Concall AI

L T Foods — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

LT Foods delivered robust revenue growth in Q3 and 9MFY26, driven by strong performance in its core Basmati business and significant expansion in Europe. While margins faced compression due to increased brand investments and rising input costs, the company maintained its double-digit growth trajectory and expanded market reach. Challenges include the non-approval of a key acquisition and higher paddy prices, but management remains confident in its strategic direction and ability to pass on costs.

Highlights

9MFY26 Revenue of INR8,085 crores, up 24% YoY.
Q3FY26 Revenue of INR2,812 crores, up 23% YoY, highest ever quarterly revenue.
9MFY26 EBITDA of INR936 crores, up 20% YoY.
Europe segment achieved 35% YoY growth, contributing 16% of consolidated revenue.
Daawat household reach increased from 45.56 lakh homes (March 2023) to 58.11 lakh homes (September 2025).

Concerns

9MFY26 EBITDA margin at 11.6%, down 30 bps from 11.9% in 9MFY25.
PAT margin compressed from 6.39% to 5.6% YoY.
Ready-to-heat and ready-to-cook segment experienced 4% YoY degrowth in 9MFY26.
Acquisition of Hungary-based Global Green Group not approved by the Ministry of National Economy.
Basmati paddy crop 2025 yields fallen short of projections, leading to higher price levels.

Key financials

2 periods

Q3 FY26

Revenue
₹2,812 Cr
YoY +23%
Normalized Revenue Growth
8%
EBITDA
₹317 Cr
YoY +20%

9M FY26

Revenue
₹8,085 Cr
YoY +24%
Normalized Revenue Growth
12%
EBITDA
₹936 Cr
YoY +20%
EBITDA Margin
11.6%
YoY -0.3%
PAT Margin
5.6%

What they filed

Q1 FY27: revenue up 11.5%, net profit up 89.2% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,016	1,044	971	1,051	1,017 +0%	1,063 +2%	910 −6%	1,172 +12%
Expenses	963	980	910	995	956	962	836	1,056
EBITDA	53	64	61	55	60 +13%	101 +58%	75 +23%	116 +111%
Margin	5%	6%	6%	5%	6%	10%	8%	10%
Other income	33	28	7	11	40	7	29	4
Interest	3	6	7	6	5	8	8	11
Depreciation	10	10	11	10	11	11	13	14
Profit before tax	74	77	50	50	85 +15%	89 +16%	83 +66%	94 +88%
Tax rate	17%	19%	23%	26%	16%	25%	17%	26%
Net profit	61	62	38	37	71 +16%	66 +6%	69 +82%	70 +89%
EPS	1.76	1.79	1.10	1.07	2.05	1.91	1.99	2.02

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Basmati and other specialty rice
26% Revenue Growth (9M FY26)12% Normalized Growth (9M FY26)88% Share of Consolidated Revenues
Organic segment
15% Revenue Growth (9M FY26)
Ready-to-heat and ready-to-cook segment
-4% Revenue Degrowth (9M FY26)
North America
46% Share of Revenue12% Normalized Growth
India
29% Share of Revenue10% YoY Growth23.5% Market Share (Brands collectively)
Europe
16% Share of Revenue35% YoY Growth
Middle East and rest of world
9% Share of Revenue₹35 Cr Branded Revenue from Saudi Arabia

Capital allocation

high confidence

Debt Net ₹1,180 Cr

So our net debt excluding the FDR that we have kept for the insurance claim is almost INR1,180 Crores
M&A Global Green Group Acquisition · Abandoned

Ministry of National Economy Hungary has not approved the proposed acquisition on grounds of identified national, economical and sectoral risks.

With regard to our acquisition of Hungary-based Global Green Group, Ministry of National Economy Hungary has not approved the proposed acquisition on grounds of identified national, economical and sectoral risks.
Liquidity Liquidity disclosed INR260 crores insurance claim received but held against a bank guarantee (FDR) due to ongoing legal proceedings.

Correct. So that is INR260 crores, yes, we have received that amount. But against that, we had to give a bank guarantee. So still it is -- it cannot be utilized. So we have given a margin against that -- the amount received. So it is in the form of FDR.

Guidance & targets

Revenue

Overall Revenue Growth Revenue · next year · High confidence Double-digit growth

So the guidance we have given is the double-digit growth on the revenue side, that looks intact.

— Ashwani Arora
UK Revenue Revenue · in 5 years · High confidence GBP100 million

From GBP45 million today

No, that is the U.K. No, the U.K. is at the moment is 45 million. That is the projection for the U.K., not the complete Europe. So we have separated U.K and the EU, the Continental Europe separate.

— Ashwani Arora
Additional Revenue from New US RTH Capacity Revenue · future · Medium confidence $20 million

I can give you a ballpark number is $20 million revenue will be more, yes.

— Ashwani Arora
Additional Revenue from New Regional Rice Packing Unit Revenue · future · Medium confidence INR200 crores

So roughly I will say, INR200 crores more.

— Ashwani Arora

Profitability

ROCE Profitability · future · High confidence 23%

From 20% today

The goal we have given but advise that on the ROCE terms, we are in the range of 20%, and we wanted to move 23%.

— Ashwani Arora

Market Share

Middle East Revenue Growth Market Share · future · High confidence 20% year-on-year

And we wanted to grow 20% year-on-year from the base we have.

— Ashwani Arora

Segment Profitability

RTH/RTC EBITDA Breakeven Segment Profitability · next 3 years · High confidence INR400 crore revenue mark

As regarding the breakeven, the breakeven from a current level, once it crosses the INR400 crore mark, there will be a breakeven in the EBITDA. So till that time, we will be in the investment phase and there will be the investments that will be required. And we are optimistic to achieve in the next 3 years.

— Sachin Gupta

Capacity

New US RTH Capacity Capacity · next financial year · High confidence 15 million pouches

But as far as our RTH business, the bigger business is in U.S.A. And as explained in the last call also, we have built up the next capacity, which is 15 million pouches, and that will be started in the next financial year.

— Ashwani Arora

What to watch in Q4 FY26

CVD Duty Determination for Ecopure

next quarter

Current Final determination expected by February 17, 2026

Target Final determination announced

Why it matters

Resolution of this duty impacts the subsidiary's operations and financial outlook.

The final determination was earlier expected by November 17, 2025. However, due to U.S. government shutdown, the time lines have been further extended and is now expected by February 17, 2026.

Risks & concerns

Input Cost Inflation (Basmati Paddy)
medium

Basmati paddy crop 2025 yields fallen short of projections due to weather, leading to higher price levels (7-8% consolidated price rise).

Management acknowledged
Input Cost Inflation (Jasmine Rice)
medium

Jasmine rice prices have gone up by around 20%, impacting Golden Star's PBT margin by 2.5%.

Management acknowledged
Consumer Demand Slowdown
medium

Impact on consumer demand due to increased basmati rice prices and input costs; a slight slowdown observed in the mainstream market in January.

Management acknowledged
CVD Duty Determination Delay
medium

Final determination for CVD duty on Ecopure Specialties Limited extended to February 17, 2026, due to U.S. government shutdown.

Management acknowledged
Acquisition Non-Approval
medium

Proposed acquisition of Hungary-based Global Green Group not approved by the Ministry of National Economy due to national, economical, and sectoral risks.

Management acknowledged
Geopolitical Disruption
low

Geopolitical disruption is causing temporary pressure on PAT margins, but management believes fundamentals are strong.

Management downplayed

Q&A highlights

6 direct

Tariff Pass-on and Consumption Impact in US Partial

So as far as consumption is concerned in January, we are seeing a little bit slowdown in the mainstream. But that will be more clear in JFM because sometimes people buy before the price increase. So I think in this quarter, the things will be more clear that how it is impacting the consumption.

Analyst questioned the effectiveness of tariff pass-on and potential demand destruction, with management acknowledging a recent slowdown but deferring full clarity to the next quarter.

Asked by Pradyumna Choudhary

Organic Segment Q3 Decline Partial

So this is also because of the seasonality in the business. And since we have sometimes stocked the material here and switch from old crop to new crop, and that's the only situation. So there is no decline as such in the -- if you look at it on an overall annual basis. We'll be back on the track when you look at the full year basis.

Analyst questioned the decline in the organic segment despite new European capacity, and management attributed it to seasonality and crop switching, reassuring about annual growth.

Asked by Meet Jain

RTH/RTC Breakeven Timeline and Strategy Direct

As regarding the breakeven, the breakeven from a current level, once it crosses the INR400 crore mark, there will be a breakeven in the EBITDA. So till that time, we will be in the investment phase and there will be the investments that will be required. And we are optimistic to achieve in the next 3 years.

Analyst probed the negative EBITDA of the RTH/RTC segment, and management provided a clear revenue target and timeline for breakeven, indicating it's an investment phase.

Asked by Rehan Saiyyed

Middle East Market Share and Growth Strategy Direct

That's a big market, and we have not in terms of market share. But I can tell you in UAE, we have around 10% market share in the premium end of the market. Saudi, we have started, we are getting very good response. The market is growing. So overall, Middle East, we are bullish. We are investing on that. And we wanted to grow 20% year-on-year from the base we have.

Analyst sought specific market share data for the Middle East, and management provided insights into their premium segment share in UAE and their bullish growth targets for the region.

Asked by Pranav Bhootra

Golden Star PBT Margin Decline Direct

This is attributable primarily to Jasmine rice prices increasing. Correct. The input costs going up. So that resulted as Ashwani in the initial talked about the Jasmine input cost being increased.

Analyst questioned the 2.5% decline in Golden Star's PBT margin, and management directly attributed it to increasing Jasmine rice input costs.

Asked by Damodaran

Insurance Claim Status and Utilization Direct

Vipul, we have won the case in the first court. Then they have gone to High Court. And High Court said we will only hear you when you will give them the money. And then they went to Supreme Court. Supreme Court said give the bank guarantee and take the money. So we have taken the money, but we have given the bank guarantee against the FD, the same amount. Hopefully, we will get verdicts in the coming 2-3 months from the High Court, which is pending there.

Analyst sought clarity on the INR260 crore insurance claim, and management provided a detailed update on the legal status, explaining why the funds are currently held against a bank guarantee.

Asked by Vipulkumar Shah

PAT Margin Compression and Outlook Direct

Aman, the pressures are temporary, the pressure is because of all this disruption geopolitically. The goal we have given but advise that on the ROCE terms, we are in the range of 20%, and we wanted to move 23%.

Analyst questioned the PAT margin compression, and management clarified it as temporary due to geopolitical factors, reiterating strong fundamentals and ROCE targets.

Asked by Aman Goval

US RTH Capacity Revenue Potential Direct

I can give you a ballpark number is $20 million revenue will be more, yes.

Analyst asked for the revenue potential of the new US RTH capacity, and management provided a specific ballpark figure, giving investors a quantifiable future impact.

Asked by Harsh Shah

2 min read 6 chapters

Detailed narrative

Robust Revenue Growth Driven by Core Basmati and European Markets

LT Foods reported a record 9-month revenue of INR8,085 crores, marking a 24% YoY growth, with Q3 FY26 revenue reaching INR2,812 crores, up 23% YoY. The Basmati and other specialty rice business, contributing 88% of consolidated revenues, delivered a 26% YoY growth. Geographically, Europe showed exceptional performance with a 35% YoY growth, while North America, accounting for 46% of revenue, achieved a normalized growth of 12%.

Margin Compression Amidst Brand Investments and Rising Input Costs

Despite strong top-line performance, the 9MFY26 EBITDA margin stood at 11.6%, a 30 basis point decline from 11.9% in 9MFY25. PAT margin also compressed from 6.39% to 5.6% YoY. Management attributed this to increased brand investments, strategic initiatives, and rising input costs, with Basmati paddy prices up 7-8% and Jasmine rice input costs increasing by approximately 20%, impacting the Golden Star segment's PBT margin by 2.5%.

Strategic Market Penetration and Brand Expansion

The company successfully expanded its market reach, with Daawat's household penetration in India growing from 45.56 lakh homes in March 2023 to 58.11 lakh homes by September 2025. In the U.S., the Royal brand maintains a dominant 60% market share in the Basmati rice segment. LT Foods is also focusing on the premium end of the regional rice market in India, generating approximately INR200 crores in annual sales, and is bullish on the Middle East with a target of 20% YoY growth.

RTH/RTC Segment in Investment Phase with Future Growth Plans

The Ready-to-Heat and Ready-to-Cook segment experienced a 4% YoY degrowth in 9MFY26. However, management views this as an investment phase, particularly for the larger U.S. RTH business. A new capacity of 15 million pouches is set to commence operations in the next financial year, projected to contribute an additional $20 million in revenue. The company aims for this segment to achieve EBITDA breakeven at the INR400 crore revenue mark within the next three years.

Acquisition Setback and Pending Regulatory Determinations

A significant M&A initiative faced a setback as the proposed acquisition of Hungary-based Global Green Group was not approved by the Ministry of National Economy due to national, economical, and sectoral risks. Furthermore, the final determination for the CVD duty concerning Ecopure Specialties Limited, initially expected in November 2025, has been extended to February 17, 2026, due to U.S. government shutdown, prolonging regulatory uncertainty.

Debt Management and Insurance Claim Status

The company reported a net debt of approximately INR1,180 crores, excluding an FDR related to an insurance claim, indicating a year-on-year reduction in debt. An insurance claim of INR260 crores has been received but is currently held against a bank guarantee (FDR) due to ongoing legal proceedings. Management expects verdicts from the High Court within the next 2-3 months, which would allow for the utilization of these funds, currently earning interest but not recognized in income.

This is an AI-generated summary of a publicly available earnings call transcript.

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