At a Glance
GRM Overseas Ltd, known for exporting basmati rice and more recently for its FMCG foray with the 10X brand (backed by none other than Salman Khan), is trying to spice up your pantry and your portfolio. With sales of ₹1,348 Cr in FY25, a ROE of 16.2%, and a market cap of ₹2,234 Cr, it’s straddling the line between agri-exporter and kitchen FMCG disruptor. But margins are tight (OPM just 6%) and promoter holding just dipped. So, the big question—can GRM be the next LT Foods, or is it just a flashy packet with little masala inside?
1. 🕵️♂️ WTF Do They Even Do?
- Core Business: Basmati rice processing, branding, and exports.
- Subsidiaries:
- 🌍 GRM International Holding Ltd. (UK)
- 🇺🇸 GRM Fine Foods Inc. (USA)
- 🇮🇳 GRM Foodkraft Pvt. Ltd. (India)
- New Focus:
- Domestic FMCG under 10X Brand (atta, spices, ready-to-eat, etc.)
- Think Tata Sampann meets MDH but with Bhai as brand ambassador 🥲
2. 💸 Financials – Where’s the Pulao?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 770 | 1,134 | 1,379 | 1,312 | 1,348 |
| Net Profit (₹ Cr) | 45 | 85 | 63 | 61 | 61 |
| OPM % | 9% | 8% | 7% | 6% | 6% |
| ROE % | 7.6% | 13.9% | 10.4% | 9.9% | 10.2% |
| EPS (₹) | 7.65 | 13.97 | 10.45 | 9.96 | 10.21 |
- Margins? Choked tighter than airport zippers. OPM has fallen from 9% to 6% even as revenue stabilizes.
- Net Profit? Flat for 3 years. Steady but uninspiring.
- EPS? Steady around ₹10, but valuation is bloated (PE ~36.5).
3. 🔥 Valuation – Is It Biryani or Bharta?
- CMP: ₹373
- Market Cap: ₹2,234 Cr
- PE: 36.5x (👀 higher than peers like KRBL ~19x and LT Foods ~27x)
- Book Value: ₹70.9 → P/B = 5.26x (phew)
- FY25 PAT: ₹61 Cr
- Implied Trailing PE: 36.5
- Implied EV/EBITDA: Over 25x
🔍 Fair Value Estimate
Assuming:
- EPS grows to ₹13–15 over next 2 years
- Valuing at PE of 22–25x (in line with LT Foods’ mid-FMCG positioning)
🧮 Fair Value Range = ₹286 – ₹375
⛔ Current Price (₹373) is at upper bound already
4. 🍽️ What’s Cooking – Bhai, Rage Coffee & Chile?
- Celebrity Kick: Salman Khan as brand ambassador for “10X” (Dec 2024)
- Global Expansion: Partnerships in Chile with Solariz & Supermercados
- FMCG Push: Ready-to-eat + spices + atta + kitchen goods
- Strategic Stake: Acquired 44% in Rage Coffee (Aug 2024)
- Warrants Mania: ₹15.21 Cr raised via 13.5L warrant conversion in May 2025
🧨 Problem: Despite flashy moves, revenue growth has stalled, and FMCG contribution is yet to “explode” 📉
5. 🧾 Balance Sheet – Healthy or Hype?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Equity Capital | ₹4 Cr | ₹12 Cr | ₹12 Cr | ₹12 Cr | ₹12.27 Cr |
| Reserves | ₹131 Cr | ₹194 Cr | ₹262 Cr | ₹319 Cr | ₹414 Cr |
| Borrowings | ₹188 Cr | ₹338 Cr | ₹413 Cr | ₹393 Cr | ₹364 Cr |
| Debt/Equity | 1.2x | 1.5x | 1.4x | 1.2x | 0.9x ✅ |
| Fixed Assets | ₹36 Cr | ₹37 Cr | ₹39 Cr | ₹37 Cr | ₹40 Cr |
| Total Assets | ₹415 Cr | ₹667 Cr | ₹784 Cr | ₹770 Cr | ₹911 Cr |
💣 Low capex, high borrowings = risk of stalling
✅ But recent drop in debt is encouraging
6. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| CFO (Op. Cashflow) | -116 Cr | -89 Cr | +47 Cr | +62 Cr |
| FCF (Post-Capex) | ~Low | ~Low | +ve | +ve |
🟢 FY24–25 finally shows positive cash flows after years of negative numbers
🔴 But consistency will be key to unlock FMCG dreams
7. 📊 Ratios – Sexy or Stressy?
- ROE: 16.2% ✅
- ROCE: 13.5% (down from peak 29%)
- Debt/Equity: 0.9x 🟢
- Inventory Days: 102
- Debtor Days: 130
- Cash Conversion Cycle: 223 days 🤯
🚨 Working capital cycle is slower than IRCTC ticket refunds
8. 📉 P&L Breakdown – Show Me the Masala
| Line Item | Mar 2025 |
|---|---|
| Sales | ₹1,348 Cr |
| Operating Profit | ₹80 Cr |
| OPM | 6% |
| Net Profit | ₹61 Cr |
| EPS | ₹10.21 |
- Operating profit = Tight margins
- Net profit = Plateaued
- No dividend = Reinvestment strategy or just FMCG hoarding?
9. 🆚 Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | OPM % | ROE % | PE | Div Yld |
|---|---|---|---|---|---|---|
| LT Foods | 8,681 | 605 | 11.3% | 16.8% | 28x | 0.4% |
| KRBL | 5,594 | 476 | 12.1% | 9.4% | 19x | 1.0% |
| Chamanlal Setia | 1,495 | 102 | 9.4% | 14.2% | 18x | 0.6% |
| GRM Overseas | 1,348 | 61 | 6.0% | 16.2% | 36.5x | 0.0% |
⚠️ Overvalued vs peers
🤷♂️ Betting on FMCG transformation, but not there yet
10. 📦 Miscellaneous
- Promoter Holding: 70.84% (Down from 72.43% last year) 🔻
- FIIs + DIIs: Slowly creeping in
- Shareholders: 25,783 – Public interest rising post 10X branding
- Auditor: M/S Umang J & Co (Internal Auditor, FY25)
- New Capital: Warrants converted to equity, hinting growth capex or marketing spend ahead
🧑⚖️ EduInvesting Verdict™
🚫 This ain’t just a rice company anymore — it wants to be the Patanjali-lite of packaged groceries.
💼 Salman Bhai is onboard. Chile expansion is underway. Rage Coffee is brewing.
📉 But margins are razor-thin, working capital cycle is brutal, and the valuation is already baking in a fairy tale.
🔮 Until the 10X FMCG pivot translates to 10X margins or 10X growth, it’s just a story stock — with decent fundamentals, but no “delicious” upside baked in yet.
🎯 Fair Value Range: ₹286–₹375
🧘 CMP: ₹373 → Valuation fully loaded like Bhai’s gym bag
✍️ Written by Prashant | 📅 July 5, 2025
Tags: GRM Overseas, 10X Brand, FMCG, Basmati Rice Stocks, Salman Khan GRM, Smallcap Rice Exporters, EduInvesting, Rage Coffee Stake, Foodkraft India, GRM Analysis
