LT FOODS LTD - Q1 FY 21 RESULTS REVIEW - DT 10 09 2020

 

LT FOODS LTD

Q1 FY 21 RESULTS REVIEW

DT 10 09 2020

 

Management                   

 

Vijay Kumar Arora         Chairman & Managing Director                   

Surinder Kumar Arora         Managing Director

Ashwani Kumar Arora          Managing Director & CEO         

 

LT FOODS has seen a surge in demand for its rice brands both in India and overseas, says LT Foods Business Head Ritesh Arora

LT Foods says: “We have seen a surge in demand for our products in India as well as in international markets. Our consumer business has seen strong growth in all the markets as consumer demand for packaged rice has increased.”

Arora feels that the demand for rice may increase further due to the rise in home consumption. He said consumers prefer branded, packaged products because of the safety aspect. The company has witnessed demand for its products rising both in modern trade and e-commerce channels.

Big business

Gurugram-based LT Foods, which has 12 subsidiaries and joint venture firms, is engaged in milling, processing and marketing of branded and non-branded basmati rice. Daawat and Royal are the company’s main brands and it has operations in 65 countries. LT Foods also processes and markets parboiled rice and has production units in India and overseas.

The company's other brands include Ecolife, Royal, Devaaya, Heritage, Indus Valley, Rozana and Daawat Chef's Secretz.

Sorting out supply-chain issues

Asked about the pandemic’s impact on LT Foods’ business, Arora said that with rice being considered an essential item there has not been much of an impact and operations are running at full capacity.

Portfolio expansion

LT Foods has expanded its rice portfolio and ventured into the regional rice category with variants such as Sona Masoori and Kolam rice.

“We have been leveraging the strong brand equity of Daawat and robust distribution network to market the new regional products in India,” Arora said.

The company’s health and convenience portfolio includes Daawat Quick Cooking Brown Rice, Daawat Sauté Sauces, Rice based premium snacks — Kari Kari, Fortified Rice and Ready-to-Heat Products.

According to Arora, all these products have been accepted by consumers and have performed well in the test-launch phase.

 

LT Foods (in Rs. Cr.)	Jun '20	Mar '20	Jun '19	YOY	QOQ
Net Sales	1,215	1,198	980	23.99	1.46
Consumption of Raw Materials	899	799	618	45.48	12.55
Purchase of Traded Goods	28.92	24.03	16.91	71.02	20.35
Increase/Decrease in Stocks	-47.67	70.96	84.12	-156.67	-167.18
Employees Cost	49.98	46.42	44.47	12.39	7.67
Depreciation	24.58	29.33	19.71	24.71	-16.2
Other Expenses	128.14	126.19	96.01	33.47	1.55
P/L Before Other Inc., Int., Excpt. Items & Tax	132.26	102.09	100.93	31.04	29.55
Other Income	5.28	18.77	5.05	4.55	-71.87
P/L Before Int., Excpt. Items & Tax	137.54	120.86	105.99	29.77	13.8
Interest	27.32	35.64	37.29	-26.74	-23.34
P/L Before Exceptional Items & Tax	110.22	85.22	68.69	60.46	29.34
Exceptional Items	--	-0.3	--
P/L Before Tax	110.22	84.92	68.69	60.46	29.79
Tax	26.64	24.15	22.83	16.69	10.31
Net Profit	83.58	60.77	45.86	82.25	37.53
Minority Interest	-3.81	-4.36	-2.72	40.07	-12.61
Share Of P/L Of Associates	-0.93	-2.43	-0.44	111.36	-61.73
Net P/L After M.I & Associates	78.84	53.98	42.71	84.59	46.05
Equity Share Capital	31.98	31.98	31.98	0	0
Basic EPS (FV Rs.1)	2.46	1.69	1.34	83.58	45.56
MP	48.9
PE	4.97
VOLUMES	520000

 

52 Wk L/H     13   63.5

BUY 34.23 K        

SELL 52.37 K      

 

STRENGTHS

high TTM EPS Growth      

Good quarterly growth in the recent results  

Growth in Net Profit with increasing Profit Margin (QoQ) & YoY   

Increasing profits every quarter for the past 4 quarters     

Increasing Revenue every quarter for the past 3 quarters  

Company with decreasing Promoter pledge   

FII / FPI or Institutions increasing their shareholding  

OPPORTUNITIES     

High ROCE and Low PE 

Highest Recovery from 52 Week Low     

Stock with Low PE (PE < = 10) 

      

WEEKLY      

TECHNICAL RATING

Very Bullish  

Valuation    

Market Cap (Rs Cr.)    1,629.61

P/E  17.97    

Book Value (Rs)   27.24    

Dividend (%)   50

Industry P/E  11.13    

EPS (TTM)     2.83      

P/C 13.89   

Price/Book    1.87      

Dividend Yield.(%)      0.98      

Face Value (RS)   1    

Annual	Mar-20	Mar-19	Mar-18	Mar-17	Mar-16
Sales	4,146	3,890	3,613	3,244	2,973
Other Income	37	24	36	48	6
Total Income	4,184	3,914	3,649	3,292	2,979
Total Expenditure	3,771	3,562	3,285	2,941	2,712
EBIT	412	352	364	351	267
Interest	132	138	146	156	147
Tax	77	76	71	64	47
Net Profit	203	137	146	129	72

 

Historical Prices
	3m bef	Current Price	%Gain / Loss
Open Price	31	50	61.29
	1YR BEF
Open Price	22.8	50	119.3
	2 YR BEF
Open Price	54.05	50	-7.49
	3YR BEF
Open Price	67.15	50	-25.54

 

Margin Ratios	Mar-20
Gross Profit Margin (%)	12
Operating Margin (%)	10
Net Profit Margin (%)	5
Return Ratios	Mar-20
Return on Networth / Equity (%)	12
ROCE (%)	20
Return On Assets (%)	5
Leverage Ratios	Mar-20
Debt to Equity (x)	1
Interest Coverage Ratios (%)	3
Valuation Ratios	Mar-20
P/E (x)	34
P/B (x)	0
EV/EBITDA (x)	4
P/S (x)	0
Growth Ratios	Mar-20
3 Yr CAGR Sales (%)	5
3 Yr CAGR Net Profit (%)	42

 

Standalone	Jun-20
Promoters	56.8
Pledged	2.44
FII/FPI	1.44
Total DII	16.76
Fin.Insts	0.52
Insurance Co	0
MF	5.06
Others DIIs	11.18
Others	25
Total	100

 Overall -we find LT foods is a long term growth story and will reward long term investors very well.