According to InvestingIndia, the Other Agricultural Products industry in India plays a vital role in the nation’s economy, contributing significantly to agricultural exports, which reached $50.2 billion in FY 2022-23. The sector encompasses diverse products, with an estimated production of 395.93 lakh tonnes of oilseeds and 352.23 million tonnes of horticultural produce in 2023-24.
With a market capitalization of Rs 13,324.10 crore, the shares of LT Foods Ltd were trading at Rs 383.70 per share, decreasing around 1.72 percent as compared to the previous closing price of Rs 390.40 apiece.
Brokerage Coverage:-
One of the well-known brokerages in India, Motilal Oswal, gave a ‘Buy’ call on the FMCG stock with a target price of Rs 520 apiece, indicating a potential upside of 36 percent from Friday’s price of Rs 383.70 per share.
Brokerage Rational:-
As per the brokerage, the company has transformed Indian rice from a loose commodity to a branded product with notable brands like Daawat and Royal, with a market share of 30 percent in India and 50 percent in the US, LT Foods has diversified into organic foods and aims for double-digit growth.
Brokerage also added that basmati rice comprising only four percent of India’s domestic consumption, drives significant export revenue. Therefore, LT Foods, being the key Indian player, stands to gain with increasing penetration of basmati rice globally.
Moreover, the company has logged a 17 percent CAGR in international revenue growth over FY19-24. Its strategic boost in the US and Europe drives growth, while the Middle East has revived with a noticeable 26 percent surge in FY24.
Furthermore, the brokerage is expecting that the company to record a revenue/EBITDA/PAT CAGR of 14%/15%/19% respectively over 5 years.
Prominent investor Mukul Agrawal holds 40,00,000 equity shares which is equivalent to 1.08 percent in the company, as of September 2024.
Financial Performance:-
Examining the company’s financial performance, revenue magnified by 7 percent from Rs 1,978 crore in Q2FY24 and Rs 2,108 crore in Q2FY25, during the same time frame, net profit plummeted by 4 percent from Rs 157 crore to Rs 151 crore.
Strategic Initiatives:-
LT Foods is expanding into international markets, especially in the U.S. and Europe, driving notable revenue growth. The company is investing in brand building and marketing to boost market presence and develop new health-focused product lines to align with changing consumer preferences.
Company profile:-
LT Foods Limited is engaged in the specialty rice and rice-based foods business. The Company delivers its products in approximately 65 countries across India, the United States, Europe, the Middle East, the Far East, and the Rest of the World.
Written by:- Abhishek Singh
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