Synopsis:
KRBL shares dropped heavily today after the board’s independent director, Anil Kumar Chaudhary, resigned, saying that the company faces multiple governance failures and weak corporate governance.
KRBL is one of the largest exporters of basmati rice. It features the very famous rice brand, India Gate, which has a solid word of mouth among its customers. But this huge statement by its independent director makes the future of this business very unpredictable.
With a market capitalization of Rs 9,167 crore, the shares of V made a day low of Rs 387.05 per share, down by 13 percent from its previous day closing price of Rs 444.10 per share. Over the past five years, the stock has delivered a poor return of 45 percent.
About the fall
The shares plunged sharply today as the company’s Independent Director, Mr. Anil Kumar Chaudhary, resigned his post without any delay. He cited that he will not be able to make contributions as an independent director any longer, owing to several recurring issues
In his resignation letter, he stated numerous problems, such as errors and inconsistencies in board and committee meeting records, important information being withheld from directors, unexplained write-offs of certain receivables, and misuse of CSR funds.
He also raised concerns about unfair allocation of bonuses and salaries, and interference by non-board members in board discussions, which made it difficult for him to ensure proper oversight.
Even a good company can run into trouble if it is not managed properly. When rules are violated, important information is hidden, or decisions are made unfairly, it can make investors lose trust and harm the company’s growth. Good governance means running the company honestly, fairly, and carefully, which helps protect its reputation and keep it strong for the long term.
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Financial Highlights
KRBL’s revenue for Q1 FY26 came in at Rs 1,584 crore, up by 32 percent from Rs 1,199 crore in the same quarter last year. Additionally, on a sequential basis, revenue grew by 10 percent from Rs 1,442 crore in Q4 FY25.
Coming to its profitability, the company reported a net profit growth of 74 percent to Rs 151 crore in Q1 FY26 as compared to Rs 87 crore in Q1 FY25. However, on a QoQ basis, it recorded a slight decline of 2 percent from Rs 154 crore.
The company has delivered an ROE and ROCE of 9.42 percent and 11.84 percent respectively, and is currently trading at a low P/E of 16.94x as compared to its industry average of 21.34x.
KRBL Limited has the experience of over 130 years and is the first integrated rice company in the country, that is, the company that is fully integrated with the rice supply chain. Besides, it is the leader of the Indian market for rice products. The company is all about the production, promotion, and innovation of rice. Their product range has been recognized worldwide.
KRBL is into the complete management of the product’s lifecycle from the development of the seed to the marketing of the product through contract farming, production, and distribution, all of which are supported by a qualified team of professionals. The company keeps growing its portfolio of products and is planning to increase her presence in foreign markets.
Written by Satyajeet Mukherjee
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