KRBL Limited has received an adverse arbitral tribunal award requiring substantial financial compensation following a distributorship agreement dispute. The company disclosed this development through a regulatory filing dated February 27, 2026, pursuant to SEBI listing regulations.

Arbitration Background and Proceedings

The arbitration proceedings were initiated by Reliable Trading Company (formerly known as Al Quraishi Marketing Co. Limited) under Section 9 of the Arbitration and Conciliation Act, 1996. The dispute arose from KRBL's decision to terminate distributorship agreements that were executed on specific dates in 2022.

The arbitration was conducted in accordance with Delhi International Arbitration Centre (Arbitration Proceedings) Rules, 2023, with proceedings overseen by a three-member arbitral tribunal.

Financial Implications of the Award

The arbitral tribunal delivered its final award on February 26, 2026, ruling in favor of Reliable Trading Company. The tribunal found that neither party committed fraud or willful misconduct during the course of their business relationship.

The award represents a significant financial liability for KRBL, encompassing compensation in two major currencies along with applicable interest charges.

Dispute Details and Termination Context

The arbitration proceedings centered on KRBL's termination of distributorship agreements with Reliable Trading Company. The specific agreements in question were executed on January 14, 2022, and May 21, 2022. Reliable Trading Company sought damages and compensation related to the termination of these commercial arrangements.

The company had previously informed stock exchanges about the initiation of these proceedings through a communication reference KRBL/SE/2023-24/84 dated February 06, 2024.

Legal Response and Next Steps

KRBL has indicated its intention to challenge the arbitral award through available legal remedies. The company is currently in the process of obtaining legal advice to pursue an appeal under Section 34 of the Arbitration and Conciliation Act, 1996.

Key aspects of KRBL's planned response include:

• Seeking comprehensive legal counsel on challenge prospects
• Filing the challenge within statutory time limits as prescribed by law
• Pursuing all available legal remedies to contest the award

The company received the official copy of the arbitral award on February 26, 2026, and disclosed this information to stock exchanges on February 27, 2026, in compliance with regulatory requirements under SEBI listing obligations.

KRBL Limited delivered a resilient performance in Q3 FY26 despite challenging market conditions, reporting consolidated revenue of ₹1,476 crores with improved margins and strong operational efficiency. The company's strategic focus on premium segments and disciplined procurement helped maintain profitability amid geopolitical uncertainties.

Financial Performance Overview

The company's Q3 FY26 results demonstrated strong margin expansion despite revenue pressures. Key financial metrics showed significant improvement in profitability indicators.

For the nine-month period ended December 31, 2025, total income reached ₹4,572 crores, representing 10% year-on-year growth. The company maintained strong margin performance with gross profit at 28.3%, EBITDA at 15.8%, and PAT at 10.6%.

Export Business Performance

Export operations faced headwinds during the quarter due to geopolitical tensions, particularly affecting bulk export segments. Export revenue declined to ₹357 crores in Q3 FY26 from ₹563 crores in the corresponding quarter of the previous year.

Despite quarterly challenges, the nine-month export revenue of ₹1,276 crores reflected a robust 21% year-on-year increase. The company's focus on premium branded exports helped maintain strong realizations, with branded export prices at approximately ₹1,42,000 per metric ton.

Domestic Market Dynamics

The domestic business demonstrated stability amid competitive pressures, with revenue excluding power remaining flat at ₹1,104 crores for Q3 FY26. The company maintained its market leadership position across multiple channels while focusing on margin preservation.

The company's market share remained strong across channels, with 37.8% in general trade, 39.3% in modern trade, and 41.2% in e-commerce. Distribution network spans 3.2 lakh retail outlets, reaching 1.2 crore urban Indian households.

Inventory and Balance Sheet Strength

KRBL maintained a strong balance sheet position with optimized inventory levels and improved cash generation. Total inventory as of December 31, 2025, stood at ₹3,941 crores, comprising ₹1,322 crores in paddy inventory and ₹2,450 crores in rice inventory.

Strategic Outlook and Growth Initiatives

Management outlined several strategic priorities for sustainable growth, including continued focus on premium product positioning and operational efficiency improvements. The company expects significant margin expansion in Q4 FY26, with EBITDA projected to improve by 200-250 basis points.

Key strategic initiatives include:

• Premium Portfolio Expansion: Strengthening branded and premium product presence in international markets
• Distribution Enhancement: Building robust go-to-market structure with 16 C&Fs and 8 super stockist points
• Capacity Optimization: Long-term consolidation plans at Panipat for enhanced scalability
• Product Diversification: Expanding Uplife brand with value-added rice products and edible oil segment

For the next financial year, management projects export growth of approximately 15%, supported by India's pricing competitiveness and strong demand in key markets. The company's disciplined procurement strategy and deep sourcing network position it well to capitalize on emerging opportunities in the global rice market.