'Buy' LT Foods Shares Maintains Motilal Oswal To Get An Upside Of 28% — Here's Why
In this report, Motilal Oswal highlights the evolving organic food industry and LT Foods' strategy to capitalize on it.
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LT Foods, known for its basmati rice brands (Daawat, Royal, et al.) both in India and globally, has another important segment, i.e., organic food and ingredients (11% of revenue in FY25). One of the early entrants in 1999, LT Foods has been in this industry for over two decades. Started as a B2B supplier, the company has recently forayed into B2C with its brand (Daawat Ecolife).
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Motilal Oswal Report
Traditionally a basmati rice company, LT Foods Ltd. has evolved into a multi-product FMCG player with early entry into the organic segment. With healthy growth in the rice business, the organic segment is expected to grow at a much faster pace, led by increasing adoption of healthy and conscious food habits among individuals. This will also aid in improving the overall margin profile of the company going ahead.
The organic business has delivered 12%/16% revenue/Ebitda CAGR over the last four years, and we expect 22%/24% CAGR over FY25-28, thereby improving its revenue share to 13% by FY28 vs 11% in FY25.
We expect LT Foods to report a CAGR of 15%/20%/24% in revenue /Ebitda/PAT over FY25-27.
We value LT Foods at 21x FY27E EPS to arrive at our target price of Rs 600. Reiterate Buy.
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