for all non-basmati...
I'm so sorry to interrupt, Mr. Goenka. We are unable to hear you.
Hello? Can -- is my voice clear.
Yes.
Just one small question regarding our brand positioning. Can we use this India Gate brand for all our non-basmati and also our snack category that might come up in the future?
That is a thing of discussion. No, it's -- you can't -- I can't answer you. I mean, you're -- it's -- management has to think. We have to think, we have to discuss this matter.
[Foreign Language]
[Foreign Language] India Gate specialty non-basmati rice, high-quality, we can think selling INR 100-plus to the consumer. I'm doing in India Gate only.
Next question is from the line of Pankaj Bobade from Axis Securities.
Sir, I missed the basmati numbers. Can you please repeat it?
Closing stock?
Not the inventory. The basmati sales -- exclusive basmati sales.
Basmati has 2 types of sales. One is export and one is domestic.
Yes, but after -- you just mentioned it, INR 248 crore for this quarter?
This is domestic.
Yes, yes.
Domestic. Yes, can you please repeat those?
Yes. This is -- quantity is 25,237 metric tonne and the value is INR 248.71 crore.
Right. And...
This is export number.
Sorry, sorry.
These are export numbers, right?
Yes, export, yes.
Yes.
Okay.
And non-basmati export is 3,779 metric tonne.
3,700?
3,779 metric tonne, and the value is INR 19.34 crore.
INR 19.34 crore. And...
And domestic is 70,645 metric tonne.
Can you please repeat? 70?
7-0-6-4-5, 70,645 metric tonne.
5 okay.
And the value is INR 379.57 crore.
INR 379.57 crore. This is for Q1, right, FY '19?
Yes.
And how about FY '18?
FY '18, the domestic is 68,170 metric tonne.
68,000?
68,170 metric tonne.
68,170 metric tonne, right.
And value is INR 352.07 crore.
INR 352.07 crore.
And export is -- on basmati, 52,912 metric tonne and the value is INR 432.03 crore. And non-basmati export is 1,471 crore -- metric tonne.
1,471 metric tonne.
1,471 metric tonne, and the value is INR 6.97 crore.
Next question is from the line of Kiran Prasad from Karvy Stock.
Sir, you also said that Chinese facility has off [ late permitted ] -- granted permission with regard to import basmati rice from India. How much sales you -- I mean, sales to rest of the world going to be impacted of this development?
About China, you're asking?
Yes, yes. China -- Chinese government says granted permission with regard to importing rice India. So how much your -- I mean, global sales is going to be impacted of this development.
It is too early to guess that how much they are going to import. First, we have to start. We have not yet exported them a single kilo. Our delegation is going to China within next 10, 15 days. Thereafter only we will be able to evaluate that how much and what type of rice they import. Previously, they gave the permission to only import non-basmati rice, Chinese will import, India can export non-basmati. Now recently, we got information from [ indiscernible ], there will be a delegation and Chinese have increased -- agreed to import even basmati rice. And my assessment is that if they start importing basmati rice, I think, of a minimum in a year, they will import 50,000 tonnes. This is my guesswork.
Okay. So you're being receiving this total of basmati rice and also in non-basmati segment, you have got great brand recall. So I mean, how positive you are of this development?
How...
Positive you are of this development?
No, it's a good development. Actually, our trade deficits are increasing with China. China is a very big trade surplus, so they have to import things from India, and I'm quite positive that some positive news will come during the delegation visiting China.
Sir, in recent past, I came across with one news there in paper that KRBL is going to take over or acquire REI Agro Commodities. So to what extent there is truth in this?
Actually, we had gone to see that unit. Actually, we have said no to them. We are not interested. Our own production line is so huge, whereby alone in Punjab, I can mill 1 million tonne. I can mill another 250,000, 300,000 tonne in our U.P. plant. So when there are so huge already milling capacities with us, but we just wanted to -- we went there to see how is the plant and what was the reason of the failure. Actually, we are never consented to buy that.
We take the next question from the line of Kashyap Jhaveri from Emkay Global.
You mentioned about this INR 200 crore shipment, which is lying at Kandla port sort of ready to be shipped, but was shipped only in July. Now even I were to consider that, our export volumes would -- in basmati probably 45,000, 46,000 odd tonnes versus 53,000 tonnes in the same quarter last year. Now what could be the reason for that volume decline even after considering that INR 200 crore shipment?
Let me tell you, there are 2, 3 reasons as far as volumes in exports are concerned. The first reason is that there was Ramzan during May, June, and there were 10 days holidays and holidays in -- of Eid holidays during June. So June became...
This INR 200 crore is about 25,000 tonnes. No, there is no volume degrowth.
No, no, no. [Foreign Language]
In general, we are talking what he is asking...
You're right, that's why we told you, it would have come INR 100 crore plus if those shipment would have gone.
That is 25,000 tonnes.
In value terms, we would have done better.
It should be around 20,000 tonnes.
Yes, that's what I -- so that 20,000 tonnes plus [ 29,000 ]...
No, 25,000 tonnes. You see, at a average rate of INR 65 even, it comes to around 26,000 tonnes.
Okay. Because I just simply divided INR 200 crores by realization of 98,700.
No, it is not 98,000. That realization of that material, which was landing was INR 70.
Okay, okay, okay. So you were mentioning one thing about Ramzan, which is about 10 days...
Normally, in Ramzan -- last year, the Ramzan came in the month of July. So July month was a very low month for exports. This year, it will come in May, so May will become -- in 2018, '19 -- and 2019, '20, it will be May. That is number one. Number two, we got a setback, we, as a company, of about 4,000, 5,000 tonne of brown rice also, which we are unable to sell to Europe. That was also one of the reason. Other than -- otherwise, those hits would not have been on KRBL, our export figure for the first quarter could have been fantastic.
Thank you. Well, ladies and gentlemen, this seem to be the last question for today. I would now like to hand the conference over to the management for their closing comments.
Thank you very much for all the questions. And we'll be pleased to answer -- anybody can write to us, we'll be pleased -- delighted to answer the question.
Thank you.
Thank you. Goodbye to everybody.
Thank you very much, ladies and gentlemen.