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LKP Securities
LT Foods (Buy)
Target: ₹ 186
CMP: ₹60.20
LT Foods (LTF) is one of the leading specialty rice producers in India with more than seven decades of operations. The company has a wide range of rice portfolio suitable to every cuisine and ethnicity. LTF forayed into organic food and ingredient business in 1999 through its subsidiary Nature Bio-Foods Ltd. Recently, LTF forayed into value-added business of health and convenience products, with the launch of rice-based snack Kari Kari, Quick Brown rice, Cuppa rice and sauté sauces. LTF has major brands in: Rice business -- Daawat, Devaaya, Royal, Indus Valley, 817 Elephant, Chef’s Secret, Heritage and Rozana; Organic Business – Daawat and EcoLife; New Product Business – Kari Kari, Daawat and Royal.
LTF exports to more than 60 countries with presence in major geographies such as North America, the Middle-East, Europe and Africa. The company generates around 85 per cent of its revenues from the core rice business, followed by 9 per cent from the organic business. The new product business is still at the nascent stage, while the company targets this business to contribute between 12-15 per cent in next few years.We expect the company to continue the momentum going forward with key focus on margin expansion and return on capital. We initiate coverage on LT Foods with a target price of ₹186
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