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LT Foods Zoom Over 2% on Robust Earnings; Gains Market Share!

19 May 20234 mins read by Angel One
One of the primary indicators of a company’s strength is the ability of its management to engage itself in continuous and relentless market share capture.
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The Indian benchmark indices were seen trading flat, however, one stock which has seen grabbing attention of the market participants is LT Foods Ltd. The stock is trading higher by over 2% amid robust earnings.    

Q4 FY23 and FY23 Performance:   

In Q4FY23 revenue of the company was up by 19% YoY aided by accelerated brand investments and scaling of distribution across all 3 business segments- Basmati & Other Specialty Rice, Organic and Convenience and Health Business. Gross profit grew by 18% YoY and gross profit margin contracted by 30bps from 33.5% to 33.2% on account of increase in input cost. EBITDA shot up 29% expanded by 80bps from 10.6% to 11.4% due to reduction in freight cost and price increase and also, efficiencies at manufacturing level and benefit of scale. Profit of tax jumped 75% YoY at Rs 132 crore YoY.   

For FY23 revenue clocked a growth of 28% YoY and gross profit jumped up by 31% YoY. Gross profit margin expanded by 70bps to 34.4% on account of change in product mix and partial price increase. EBITDA was up by 20% YoY and margins contracted by 70bps to 10.7%. Profit after tax surged 37% YoY at 423 crore.  

Market Share Gain:   

One of the primary indicators of a company’s strength is the ability of its management to engage itself in continuous and relentless market share capture. An easy way of identify whether a company is capturing market share is to look for a business whose growth is in excess of the rate at which the entire market is expanding.   

Interestingly, LT stood on this parameter as Company’s India volume market share continues to increase and currently stands at 29.6% (MAT March’23; AC Nielsen Retail Survey Audit). LT Foods reported an offtake volume growth of 18.2% for FY23 vs the category growth of 9.0% in the same period. Number of households consuming LT Foods offerings grew by 31.26% (vs category growth of 5.5%) to reach 45.38 lakh households. (Source: Kantar Households Panel Branded Basmati Rice MAT March’23).   

Stock Performance:   

The stock has added 6.5% in the last one-week and it is up by 17.61% in the last one month. Talking about the performance of the stock in the long-run the stock is up by a staggering 448% and as a result this stock has turned out to be a multibagger in the long-run.  

About the company:   

LT Foods is an Indian-origin 70-year-old consumer food company which is a leading player in the speciality rice-based foods business across the globe. The company has been delivering the finest quality and taste experiences in more than 60 countries across India, U.S., Europe, Middle East, Far East and the rest of the world. Company’s range of portfolio includes ‘Daawat’, one of India’s most loved and consumed Basmati brands, ‘Royal’, North America’s No. 1 Basmati player and many more.   

 

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