Refer investor presentation or go through conference call transcript
Detailed information is provided
Hi Aadesh,
Can you please provide more info about the LTfoods Soya products + Oil seeds business? What is the size of revenue? I could not get much information from concall.
Have to dig back 2 years back concall
But organic buisness degrowth in usa is solely because of anti dumping duty on soy
I will check if I get something useful will post here
Meanwhile information about anti dumping duty
On 27 April 2021, the United States initiated an antidumping investigation on imports of organic soybean meal from India. The products subject to investigation are classified under HS code subheadings 1208.10, and 2304.00. Notably, on the same day, an anti-subsidy investigation on the subject good was initiated, see related state act.
On 2 November 2021, the United States imposed a provisional antidumping duty on imports of the subject good from India. The rate of duty on imports from India ranges from 3.11% to 18.85% of the net free-at-frontier price before duty depending on the company.
On 16 May 2022, the United States imposed a definitive antidumping duty on imports of organic soybean meal from India. The rate of duty on imports from India ranges from 3.07% to 18.80% of the net free-at-frontier price before duty depending on the company.
2 Likes
Few important points from credit rating
(nov 2024)
1…Increasing market share in india
=Market share in india is of around 31% as of September 2024 (September 2023: 30%, FY22: 27%) and is the largest-selling basmati brand in the US with more than 50% market share in FY24 (FY23: 50%)
=The company’s market share in India has increased over the past few years (FY24: 30%, FY22: 27%, FY16: 14%)
2…Limited diversification
A…Basmati rice(87%)
=Basmati rice continued to command a dominant revenue contribution at 87% in FY24 (FY23: 81%; FY22: 79%; FY21: 86%).
B…Heath and organic(10%)
=The health and organic segment contributed around 10% to the overall revenue in FY24
=The organic business revenue declined to INR7.2 billion in FY24 (FY23: INR7.8 billion) due to anti-dumping duty on organic soya imports in the US. LTF is currently catering to other products under this segment which include organic rice, pulses, oil seeds, cereal grains, spices and nuts
C…Convinience food products(3%)
=The company also has a focus to increase its share of convenience food products, which despite being a small business, expanded at a CAGR of 45% over FY19-FY24 and currently contributes to around 3% to the consolidated revenue.
= The portfolio consists of ready to heat rice, ready to eat and biryani kit, kàari kari, among others, most of which have been launched in the last three-to-four years.
=While profitability from the business is low because of the low volume, the segment has a high margin potential, which would be gradually realised as the company establishes its brand and increases its sales.
3…Stable Ebitda margin
=The EBITDA margins ranged between 10.5% and 12.5% during FY14-FY24 (FY24: 12.6%; FY23: 10.6%; FY22: 11.2%) with the company’s ability to pass on fluctuations in raw material prices.
=The volatility has been lower in margins majorly because basmati rice is relatively inelastic as a commodity.
= The decline in its margins in 1HFY25 was due to increased freight costs on account of the red sea impact.
4…Capex
=Company plans to incur capex of INR 2 billion-2.5 billion annually in addition to investments for acquisition of additional stake in subsidiaries/joint ventures
5…Planned Simplification of Group Structure:
=In August 2024, LTF proposed to acquire a 17.5% stake in India Agri Business Fund II in Nature Bio Foods Limited for INR1,100 million by December 2024. Post the acquisition, Nature Bio Foods will become a 100% subsidiary of LTF.
=Further, the management is exploring plans to merge some of the Indian subsidiaries into its immediate parent to simplify the group structure.
Disc…invested since 2018
-Seen high volatility in share price from Rs 13 during corona time to
Rs 447
-Average buy price is Rs 56.
Initial buy was at Rs 95 and then subsequent buy upto Rs 20 during its downtrend journey .
11 Likes
Have you guys checked SHP
FII and DII both increased stake
Public shareholding decreased
In fact it’s been at 5 year low
Also another inevstor meet
Company is regularly conducting this meet so stock is gaining traction
With considerably cheap valuation compared to overheated market
We might see significant buys from mf going ahead
Just my view and outside take
6 Likes
Bandhan mutual fund increased LT foods in November but there is barely any other mutual funds which owns it. Given that public shareholding is dropping, i think this is a very good sign
4 Likes
Hats off to ur investor mindset…its very difficult to achieve this. Its a feather in ur cap…currently the technical chart reveals the pattern of inverted head and shoulder and also trying to break out from the base formation…The product mix also good wen compared to KRBL. Currently the price of Rice is also falling which will be an advantage for this Company.
1 Like
Latest updates from LT foods.
3 Likes
How do we monitor rice prices - is there a website that tracks historical and current prices
Hi…Jaihind…I have come across about the hike in price through one of the reports due to high demand and the Geo tagging of Basmati rice For India and Pakistan through SOIC.in webinar. The price raise can be monitored for Rice through https://www.ncdex.com/products/PADYPB1121… but don’t know how much it will help you.
But for chemical raw materials, u can monitor the price through tijori website for free.Market Monitor | Tijori Finance.
These three links below, can help you to see the change in the price from $950 to $
1055 per ton
3 Likes
There are many website who posts daily traded prices in mandi. This is one example Paddy(Dhan)(Basmati) Price Today in Punjab - Latest Market Rates & Trends
4 Likes
Considering how small caps been butchered in recent time
Lt foods performance has been good
It’s just 10% down from all time high
Also it means no pe de rating as of now
Even after soft results last qtr
Now next week results are vvimp
If it gets back on track
We all are good
Let’s hope lt foods delivers good numbers
Ocean freight rate has decreased so expecting marginally better opm
9 Likes
yes i have gotten them from screener
Attended conference calls
Highlight is you have to wait till sept qtr to see positive impact of raw material pricing and decreased freight cost because
Also marginal decrease for freight cost in Europe will be seen in next qtr
Topline growth is good
Needless to say I will remain invested cause uk facility saudi facility usa factory all will become operational till June and margin expansion in sept qtr
Tbh I don’t expect any fireworks as of now (on both side 
)
15 Likes
Thats all is needed to know
Thanks a lot for your quick drop of concall highlights 
What are odds of Trump imposing tariffs on Basmati exports to US?
1 Like
That need to be seen
Commodities and eatables are least likely To come under tariff as it’s day to day consumables but yes trump is mad man
And there is always element of uncertainty
3 Likes
can anyone tracking this business answer following questions ?
- operating margins remained constant for years now , which suggests that the company was and is able to pass on the raw material price hikes to consumers , which concludes that the business is not a commodity but a branded value added business, then why for years it was trading in sub 10 PE range ?
- are the current valuations unsustainable? because if i check the history , when company had more than 20PE in 2018 , it saw a stagnant market cap till next 4 years , so is 20PE for this business expensive ?
- is it still a commodity stock ? or do it look like a branded play as we are still in a positive commodity cycle ?
- what effects will this business have if gov. re-introduces farm laws ?
i started to track the business recently and was amazed to see a branded , High ROCE, stable margin, free cash flow generating and growing business valued at sub 110-15PE for years !
3 Likes