LT Foods Limited has received a significant credit rating upgrade from CRISIL Ratings Limited, with its long-term rating enhanced to 'Crisil AA/Stable' from the previous 'Crisil AA-/Positive'. The rating agency also reaffirmed the company's short-term rating at 'Crisil A1+' on February 25, 2026.

Rating Action Details

The upgraded ratings apply to LT Foods' total bank loan facilities worth Rs 880 crore. This rating enhancement reflects the sustained improvement in the company's business risk profile and strengthened financial position.

Strong Financial Performance

The LT group demonstrated robust financial performance with operating income of Rs 8,039 crore in the first nine months of fiscal 2026, compared to Rs 6,453 crore in the corresponding period of the previous fiscal. The company is expected to achieve revenue of Rs 10,500-11,000 crore for full fiscal 2026, backed by increased sales through the basmati and specialty rice segment and organic segment.

Business Strengths and Market Position

CRISIL highlighted several key strengths that supported the rating upgrade:

• Established Market Leadership: Seven decades of experience in the rice industry with strong market position as a top player in the domestic basmati rice industry
• Global Presence: Operations across 80 countries with manufacturing units in India, US, Europe, UK and Africa
• Strong Brand Portfolio: More than 10 brands including flagship brands Daawat and Royal with high brand recall
• Extensive Distribution Network: Over 1,400 distributors and more than 1,95,000 retail outlets in India, plus over 100 international distributors

The group generates majority of its revenue (70% in fiscal 2025 and 73% in the first six months of fiscal 2026) from exports, with the US and European markets commanding leading positions.

Financial Risk Profile

The company maintains a strong financial risk profile with expected debt to EBITDA ratio of 0.6-0.7 times as on March 31, 2026, compared to 0.7 times as on March 31, 2025. Networth is expected to be Rs 4,300-4,400 crore as on March 31, 2026, up from Rs 3,765 crore as on March 31, 2025, driven by healthy accretion to reserves.

Operational Highlights

The group reported operating margin of 11.6% in the first nine months of fiscal 2026, with operating margins expected to be 12-13% in the near term. The company has successfully passed on the 50% tariff to its customers in the US, which account for approximately 46% of overall revenue in the first six months of fiscal 2026.

Outlook and Rating Sensitivity

CRISIL maintains a stable outlook, believing the LT group will continue to benefit from its established market position, strong brands and diverse geographical presence. The rating agency noted that upward factors include steady revenue growth and sustained operating margins of 12-13%, while downward factors could include substantial decline in operations or large debt-funded acquisitions that weaken the financial risk profile.

LT Foods has received significant relief in export duties for its subsidiary Ecopure Specialities Limited's organic soybean meal exports to the United States. The company disclosed this development through a regulatory filing under SEBI Regulation 30, providing updates on the countervailing duty order revision that resulted in a substantial reduction of potential liability by Rs. 163 crore.

Administrative Review Background

The development stems from an administrative review initiated by the United States Department of Commerce, International Trade Administration for the period January 1, 2023 to December 31, 2023. During this review, the US DoC had initially applied the 'adverse facts available' methodology to Ecopure, resulting in a provisional CVD rate that significantly impacted the subsidiary's export operations. Ecopure had sales of Rs. 50 crore during the January-December 2023 period under review.

Final Order Details

The US Department of Commerce issued its Final Order on February 23, 2026, bringing substantial relief to LT Foods' export operations. The countervailing duty rate applicable to Ecopure's organic soybean meal exports has been dramatically reduced through this final determination.

Regulatory Compliance and Disclosure

LT Foods has maintained transparency throughout this process, having previously informed exchanges about the administrative review initiation through communications dated June 20, 2025 and June 23, 2025. The company's latest disclosure on February 25, 2026, provides stakeholders with the final outcome of the lengthy administrative review process, highlighting the substantial financial impact of the duty reduction.

Business Impact

This substantial duty reduction enhances the competitiveness of Ecopure's organic soybean meal products in the US market. The lower duty structure, combined with the Rs. 163 crore reduction in potential liability, is expected to improve profit margins significantly and make the company's organic food products more attractive to US importers, potentially boosting the subsidiary's export performance in future periods.