L t foods update(from credit rating 2023 and one research report)
1…Performance 2022-2023
27% revenue growth
36% net profit growth
2…FUTURE FROWTH
…Segment wise Growth
a…Robust growth in basmati rice segment (+30%YoY, contributes ~83% of total revenue), supported by both volume and price growth.
b…Organic foods segment (~9% of total revenue) grew by 25%YoY and
c…Convenience & Health segment (~2.1% of total revenue) grew by 3% YoY.
A…Branding and distribution network
=LTF’s consistent efforts on strengthening the brands, widening distribution, and region
& product diversification through organic & inorganic routes have been the strategy for growth.
=LTF targets a 5Yr revenue CAGR of 10-12%, aided by continuous focus on
a…Expanding its product portfolio,
b…making investments in branding
c…and strengthening its distribution network.
=Retail outlets have increased by 9%YoY to 1.77 lakhs, which will strongly support future growth.
B…Organic food segment
= Organic business is continuing on the path of strong growth and registered a CAGR of 18% over last 4 years. Further, growth in organic business should lead to higher consolidated revenue over medium term and remains key monitorable factor.
C…LTF has recently acquired Golden Star Trading Inc. to strengthen market share in US (Jasmine rice segment, the brand has ~10% share in US
market)
D… The strategic transaction with SALIC (PIF, Saudi SovereignFund) currently holds ~9.2% stake in LT Foods (Rs.455.5cr) is expected to provide future growth plans in the MEA and Saudi Arabia regions.
E…Capex
=LTF is doing a capex of
Rs.140cr/Rs.120cr in FY24/FY25 in power generation, warehouse, and the capacity enhancement (by ~1 lakh tons)
F…Improving financial risk profile:
=LT’s group dependency on debt levels has reduced y-o-y. Group’s 80-85% of debt primarily comprises of short-term debt (working capital borrowings) required for stocking-up of paddy and seasonality in nature of business.
Disc…invested