LTFOODS - L T Foods

📊 NSE: LTFOODS 🏢 Food - Processing - Indian 📅 Last Updated: 12/14/2025 9:08

💰 Financial Performance

Revenue Growth by Segment

Basmati and Specialty Rice grew 24% in H1 FY26 (normalized 11.4% excluding acquisitions); Organic segment grew 26% YoY in H1 FY26 and 29% in FY25 to reach INR 933 Cr; Convenience segment (RTE/RTC) grew at a healthy CAGR but remains loss-making due to small scale.

Geographic Revenue Split

Middle East contributes 10% of total revenue; US operations represent a significant portion with 55-60% market share in the branded Basmati segment; UK and Europe are key growth drivers following the July 2024 manufacturing facility launch.

Profitability Margins

Gross profit reached INR 3,030 Cr in FY25; Operating margins moderated slightly to 12% in FY25 from 12.5% in FY24 due to higher freight costs; PAT has sustained a 5-year CAGR of 21% through FY25.

EBITDA Margin

EBITDA margin was 11.4% in Q2 FY26, down 60 basis points from 12% in Q2 FY25, primarily due to increased brand investments and digitalization costs; FY25 consolidated EBITDA margin stood at 12.1%.

Capital Expenditure

Acquisition of Global Green Kft in Hungary for an Enterprise Value of approximately EUR 25 million (INR 225 Cr approx.) to expand into the EUR 15 billion European processed canned food market; UK manufacturing facility commissioned in July 2024 to serve top grocery retailers.

Credit Rating & Borrowing

CRISIL rating of AA-/A1+ with a positive outlook as of July 2025; Ind-Ra rating reflects low net leverage of 0.5x to 0.6x; Company issued INR 25 Cr in Commercial Papers in June 2024.

⚙️ Operational Drivers

Raw Materials

Basmati paddy, non-Basmati rice, organic soybeans (representing INR 50 Cr sales for ESL), lentils, chickpeas, kidney beans, and spices like turmeric and cumin.

Import Sources

Sourcing is diversified across India, Thailand, Myanmar, Africa (Uganda for organic soya), and Turkey to mitigate regional supply shocks and regulatory shifts.

Key Suppliers

Deep-rooted relationships with Indian farmers and Organic Farmer Producer Organisations (FPOs); procurement also involves international sources in Thailand and Africa.

Capacity Expansion

Current milling capacity of 123 tonnes per hour in India and 8 tonnes per hour in Europe; expansion includes a third manufacturing hub in Hungary via the Global Green Kft acquisition.

Raw Material Costs

Raw material costs are subject to agro-climatic risks and seasonality; Basmati requires 12-18 months of aging, leading to high inventory carrying costs; reliance on borrowings for working capital reduced to less than 20% in FY25.

Manufacturing Efficiency

Digital transformation aims to drive 1.5x to 2x business value; parboiling, aging, and milling units are certified under FSSC 22000 and BRC standards for global compliance.

Logistics & Distribution

Distribution network includes 1,400+ distributors and 195,000+ outlets in India; freight cost increases in FY25 caused a 50 bps margin compression, though costs have since stabilized.

📈 Strategic Growth

Expected Growth Rate

16%

Growth Strategy

Achieving growth through 'LT Foods 3.0 Vision' focusing on premiumization, expanding into the Middle East and Far East, and inorganic growth like the EUR 25 million Global Green acquisition; targeting +14% EBITDA margins within 4 years.

Products & Services

Branded Basmati rice, Jasmine rice, organic pulses, oilseeds, spices, and Ready-To-Eat (RTE) / Ready-To-Cook (RTC) meals like Quick Cooking Red and Black rice.

Brand Portfolio

Daawat, Royal, Devaaya, Rozana, Heritage, Golden Star, and Chef’s Secretz.

New Products/Services

Launched Daawat Quick Cooking Red Rice and Black Rice; expansion into the EUR 15 billion European canned food market via Global Green Kft acquisition.

Market Expansion

Opening a subsidiary and office in Saudi Arabia to capture Middle East demand; expanding UK private label presence with 4 of the top 5 grocery retailers.

Market Share & Ranking

Holds 55-60% market share in the US branded Basmati market; leading position in the global Basmati and specialty rice industry.

Strategic Alliances

Partnership with SALIC (FII holding 9.2% stake); acquisition of 100% stake in Golden Star to consolidate US market leadership.

🌍 External Factors

Industry Trends

Shift toward sustainable and organic food (Organic segment grew 26%); rising demand for convenience (RTE/RTC); industry is evolving toward digital supply chains and seed-to-shelf traceability.

Competitive Landscape

Competes in the global specialty rice and organic food market; maintains leadership through premiumization and a robust distribution network of 1,400+ distributors.

Competitive Moat

Moat built on 70+ years of industry experience, strong brand recall (Daawat/Royal), and a massive aging infrastructure that competitors cannot easily replicate; sustainability is reinforced by ESG initiatives and FPO networks.

Macro Economic Sensitivity

Sensitive to global food inflation and trade policies; revenue grew 12% in FY25 despite geopolitical volatility, showing resilience in non-discretionary food categories.

Consumer Behavior

Increasing consumer preference for health-oriented and convenience-seeking products, driving the launch of quick-cooking specialty rice varieties.

Geopolitical Risks

Susceptible to trade restrictions and export regulations; currently managing a 340% US countervailing duty case and Indian government restrictions on non-Basmati exports.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent international food safety standards (FSSC 22000, BRC, ISO); impacted by US Department of Commerce 'adverse facts available' methodology in duty assessments.

Environmental Compliance

First Indian food company to receive the CII Food Safety Award; implementing blockchain-based traceability and climate-resilient farming training for FPOs.

Taxation Policy Impact

Effective tax rates not specified, but the company adheres to Ind AS; dividend distribution is governed by a formal policy linked to SEBI Regulation 43A.

Legal Contingencies

Pending final determination (expected Nov 17, 2025) on a 340% countervailing duty (INR 170 Cr) levied by the US Department of Commerce against subsidiary Ecopure Specialities Limited.

⚠️ Risk Analysis

Key Uncertainties

Final verdict on US CVD could impact organic segment profitability; rainfall variability in Haryana and Punjab (1-1.5% output growth) affects raw material availability.

Geographic Concentration Risk

Diversified across 80+ countries, but US and India remain primary revenue hubs; Middle East accounts for 10% of revenue.

Third Party Dependencies

High dependency on farmer networks and FPOs for organic sourcing; sourcing diversified across Thailand and Africa to reduce single-country regulatory risk.