LT Foods: Nurturing Growth with Strategic Expansion and Digital Prowess

LT Foods Limited, a prominent player in the global FMCG sector, has announced its financial results for the second quarter and first half of Fiscal Year 2026, showcasing robust growth and strategic advancements. The company reported its highest-ever quarterly revenue, underscoring its strong market position and effective business strategies. This performance is a testament to its sustained brand investments, expanding distribution networks, and increasing consumer demand across its diverse portfolio.

For Q2 FY26, LT Foods achieved a revenue of Rs. 2,772 crores, marking a significant 30% year-on-year growth. The normalized growth, excluding the impact of Golden Star and U.S. Tariff, stood at a healthy 12%. EBITDA for the quarter grew by 24% to Rs. 316 crores. For the first half of FY26, the company reported a record half-year revenue of Rs. 5,273 crores, a 25% increase from the previous year, with normalized growth at 15%. H1 FY26 EBITDA reached Rs. 619 crores, growing by 20%. Despite these impressive top-line figures, the EBITDA margin for Q2 FY26 saw a slight contraction to 11.4% from 12% in Q2 FY25, attributed primarily to increased brand investments and strategic digitalization initiatives.

Segmental Performance and Strategic Initiatives

The Basmati & Other Speciality Rice segment continues to be the cornerstone of LT Foods' business, contributing 87% of the H1 FY26 revenue with Rs. 4,488 crores, reflecting a 24% growth. This growth was supported by strong demand across various geographies. The Organic Foods & Ingredients segment also demonstrated robust performance, achieving a 26% year-on-year growth to Rs. 583 crores, representing 11% of the total revenue. This segment's growth is indicative of the rising global demand for sustainable food choices and LT Foods' strong international presence.

In a strategic move to bolster its organic business, Nature Bio Foods Ltd. has entered the B2C segment in Europe with a new facility in Rotterdam. This initiative, backed by an initial capital expenditure of Rs. 20 crores and a planned additional investment of Rs. 15 crores over the next three years, is expected to generate an incremental revenue of Rs. 400 crores over the next five years, with revenue acceleration projected to begin in FY2026-2027. This expansion will enhance sourcing capabilities from India, Africa, and over 20 other countries globally, aiming to supply premium organic ingredients to the European market.

The Ready-To-Heat (RTH) & Ready-To-Cook (RTC) segment, while a smaller contributor at 2% of revenue (Rs. 95 crores), experienced a 5% decline. This was primarily due to the discontinuation of 'Daawat Sehat', which impacted sales growth. However, the company is focusing on building a stronger RTH and RTC portfolio, expanding its retail offerings with new product launches like the Daawat Thai Green Curry Rice Kit, and seeing strong performance from the Daawat Biryani Kit, which has surpassed 1 million units in annual consumption.

Global Footprint and Digital Transformation

LT Foods' global distribution network is a key strength, with North America accounting for 46% of its revenue and showing a 47% year-on-year growth (16% normalized). The flagship 'Royal' brand holds a dominant position in the US Basmati rice import market with a 61% share, and 'Golden Star' is the number one jasmine rice brand. India contributes 30% of the revenue, growing at 13% year-on-year, with 'Daawat' holding a 26% market share and expanding household reach. Europe and the UK contribute 15% of the revenue, with a robust 31% year-on-year growth, driven by expanding market reach and differentiated offerings. The Middle East and the rest of the world account for the remaining 9% of the revenue.

The company is also heavily investing in digital transformation to build a 'Smart & Intelligent Enterprise'. This initiative aims to drive 1.5X to 2X business value by enhancing stakeholder experience, optimizing costs, improving productivity, and strengthening brand value. Early results show a 2x revenue growth with digital supply chain transformation, a reduction in finished goods inventory from 40-45 days to 20 days, and an expansion of depots from 6 to 12.

Outlook and Investor Confidence

Looking ahead to FY26, LT Foods is committed to deepening brand equity, accelerating market expansion, and investing in digital transformation. The company maintains a strong investment-grade credit rating of CRISIL AA- A1+ with a positive outlook, reflecting its financial health. Management anticipates largely stable crop prices year-on-year and expects to achieve an EBITDA margin of +14% in the next four years. Despite some margin pressures in the short term, the company is confident in its ability to rebound and sustain long-term profitable growth.

LT Foods' Q2 FY26 performance underscores its strategic clarity and disciplined execution. With a strong brand portfolio, expanding global presence, and a clear focus on digital and sustainable initiatives, the company is well-positioned for continued growth and value creation for its stakeholders.