Buy LT Foods Ltd for the Target Rs.518 by Geojit Investments Ltd
Tariff Eases, Regional Expansions Will Aid Growth
LT Foods Ltd. (LTF) is a global consumer specialty company with an explicit focus on basmati rice, organic foods and ready to eat/cook (RTE/RTC) products. LTF is having a presence in more than 80 countries with significant regional exposure in the US, Europe, Middle East etc
* Revenue grew by 24%YoY (normalized growth at 8% YoY excluding US tariff and Golden Star revenue) for Q3FY26, led by broad-based strength across geographies despite the US tariff headwind.
* Segment wise, Basmati revenue (86% mix) grew by 25%YoY, while organic (8% mix) declined by 7%YoY and RTH/RTC-Ready to Heat/Cook (1.5% mix) witnessed flat growth YoY.
* Gross margin improved 70bps YoY to 34.2%, supported by softer input costs and better procurement while EBITDA margin grew by only 20bps YoY to 11.2% due to increased spend on brand and strategic initiatives. Crop 2025 basmati production was lower than estimates due to weather related disruption and strong demand indicates higher prices.
* LTF’s subsidiary, Ecopure Specialities Ltd (Organic segment) had received a preliminary notice from the US DoC for a CVD @ 340% (~Rs.170cr) on sales of Rs. 50cr (0.6% revenue mix) pertaining to CY23. As per the latest order, the duty has now been reduced to 75.5%.
* LTF targets Rs.1,000cr each from the recently set up manufacturing facility in the UK and from the expanded distribution in Saudi Arabia in next 5 years. • EBITDA margin is expected to improve as the company scales up its value-added segments. The RTC/RTE segment is projected to grow at ~35% and is likely to achieve breakeven at around Rs.400cr in revenue by FY27 (Rs.200cr in FY25).
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