Buy LT Foods, target price Rs 123: LKP Securities

LKP Securities has buy call on LT Foods with a target price of Rs 123. The current market price of LT Foods Ltd. is Rs 71.65. Time period given by analyst is one year when LT Foods Ltd. price can reach defined target.

LT Foods Ltd., incorporated in the year 1990, is a Small Cap company (having a market cap of Rs 2298.08 Crore) operating in Agro Processing sector.

LT Foods Ltd. key Products/Revenue Segments include By Products, Paddy, Other (Traded), Service Charges, Others, Bardana, Rental Income and Processing Charges for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1322.53 Crore, up 8.13 % from last quarter Total Income of Rs 1223.13 Crore and up 8.57 % from last year same quarter Total Income of Rs 1218.16 Crore. Company reported net profit after tax of Rs 81.98 Crore in latest quarter.

Investment Rationale
LTF has been growing consistently across the markets on the back of strong brand recognition, deep product penetration, wider distribution network and aggressive product push. The company is expected to continue spending aggressively on expanding all the above variables. With these the company can achieve its five year growth targets along with the desired margin expansion. The margin pressure due to higher input cost and freight cost is expected to normalize in the latter part of the year, however, robust topline growth will help improving the operating leverage. LTF has been positively moving forward to strengthen its ESG framework. The company has been improving its manufacturing efficiencies through Green energy initiatives and also through collaboration with Humankind Group. It maintains BUY recommendation on LT Foods with a price target of ₹123.

Promoter/FII Holdings
Promoters held 56.81 per cent stake in the company as of 31-Dec-2021, while FIIs owned 1.42 per cent, DIIs 3.39 per cent.