Strategic focus on premiumisation and innovation drives impressive growth for LT Foods
LT Foods revealed its unaudited consolidated financial results for the first quarter ended 30 June 2024.
The company’s total revenue for Q1 FY25 stood at Rs 2,088 crore, marking a 17 per cent increase year-on-year. Gross profit reached Rs 700 crore, up 16 per cent from the previous year. EBITDA grew by 15 per cent to Rs 258 crore, while profit after tax (PAT) rose by 13 per cent to Rs 155 crore. Cash profit increased by 14 per cent, amounting to Rs 197 crore.
Ashwani Arora, Managing Director & CEO of LT Foods, expressed satisfaction with the company’s performance. “Our strong Q1 FY’25 results stem from our strategic focus on premiumisation and our ability to adapt and grow in dynamic markets. Our premiumisation strategy continues to yield significant results, driving higher margins and reinforcing our brand’s reputation for providing quality products. We have experienced impressive growth, with a 17 per cent increase in revenue and a 13 per cent increase in profitability year-on-year. Our Basmati and other specialty rice segment posted a 14 per cent YoY increase, while our Ready-to-Eat (RTE) and Ready-to-Cook (RTC) segments witnessed a strong 37 per cent YoY growth in the first quarter, positioning us for rapid growth in these high-potential segments.”
Consolidated Q1 FY25 total revenue and profit after tax rose by 17 per cent and 13 per cent, respectively, on a year-on-year basis. This growth was driven by a superior product mix, higher investment in marketing and distribution expansion. The Basmati and other specialty rice business grew by 14 per cent YoY due to increased investment in branding and marketing. The organic segment resumed its upward trajectory with a 34 per cent YoY growth. Revenue in the RTE and RTC segment, including DAAWAT® Sehat, DAAWAT® Quick Cooking Brown Rice and other health-focused products, increased by 37 per cent YoY to Rs 56 crore.
Gross profit for Q1 FY25 increased by 16 per cent YoY to Rs 700 crore, with the gross profit margin slightly decreasing by 30 basis points to 33.5 per cent. EBITDA increased by 15 per cent YoY to Rs 258 crore, with the EBITDA margin decreasing by 20 basis points to 12.4 per cent. PAT increased by 13 per cent YoY to Rs 155 crore, with the PAT margin decreasing by 30 basis points to 7.4 per cent.
Arora further elaborated on the company’s strategic initiatives, “Our unwavering focus on innovation, strong brand equity, and well-entrenched distribution network have established a strong foundation for sustained growth and value creation for all stakeholders. Going ahead, our goal is to continuously innovate and venture into new food segments that resonate with evolving consumer preferences and behaviours, as well as further solidify our existing portfolio.”
Strengthening financial metrics also highlighted the company’s progress. The current ratio improved from 2.0 in Q1 FY24 to 2.3 in Q1 FY25. The interest coverage ratio significantly improved to 11.6 in Q1 FY25 from 8.6 in Q1 FY24. The debt-equity ratio declined to 0.2 in Q1 FY25 from 0.4 in Q1 FY24, while the debt-EBITDA ratio declined to 0.8 in Q1 FY25 from 1.2 in Q1 FY24. The return on capital employed improved to 20.8 per cent in Q1 FY25 from 19.4 per cent in Q1 FY24 and the return on equity stood at 17.8 per cent in Q1 FY25 compared to 19.2 per cent in Q1 FY24.
LT Foods has demonstrated resilient performance in Q1 FY25, driven by strategic initiatives, innovation and a strong market presence. The company is well-positioned for sustained growth, leveraging its robust operational strategies and commitment to expanding market reach.
