LT Foods Ltd. share price target

Moderate Quarter with Growth Momentum in Place: LT Foods Limited has posted a consolidated revenue of Rs. 9278 Mn in Q2FY19 registering a growth of 8.8% on YoY basis mainly on brand strength, higher realization and overall strong demand scenario for basmati rice.

For Q2FY19, LT Foods Ltd (LTFLs) revenue grew 8.8% YoY largely driven by pick up in organic business (up 18%). In Q2FY19, branded business saw a muted growth of 5% YoY which was largely impacted by decline in bulk branded business (25kg pack) in domestic market. However, organic business which had a muted Q1FY19 picked up again and grew 18% supporting the overall growth of the company. 1) India branded business lost the momentum temporarily and grew 5% for Q2FY19; 2) European business is expected to do a turnover of INR1.5bn in H2FY19 and is expected to break-even by the end of FY19. Management expects European business to turn profitable from FY20 onwards; 3) Branded business contribution to the overall revenue stands at 69%; 4) In Q2FY19, company secured an equity funding of INR1,400mn from Rabobanks India India Agri Business Fund II in its wholly owned subsidiary Nature Bio Foods Ltd. We have revised our earnings estimates downwards by 4.

Robust Showing at Branded Business Front: LT Foods Limited has posted strong performance on consolidated basis in Q1FY19 wherein revenue from operations stood at Rs. 8400 Mn, up by 11.7% but down by 9.0% against our revenue estimate of Rs. 9226 Mn on YoY basis.

Mixed quarter: For 1QFY19, LT Foods Ltd (LTFL's) revenue grew 11.7% YoY largely driven by branded basmati rice segment (up 18%). EBITDA declined 2.1% with margin contraction of 156bps to 11.1%. Benefit of Lower other expenses (-341bps) was offset by higher raw material (+532bps). Lower...

Mixed Performance: The company on a consolidated basis has registered mixed performance, wherein revenue for full year FY18 has grown by 11.4%, primarily driven by branded sales whose contribution in total sales has increased to 69% from 64% in FY17.

For 4QFY2018, LT Foods Ltd (LTFL) posted results in-line with our expectations on the top-line front. However it disappointed on the bottom-line front. Revenue grew by ~15% yoy to `1,071cr, driven by healthy growth in domestic as well as international businesses. On the operating front, margins contracted by 102bps yoy on account of inves..

T Foods Ltd. (LTFL) is one of the leading basmati rice players in India having a strong foothold both in exports (55% of FY17 revenue) & domestic market (45%). Key brands include Daawat (leading brand in India), Royal (#1 brand in USA) and eco Life (organic food). With growing global demand for basmati and limited supply, we expect LTFL to witness steady volume growth with improving realizations on back of increased branded business. We forecast 12.2%/25.7% revenue/adj.PAT CAGR over FY17-20E and an EBITDA margin improvement of 127bpsto 12.5%. We initiate coverage with a BUY rating valuing the stock at12x FY20E EPS of INR10.4 with target price of INR125

Stronger Performance Persists: The company recorded consolidated revenue growth of 19.1% in Q3FY18 on YoY basis, on account of strong growth in branded business which grew in value terms by 12% in domestic market and 23% ininternational market on YoY basis. Launch of new operations in Rotterdam and higher marketing expends led to deterioration in EBITDA margins by 271 bps on YoY basis.

For 3QFY2018, LT Foods Ltd (LTFL) posted results in line with our expectations on top-line and bottom-line fronts. Revenue grew by ~19% yoy to `941cr, driven by healthy growth in domestic as well as international businesses. On the operating front, margins contracted by 275bp yoy due to loss of `10cr in European operations and one-time ba..

Stronger Quarter with Improved Margin: LT Foods Ltd has delivered strong set of consolidated numbers having recorded revenue in Q2FY18 at Rs.8531 Mn as against Rs.8290 Mn in Q2FY17 registering growth of 2.9% on YoY basis. The shares of basmati, organic and private label businesses as % of total revenue are on rise which stand at 62.0%, 10.0% and 18.0% respectively.