L T Foods

LT Foods reported its highest ever quarterly revenue of ₹2,501 crores, a 20% year-on-year (YoY) increase, and EBITDA of ₹302 crores, up 17% YoY. This robust growth was driven by increasing consumer demand, strong brand preference, entry into new markets, and improved supply chain efficiency. Despite this, the EBITDA margin saw a slight dip of 30 basis points (bps) to 12.1% from 12.4% in Q1FY25, primarily due to increased strategic investments in brand building.

The Basmati and Other Specialty Rice segment demonstrated strong performance with an 18% growth. The organic business reported a remarkable 32% growth, which normalizes to 18% when excluding the impact of soya meal exports. The snacking segment, under the Kari Kari brand, also experienced significant growth of 40% YoY. Conversely, the Ready-To-Heat (RTH) and Ready-To-Cook (RTC) segment saw a decline in revenue due to the discontinuation of Daawat Sehat, a fortified rice product that did not achieve desired consumer traction.

North America, contributing 43% to overall revenue, grew by 32% YoY, normalizing to 18% after accounting for the Golden Star acquisition. The Royal brand maintains a dominant position with a 54% share in basmati rice imports in the region. European Continental, representing 18% of revenue, achieved a 57% YoY growth, normalizing to 24% after the UK plant became fully operational. India, contributing 31% of revenue, recorded a 10% YoY growth, with Daawat's household reach expanding to 56.2 lakh homes. The Middle East experienced a 33% degrowth due to the strategic discontinuation of non-core private label business, with branded sales showing growth.

The 30 bps decline in EBITDA margin to 12.1% was primarily attributed to increased brand investments, which led to a 1.2% increase in SG&A as a percentage of revenue. Furthermore, the gross margin deteriorated by 200 bps quarter-on-quarter (QoQ), mainly due to a shift in the product mix within the organic segment, specifically higher exports of lower-gross-margin soya meal. Management aims to maintain an EBITDA margin between 12.5% and 13% and expects brand spend to be 3% to 4% of revenue.

LT Foods completed the acquisition of the remaining 45% stake in Golden Star in May 2025, solidifying its position as the #1 Jasmine rice brand in the U.S. The company is also in the process of acquiring an additional 21% stake in Leev, aiming to leverage its new B2C plant for value-accretive growth. Management projects a PAT growth CAGR of 21% and an EBITDA growth CAGR of 16%, with Return on Capital Employed (ROCE) expected to exceed 23% in the coming year, driven by efficient capital deployment.

India continues to be the largest producer and exporter of basmati rice, contributing approximately 90% of the global supply, with the category growing at a steady 7-8% CAGR. Management anticipates paddy prices for FY26 to be roughly 8-10% higher on average compared to last year. An ongoing litigation concerning a CVD notice for soya meal is progressing, with the company having filed a rebuttal and expecting a decision by October end. LT Foods emphasizes its well-diversified geographical presence as a key de-risking strategy against macroeconomic fluctuations.