Reopening of hotels & restaurants help KRBL shares gain momentum
The shares of rice producer and milling company, KRBL Ltd were trading high on Wednesday. The shares gained as much as 5 per cent intraday. A strong business outlook was well-supported by positive market sentiment.
KRBL Ltd gets nearly 45 per cent of its revenues from exports. In the initial phase of the lockdown, its international business was already facing headwinds. Probable impact on its larger business segment was one of the major reasons due to which, the price fell much worse during the market meltdown in March 2020.
The company as of June 2020 had informed that all its plants are running at full capacity. With highly automated technology, the company has been able to resume its processing and packaging activities nearly to its pre-COVID levels. In terms of its business facility and resilience to the logistical curbs, the online mode of marketing and selling helped it during the first quarter while during Q1FY21, the company saw as high as 70 per cent growth in the online sales on a YoY basis.
In addition to this, due to the challenges and restrictions, its important customer segment that is ‘hotel, restaurant, and catering’ (HoReCa) segment also faced several challenges during the first quarter. Although with consistent and successive phases of unlocking in many states of the country, the segment is witnessing a gradual improvement. The stock is expected to take cues particularly from the news of hotel reopening.
The stock closed at Rs 272.20 on BSE, higher by 4.5 per cent from its previous closing price.