As of 2024, India remains the largest exporter of rice in the world, despite facing significant challenges due to government export restrictions.
In the fiscal year ending March 2024, India’s rice exports are projected to decline to approximately 15.7 million tonnes, a substantial decrease compared to 22.2 million tonnes in 2022.
Recently, the Union Government removed the minimum export price (MEP) threshold for basmati rice exports, according to a statement issued by the Ministry of Commerce and Industry on Saturday.
This decision is intended to enhance the incomes of farmers by permitting the export of basmati rice, a premier GI-tagged variety from India. The statement noted that the measure was taken in response to adequate domestic rice availability and ongoing trade concerns.
Also read: Stock under ₹ 300 to benefit from Govt plans to invest ₹ 1 Lakh Cr to build 75 tunnels
The Agricultural and Processed Food Products Export Development Authority (APEDA) has been instructed to take immediate action to implement the decision. APEDA will closely monitor export contracts to avoid unrealistic pricing of basmati rice and maintain transparency in export procedures.
In August 2023, a floor price of $1,200 per metric tonne (MT) was set for basmati rice exports as a temporary measure, in response to tight domestic supply and increasing rice prices in the local market.
The decision was also made to prevent the misclassification of non-basmati rice as basmati during exports, as the export of non-basmati white rice was prohibited to meet local demand.
However, in October 2023, the government lowered the floor price for basmati rice exports to $950 per MT, following appeals from trade bodies and stakeholders.
Here are a few rice stocks that witnessed a sharp rise in their share prices and jumped up to 20 percent, following the government’s decision to remove the floor price for basmati rice exports:
KRBL Limited
With a market cap of Rs. 7,370.3 crores, the shares of world’s leading basmati rice producer surged by around 7.7 percent on BSE to Rs. 327.5 on Monday.
The company has reported a significant growth in revenue from operations, with around a 15.2 percent YoY rise from Rs. 1,414 crores in Q1 FY24 to Rs. 1,199 crores in Q1 FY25. However, the net profit declined by 55.4 percent YoY from Rs. 195 crores to Rs. 87 crores, during the same period.
The stock has delivered negative returns of nearly 22.2 percent in one year, as well as around 14.4 percent returns year-to-date.
In Q1 FY25, the company’s both volume and realisation increased for branded basmati rice, while non-basmati branded sales grew by 23 percent.
Incorporated in 1993, KRBL Limited is a fully integrated operations in every aspect of the basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing.
Among the many brands owned by KRBL Limited, “India Gate” is the flagship brand both in domestic and international markets.
Also read: FMCG stock hits 10% upper circuit after receiving order worth ₹ 11 Cr from Mother Dairy and Dabur
LT Foods Limited
With a market cap of Rs. 15,093.4 crores, the shares of a leading Indian-origin global FMCG company in the consumer food space surged 9.7 percent on BSE to hit a new 52-week high at Rs. 446.95 on Monday.
The company has reported a significant growth in revenue from operations, with around a 16.5 percent YoY rise from Rs. 1,778 crores in Q1 FY24 to Rs. 2,071 crores in Q1 FY25. Similarly, the net profit increased by 13.2 percent YoY from Rs. 137 crores to Rs. 155 crores, during the same period.
The stock has delivered multibagger returns of nearly 161.8 percent in one year, as well as around 113.8 percent of positive returns year-to-date.
LT Foods Limited is a leading player globally in the specialty rice and rice-based foods business, while its 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.
The company’s flagship brands include ‘DAAWAT’, one of India’s most loved and consumed Basmati brands, ‘Royal’, North America’s No. 1 Basmati player and many more.
GRM Overseas Limited
With a market cap of Rs. 1,663.5 crores, the shares of a leading player in India’s FMCG sector and a top exporter of premium basmati rice surged by around 12.3 percent on BSE to Rs. 287 on Monday.
The company has reported a significant growth in revenue from operations, with around a 15.6 percent YoY rise from Rs. 320 crores in Q1 FY24 to Rs. 370 crores in Q1 FY25.
Also read: 2 Railway stocks jump 4% after receiving orders worth up to ₹ 1,021 Lakhs for seats and wagons
Similarly, the net profit increased marginally by 5.8 percent YoY from Rs. 17 crores to Rs. 18 crores, during the same period.
The stock has delivered positive returns of nearly 34.3 percent in one year, as well as around 45.2 percent of positive returns year-to-date.
Founded in 1974, GRM Overseas Limited is engaged primarily in the business of milling, processing and marketing of branded/non-branded basmati rice in the domestic and overseas markets.
Kohinoor Foods Limited
With a market cap of Rs. 173.6 crores, the stock hit a 20 percent upper circuit on BSE at Rs. 46.82 on Monday.
The company has reported a decline in revenue from operations, with around a 7 percent YoY fall from Rs. 25.6 crores in Q1 FY24 to Rs. 23.8 crores in Q1 FY25. Similarly, the net loss increased from a loss of Rs. 1.04 crores to a loss of Rs. 2.5 crores, during the same period.
The stock has delivered positive returns of nearly 32.5 percent in one year, as well as around 1.3 percent of positive returns year-to-date.
Incorporated in 1989, Kohinoor Foods Limited is engaged in the business of milling, processing and selling of rice, and trading food products and other agri-commodities.
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.
