L T Foods — Q4 FY25 earnings call

Call held 24 Jun 2025

Management summary

LT Foods reported a consolidated revenue of INR 8,770 crores for FY25, with its organic business contributing 11%. The primary focus of the call was a preliminary 340% countervailing duty (CVD) imposed by the US on organic soybean meal exports for 2023, which represents a small portion (0.5%) of total revenue. Management expressed strong confidence in appealing this preliminary finding, expecting a significant reduction in the duty rate and foreseeing no material financial impact on the company's future earnings or cash flow, with potential impacts being offset by other growth initiatives.

Highlights

  • FY25 consolidated total revenue stood at INR 8,770 crores.

  • Organic business contributed INR 933 crores to revenue, making up 11% of the total.

  • Organic soybean meal exports to the USA, the product under scrutiny, generated INR 47 crores, which is a minor 0.5% of consolidated revenue.

  • Management expressed high confidence in reducing the preliminary 340% countervailing duty (CVD) to a much lower rate, potentially around 3%, after review.

  • The company anticipates no material financial impact on cash flow or future earnings, with a maximum potential impact of INR 4-5 crores that can be fully offset.

Concerns

  • A preliminary notice of 340% countervailing duty (CVD) was imposed by the US Department of Commerce on organic soybean meal exports from India for the 2023 period.

  • The subsidiary, Ecopure Specialities Ltd., received this high preliminary finding due to an 'adverse facts available' (AFA) determination, as their data could not be reviewed by the DOC.

  • A potential financial impact of INR 4-5 crores is estimated if the company were to exit the organic soybean business, though management believes this can be offset.

Key financials

  1. Consolidated Revenue ₹8,770 Cr
  2. Organic Business Revenue ₹933 Cr
  3. Organic Business % of Total Revenue 11%
  4. Soybean Export to USA Revenue ₹47 Cr
  5. Soybean Export % of Consolidated Revenue 0.5%
  6. Organic Soybean Margins 4%
  7. Other Income (Inventory Mgmt Fees) FY25 ₹50 Cr

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,016 1,044 971 1,051 1,017 +0%1,063 +2%910 −6%1,172 +12%
EBITDA53 64 61 55 60 +13%101 +58%75 +23%116 +111%
Net profit61 62 38 37 71 +16%66 +6%69 +82%70 +89%
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

  • Organic Business
    ₹933 Cr Revenue11% % of Total Revenue

Guidance & targets

Regulatory

  • Countervailing Duty (CVD) rate on organic soybean meal exports to US Regulatory · After review (within 120-130 days for final outcome) · High confidence Around 3%

    From 9.57% (current industry rate), 340% (preliminary AFA rate) today

    we consulted legal experts and concluded that we could reduce the duty to around 3% by volunteering as a respondent.

    — Rohan Grover

  • CVD applicability period Regulatory · Specific to 2023 · High confidence Only for 2023 period, not 2024 or 2025 sales
    The CVD applies only to the 2023 period. Future sales of 2024 and 2025 will be reviewed separately.

    — Rohan Grover / Ashwani Kumar Arora

Profitability

  • Material financial impact on cash flow or future earnings from CVD Profitability · Future · High confidence No material impact
    Further, would like to reiterate that we don't foresee any material financial impact on the cash flow or future earning of the businesses.

    — Ashwani Kumar Arora

  • Offset potential INR 4-5 crores financial impact Profitability · Future · High confidence Fully offset
    The financial impact, if we have to come out of the business is low. And it is limited to about INR4 crores to INR5 crores. And we are confident to offset it through our product introduction and growth into the U.S. and European market and diversifying our international sourcing and moving our soya meal operations to our Uganda operations, which could take over part of this business, depending on the crop.

    — Rohan Grover

  • Impact of Middle East turmoil on Basmati rice margins Profitability · Current financial year · High confidence No impact
    No, we don't see. This is a regular thing. Because of Iran, you know, the market is little depressive. But being a very strong brand and what we see the competitive landscape; we are hopeful that that will not impact any margin of LT Foods.

    — Ashwani Kumar Arora

What to watch in Q1 FY26

Final outcome of CVD duty on organic soybean meal exports to US

December 2025
Current Preliminary 340% CVD for 2023 period
Target Final duty rate (expected to be much lower, potentially ~3%)

Why it matters

Determines the long-term viability and profitability of organic soybean exports to the US market.

A final result is due in December 2025. And we now have an opportunity to represent our case and correct these misunderstandings.

Risks & concerns

  • Preliminary 340% countervailing duty (CVD) on organic soybean meal exports to the US for the 2023 period

    medium

    The US Department of Commerce imposed a preliminary 340% CVD on organic soybean meal exports from India for 2023, specifically affecting Ecopure Specialities Ltd. due to data review issues.

    Both acknowledged

  • Potential financial impact if organic soybean business is exited

    low

    The maximum financial impact from the CVD issue, if the company were to exit the organic soybean business, is estimated at INR 4-5 crores, which management believes can be offset.

    Management downplayed

Q&A highlights

8 direct
Soya meal export value for FY25 Direct
Yes. Thank you so much, sir, for the opportunity. So, just want to know INR47 crores is the number which is soya meal export to U.S. for FY25. Is that correct?

Confirms the specific revenue figure for the affected product, which is a small portion of total revenue.

Asked by Shivam Mittal

Applicability of CVD to Uganda facility Direct
No, CVD is not applicable on the Uganda facility. It is only from the export, from India.

Clarifies that the company has alternative sourcing/processing options not subject to the same duty, providing a mitigation strategy.

Asked by Shivam Mittal

Financial impact of 340% CVD on FY23 sales and retrospective application Direct
No, this is only for the year '23 and not to any business on '24 or '25. Rohan can explain it further. It is up to us if we wanted to.

Clarifies that the high duty is only for the 2023 period and not retrospective for future sales, limiting its financial scope.

Asked by Abhishek Maheshwari

Industry-specific vs. LT Foods specific nature of CVD Direct
Yes. So, countervailing duty is imposed on the industry as such. The Department of Commerce were able to review other companies and the mandatory respondents. And they give for every company a countervailing duty, if they are getting, based on if they are getting any subsidiaries or not. In our case, they could not review the information. And that is why they have given an AFA, which is 340%.

Explains why LT Foods received a high 340% rate (Adverse Facts Available) due to data review issues, rather than higher subsidies, indicating a procedural rather than fundamental problem.

Asked by Abhishek Maheshwari

Impact of Middle East turmoil on Basmati rice margins Direct
No, we don't see. This is a regular thing. Because of Iran, you know, the market is little depressive. But being a very strong brand and what we see the competitive landscape; we are hopeful that that will not impact any margin of LT Foods.

Reassures investors that broader geopolitical issues affecting the region are not expected to impact the profitability of a core business segment.

Asked by Vishvender Singh

Other income from inventory management fees Direct
So, actually, that is other income that we charge to one of our associate company in the US. So, that is the Golden Star. So, once it gets consolidated this year it will be getting consolidated and there will be line by line consolidation. So, this other income, there will be no other income this year and it will be getting in the normal course of the business. So, this is the income which we charge, the company charges from the associate company. That is shown in the other income.

Clarifies the nature and future accounting treatment of a significant 'other income' component, which will be consolidated.

Asked by Vishvender Singh

Applicability of CVD to other organic businesses Direct
No, it is pertaining to only that existing code of organic soybean and has no impact on any other product that we export to the US.

Confirms that the CVD issue is isolated to organic soybean meal and does not affect the broader organic portfolio, limiting the scope of the concern.

Asked by Gaurav Somani

Current duty paid on organic soybean exports to US and future applicability Direct
No, we are currently exporting to the US already, and we are paying 9.57% duty as it is for the entire industry today. ... So, whatever will be the duty that will be decided will be applicable in 2026 onwards.

Provides clarity on the current duty structure and the timeline for when the new, decided duty rate will apply to future sales, offering a forward-looking perspective.

Asked by Yash

2 min read 5 chapters

Detailed narrative

Overview of FY25 Performance and Organic Business Contribution

LT Foods reported a consolidated total revenue of INR 8,770 crores for financial year 2025. The organic business segment contributed INR 933 crores, representing 11% of the company's total revenue. Organic soybean meal exports to the USA, the subject of recent regulatory scrutiny, accounted for INR 47 crores, which is a minor 0.5% of the consolidated revenue and approximately 5% of the organic business revenue, with margins in the 4-5% range.

US Countervailing Duty on Organic Soybean Meal Exports

The US Department of Commerce (DOC) issued a preliminary notice imposing a 340% countervailing duty (CVD) on organic soybean meal exports from India for the 2023 period. This duty specifically impacts Ecopure Specialities Ltd., a subsidiary of LT Foods. The high rate is attributed to an 'adverse facts available' (AFA) finding, as the DOC could not review the company's submitted data, unlike other mandatory respondents who received a 9.57% duty.

Management's Strategy and Confidence in Mitigating CVD Impact

Management expressed strong confidence in challenging the preliminary finding, noting that the CVD applies only to the 2023 period and not to future sales in 2024 or 2025. They are engaging top US legal counsels and expect to reduce the duty significantly, potentially to around 3%, after a full review. The final result is anticipated in December 2025, with an appeal process expected to conclude within 120-130 days.

Limited Financial Impact and Offsetting Measures

LT Foods does not foresee any material financial impact on its cash flow or future earnings due to this issue. The maximum potential financial impact, if the company were to exit the organic soybean business, is estimated to be a low INR 4-5 crores. Management plans to offset this through product introductions and growth in the US and European markets, diversifying international sourcing, and potentially moving soya meal operations to Uganda.

Basmati Rice Business Stability and Other Income Clarification

Despite reports of declining Basmati rice prices due to Middle East turmoil, management stated that they do not anticipate any impact on LT Foods' margins, citing the strength of their brand and competitive landscape. Additionally, the company clarified that 'other income' related to inventory management fees from its US associate company, Golden Star, amounted to approximately INR 50 crores in FY25. This income will no longer be reported as 'other income' in FY26 as Golden Star will be consolidated.

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