KRBL Ltd, the company behind India Gate rice, has been busy with boardroom drama and trying to sell products outside its core rice business.
The latest shock: Independent director Anil Kumar Chaudhary’s resignation, citing KRBL’s issues such as withholding information that impacts decision-making, not recording board meetings properly, and unjust write-offs, among others.
The stock fell about 10% on Monday.
KRBL said in a conference call on Tuesday that it will hire a third-party firm to review the issue within 30 days.
This is not the first time such issues have surfaced. In the AgustaWestland case, the Enforcement Directorate (ED) arrested the company’s joint managing director, Anoop Kumar Gupta, in 2021 for alleged involvement in laundering money linked to the VVIP chopper deal.
Moreover, KRBL has been venturing into newer avenues like edible oils, spices, and atta (flour). It even launched India Gate Uplife oils, earning sales of ₹50 crore in FY25 and aims for ₹200-300 crore in three years.
But setting up a whole new supply chain for oils and masalas is no small task. In short, it appears that KRBL wants to be in every kitchen category, instead of focusing only on its strength, rice.
Racing ahead
On the other hand, LT Foods Ltd, which owns Daawat and Royal brands, has taken a different path. It is still focused on rice but is adding value by launching ready-to-cook meals, organic rice, and health-focused products.
Its ready-to-eat and ready-to-cook business grew 21% year-on-year last year to ₹188 crore, while the organic segment grew 41%. LT Foods wants to cross ₹10,000 crore in revenue in four years, versus ₹7,000 crore in FY23.
Back in FY20, KRBL’s revenue was ₹4,499 crore, ahead of LT Foods’ ₹4,135 crore. But the tables turned in FY21 when revenue of LT Foods increased, while KRBL’s dropped. Cut to now, LT Foods’ FY25 revenue of ₹8,681 crore is far ahead of KRBL’s ₹5,594 crore.
Weak corporate governance and a lack of operational focus have meant the Street is rewarding LT Foods with a higher valuation. According to Bloomberg, its shares trade at 20 times FY26 estimated earnings versus 16 times for KRBL.
The message is clear. Investors are not viewing KRBL’s diversification into other products, favourably. In contrast, LT Foods is seen as stable, predictable, and serious about growth.
