Shares of this FMCG company, which manufactures rice-based food products for both domestic and international markets, surged by more than 6 percent on Tuesday following the announcement of its expansion into the Saudi Arabian market. The company plans to open a new office in Riyadh to tap into the $2 billion rice and rice-based food sector.
Price Action
In Tuesday’s trading session, L T Foods Ltd‘s share price reached an intra-day high of Rs.375.00 per share, rising 5.8 percent from its previous close of Rs.354.65 apiece. The shares have retreated since then and currently trading at Rs.359.35 per share.
Expansion Plans
LT Foods Ltd., a global FMCG company specializing in consumer food products, has officially entered the Saudi Arabian market by inaugurating a new office in Riyadh. This move aims to capitalize on the $2 billion rice and rice-based food market in the Kingdom.
As part of its strategic expansion, LT Foods plans to leverage its expertise in rice products to meet the growing demand for premium offerings among Saudi consumers.
The company, which currently generates $1 billion in global revenue, has maintained consistent growth with an 18 percent revenue CAGR and a 21 percent profit CAGR over the past 18 years.
LT Foods is set to invest SAR 185 million in warehousing, stocks, and personnel over the next five years, targeting SAR 435 million in revenue during the same period. Additionally, with support from the Saudi Agricultural and Livestock Investment Company (SALIC), LT Foods is planning to establish local manufacturing facilities in Saudi Arabia.
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Product Developments
LT Foods introduced Jasmine rice under its Daawat brand, aiming at international markets such as the USA and Israel. The company also discontinued the “Daawat Sehat,” a fortified rice product, due to its lack of performance. Additionally, LT Foods is focusing on expanding its organic product range, with a projected growth of 10-12 percent in the organic segment.
Financial Performance
In its latest filing, L T Foods Ltd reported a 7 percent rise in revenue for Q2 FY25, reaching Rs.2,108 crore, compared to Rs.1,978 crore in Q2 FY24. However, the company’s net profit decreased to Rs.151 crore, from Rs.157 crore in Q2 FY24.
EBITDA for Q2 remained flat year-on-year at Rs.256 crore, maintaining an EBITDA margin of 12 percent. However, EPS for the quarter saw a 5 percent decline, falling to Rs.4.3 from Rs.4.5 in Q2 FY24.
The management anticipates a volume growth of 10-11 percent for FY25, with a target EBITDA margin of approximately 12 percent.
About the company
LT Foods Ltd, established in 1990, is a global food industry player known for its specialty rice products, including basmati rice. The company operates under brands such as Daawat and Royal and serves over 80 countries. It holds notable market shares in India and the U.S. while focusing on sustainability and innovation in its operations.
Written by – Siddesh S Raskar
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