The government is considering some changes to rice exports. They may allow exports of white rice with a fixed duty instead of the current restrictions, and might also consider removing the 20 percent tax on exports of parboiled rice, and instead using a fixed levy, as claimed by a few reports.
India is one of the world’s largest rice exporters. However, since July 2023, the government has been limiting exports of certain rice varieties. This supply restriction has caused rice prices in Asia to reach their highest levels in over 15 years as of January 2024.
Government data revealed that India’s total rice exports dropped by 21 percent to 2.9 million tonnes in April-May 2024 compared to the same period the previous year. Shipments of non-basmati rice specifically declined by 32 percent to 1.93 million tonnes during the same timeframe.
However, if the government decides to relax export restrictions, it would be welcomed news for countries in West Africa and the Middle East. These regions heavily depend on India for their food staples.
Currently, farmers in India are busy sowing their primary rice crop as the monsoon season begins. Planting activities are anticipated to reach its peak in July, and harvesting is scheduled to begin from late September.
Meanwhile, a few other reports suggest that the government may reconsider restrictions on exporting certain types of rice in September, once the current kharif season concludes and final production figures become available.
Here are a few rice stocks that have witnessed a rise in their share prices by up to 15 percent on reports of the government possibly easing export restrictions:
GRM Overseas Limited
Founded in 1974, GRM Overseas Limited, previously known as Garg Rice & General Mills, is engaged in the production, purchase, export, and sale of rice and paddy in India, along with manufacturing polythene.
With a market cap of Rs. 1,295 crore, the shares of one of India’s leading basmati rice exporters and a growing consumer staples player grew by 9.4 percent to hit an intraday high at Rs. 226.7 on Tuesday, as against its previous closing price of Rs. 207.15.
Financially, the company experienced a decline in its revenue from operations, showing a year-on-year rise of 6.4 percent from Rs. 433.6 crore in Q4 FY22-23 to Rs. 406 crore in Q4 FY23-24.
However, its after-tax profit increased during the same period from Rs. 11.3 crore to Rs. 21.2 crore, indicating a rise of 87.6 percent.
Over the past year, the stock has delivered positive returns of nearly 24.4 percent and so far in 2024, it has also shown gains of around 12.7 percent.
Kohinoor Foods Limited
Incorporated in 1989, Kohinoor Foods Limited, previously known as Satnam Overseas Ltd., is one of the leading Basmati Rice players and has a Rice mill situated at Murthal, Sonepat.
With a market cap of Rs. 169.3 crore, the stock surged by 9.7 percent to hit an intraday high at Rs. 46 on Tuesday, as against its previous closing price of Rs. 41.92.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of 51.2 percent from Rs. 16 crore in Q4 FY22-23 to Rs. 24.2 crore in Q4 FY23-24.
Similarly, its after-tax profit increased during the same period from a loss of Rs. 1.4 crore to a profit of Rs. 0.55 crore.
Over the past year, the stock has delivered positive returns of nearly 26.6 percent. However, so far in 2024, the stock has given around 1.7 percent of negative returns.
KRBL Limited
Founded in 1889 at Lyallpur in Pakistan, KRBL Limited is engaged in the production and distribution of rice, with its flagship brands: India Gate – No.1 Basmati Rice Brand in World and Doon.
With a market cap of Rs. 7,574 crore, the shares of a market leader in branded basmati rice grew by nearly 13 percent to hit an intraday high at Rs. 348.8 on Tuesday, as against its previous closing price of Rs. 308.8.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of 3 percent from Rs. 1,279.7 crore in Q4 FY22-23 to Rs. 1,318.3 crore in Q4 FY23-24.
However, its after-tax profit declined during the same period from Rs. 118 crore to Rs. 114.08 crore, indicating a fall of 3.3 percent.
Over the past year, the stock has delivered negative returns of nearly 4.3 percent and so far in 2024, it has also given around 12 percent of negative returns.
Chaman Lal Setia Exports Limited
Founded in 1974, Chaman Lal Setia Exports Limited is an India-based rice trader and manufacturer engaged in the business of milling and processing of basmati rice.
With a market cap of Rs. 1,160.6 crore, the shares of one of India’s leading basmati rice exporters grew by 15.2 percent to hit an intraday high at Rs. 237.2 on Tuesday, as against its previous closing price of Rs. 205.9.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of 7.4 percent from Rs. 357.2 crore in Q4 FY22-23 to Rs. 383.5 crore in Q4 FY23-24.
However, its after-tax profit declined during the same period from Rs. 37.7 crore to Rs. 23.2 crore, indicating a fall of 38.3 percent.
Over the past year, the stock has delivered positive returns of nearly 37.3 percent. However, so far in 2024, the stock has given around 12.5 percent of negative returns.
The company has been involved in export operations since 1982 and was recognised as an export house by the Ministry of Commerce in 1989, at present the company is a ‘Star Export House’.
The company exports to more than 80 countries around the world, including European, Middle-eastern, American, Asian and many other markets.
LT Foods Limited
LT Foods Limited is primarily in the business of milling, processing and marketing branded and non-branded basmati rice and manufacturing rice food products in the domestic and overseas markets. Its operations include procurement, storage, processing, packaging and distribution.
With a market cap of Rs. 9,636.3 crore, the shares of a leading Indian-origin global FMCG company in the consumer food space grew by 15.3 percent to hit a new 52-week high at Rs. 297.95 on Tuesday, as against its previous closing price of Rs. 258.4.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of 14 percent from Rs. 1,821.4 crore in Q4 FY22-23 to Rs. 2,074.8 crore in Q4 FY23-24.
Similarly, its after-tax profit increased during the same period from Rs. 131.8 crore to Rs. 150.2 crore, indicating a rise of 14 percent.
Over the past year, the stock has delivered multibagger returns of nearly 116 percent and so far in 2024, it has also shown gains of around 36 percent.
LT Foods’ rice product portfolio comprises brown rice, white rice, steamed rice, parboiled rice, organic rice, quick-cooking rice, value-added rice and flavoured rice in the ready-to-cook segment.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
