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Check Before You Invest : LT Foods Ltd

BSE: 532783 NSE: LTFOODS ISIN: INE818H01020
  |   Sector:  FMCG   |   Industry:  Consumer Food

Snapshot

Q.1 Which industry/sub-sector does LT Foods Ltd belong to?
LT Foods Ltd belongs to the FMCG sector, operating specifically within the Consumer Food segment.
Q.2 Is LT Foods Ltd a good quality company?
LT Foods Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is LT Foods Ltd undervalued or overvalued?
LT Foods Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 22.3 12.57
Price to Book 3.09 2.94
Price to Sales 1.27 1.26
EV to EBITDA 11.8 10.76
Q.4 Is LT Foods Ltd a good buy now?
LT Foods Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of LT Foods Ltd?
LT Foods Ltd revenue growth is 11.7% for FY-2025, which is below its 5-year CAGR of 15.99%, indicating slower growth.

Q.2 Gross Profit margin of LT Foods Ltd?
LT Foods Ltd Gross profit margin which is the profit after deduction of direct costs, is 11% for FY-2025, which is in line with its 5-year median of 10.5%, indicating stable margins.

Q.3 Operating Profit Margin of LT Foods Ltd?
LT Foods Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.27% for FY-2025, which is in line with its 5-year median of 11.27% indicating stable margins.

Q.4 Net Profit Margin of LT Foods Ltd?
LT Foods Ltd Net Profit Margin is 7.05% for FY-2025, is above its 5-year median of 6.1%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 11 10.5
Operating Profit Margin (%) 11.27 11.27
Net Profit Margin (%) 7.05 6.1

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of LT Foods Ltd?
LT Foods Ltd Return on Asset is 9.13%, which is in line with its 5-year historical median of 8.77%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of LT Foods Ltd?
LT Foods Ltd Return on capital employed is 21.42% for FY-2025, which is above its 5-year historical median of 19.09%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of LT Foods Ltd?
LT Foods Ltd Return on equity is 16.93% for FY-2025, which is in line with its 5-year historical median of 17.78%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of LT Foods Ltd?
LT Foods Ltd Cash conversion cycle is 118 days, in line with its 5-year historical median of 121 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.33 1.33
ROE (%) 16.93 17.78
ROCE (%) 21.42 19.09
Cash Conversion Cycle 118 days 121 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of LT Foods Ltd?
LT Foods Ltd Debt-to-Equity ratio is 0.19, which is lower the industry average of 0.49, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of LT Foods Ltd?
LT Foods Ltd Debt to cash flow from operations is 1.61, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of LT Foods Ltd?

Q.1 Promoter shareholding and pledge status of LT Foods Ltd?
Promoters hold 51.01% of the LT Foods Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does LT Foods Ltd performance compare with that of its Peers?

Q.1 Revenue growth of LT Foods Ltd vs industry peers?
LT Foods Ltd revenue CAGR is 15.99%, compared to the industry median CAGR of 7.03%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 11.7 7
Gross Profit Growth (%) 8.2 13.3
Operating Profit Growth (%) 4.3 12.6
Net Profit Growth (%) 2.3 20.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.33 1.2
ROE (%) 16.93 7.22
ROCE (%) 21.42 11.34
Cash Conversion Cycle (days) 118.08 48

Valuation & price assessment

Q.1 Stock return of LT Foods Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 32.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
32.4% 35.2% 50.4% -1.6%
Q.2 Valuation ratios of LT Foods Ltd vs historical?
The current P/E ratio of 22.3 is higher than its historical median of 12.57, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 22.3 12.57 26.55
Price to Book 3.09 2.94 2.53
Price to Sales 1.27 1.26 1.43
EV to EBITDA 11.8 10.76 14.38

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