LT Foods Limited , a leading player in the basmati rice industry, has received a significant boost to its credit profile. India Ratings and Research (Ind-Ra) has upgraded the company's long-term bank loan facilities rating to 'IND AA/Stable' from 'IND AA-/Stable', reflecting the company's strengthened business profile and robust financial performance.

Key Highlights

• Rating Upgrade: Long-term bank loan facilities rating upgraded to 'IND AA/Stable' from 'IND AA-/Stable'
• EBITDA Growth: Consolidated EBITDA surpassed INR 10 billion
• Margin Improvement: EBITDA margins improved to 12%
• Market Position: Strong 55-60% share in the US basmati rice market
• Financial Profile: Conservative financial profile with net leverage below 1.0x

Financial Performance

LT Foods has demonstrated consistent growth in its operations, particularly in its core basmati rice business. The company's financial metrics show significant improvement:

The company's EBITDA has shown a remarkable two-year CAGR of around 20%, driven by business expansion and improved operational efficiency.

Market Position and Business Strengths

LT Foods has cemented its position as a dominant player in the basmati rice market:

• US Market: Commanding a 55-60% share in the US basmati rice market
• Brand Portfolio: Strong presence with brands like Daawat in India and Royal in the US
• Global Footprint: Operations in over 80 countries with a robust distribution network
• Product Diversification: Expanding into organic staples and convenience foods

Financial Stability

The company maintains a conservative financial profile:

• Net Leverage: Consistently below 1.0x (FY25: 0.6x, FY24: 0.5x)
• Interest Coverage: Robust at 10.3x in FY25
• Working Capital Management: Improved reliance on borrowings for working capital to less than 20% in FY25

Challenges and Outlook

While LT Foods has shown strong performance, it faces some challenges:

• US Tariffs: Potential impact from the 50% tariff imposed by the US on Indian rice exports
• Market Competition: Increasing competition in the global rice market
• Commodity Price Volatility: Exposure to fluctuations in rice prices and forex rates

Despite these challenges, Ind-Ra expects LT Foods to maintain its strong market position and financial performance. The company's diversified geographical presence and strong brand positioning are likely to help mitigate potential risks.

Conclusion

The rating upgrade reflects LT Foods' ability to consistently grow its business while maintaining a strong financial profile. With its dominant market position, especially in the US basmati rice market, and ongoing efforts to diversify its product portfolio, LT Foods is well-positioned for sustained growth in the coming years.

Investors and stakeholders can take confidence in the company's improved credit profile, which indicates its capacity to meet financial obligations and support future growth initiatives.

LT Foods Limited , a prominent player in the food industry, has announced two significant developments that may interest investors and market watchers.

Promoter Share Transfer

Ashwani Kumar Arora, a promoter of LT Foods Limited, is set to acquire 11,54,405 equity shares, representing 0.33% of the company's share capital, from fellow promoter Surinder Kumar Arora. This transfer will be executed as an off-market gift transaction without any monetary consideration. The transfer is scheduled to take place on or after November 24, 2025.

It's important to note that this inter-se transfer between promoters falls under the exemption provided by SEBI's Substantial Acquisition of Shares and Takeovers (SAST) Regulations. As a result of this transaction:

• The aggregate promoter group holding in LT Foods will remain unchanged.
• There will be a shift in individual stakes between the two promoters involved.

European Expansion

In a separate development, LT Foods has taken a strategic step to strengthen its European presence. The company has incorporated a new step-down subsidiary named "LT Foods Hungary Holdings KFT." This entity has been registered in Hungary with the company registration number 01-09-449137.

Key details of the new subsidiary:

This move appears to be part of LT Foods' strategy to expand its footprint in the European market and potentially streamline its operations in the region.

The incorporation of this new entity in Hungary could provide LT Foods with a strategic advantage in managing its European operations more effectively. It may also serve as a platform for future growth and expansion in the Central European market.

As these developments unfold, investors and market analysts will likely keep a close watch on how they may impact LT Foods' overall business strategy and financial performance in the coming quarters.