Traditionally a basmati rice company, LTFOODS has evolved into a multi-product FMCG player with early entry into the organic segment. With healthy growth in the rice business, the organic segment is expected to grow at a much faster pace, led by increasing adoption of healthy and conscious food habits among individuals. This will also aid in improving the overall margin profile of the company going ahead.
The organic business has delivered 12%/16% revenue/EBITDA CAGR over the last four years, and we expect 22%/24% CAGR over FY25-28, thereby improving its revenue share to 13% by FY28 vs 11% in FY25.
We expect LTFOODS to report a CAGR of 15%/20%/24% in revenue/EBITDA/PAT over FY25-27. We value LTFOODS at 21x FY27E EPS to arrive at our TP of INR600. Reiterate BUY.
