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LTFOODS - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.7
📊 Financial Overview
- Profitability: PAT rose from ₹37.0 Cr to ₹71.2 Cr QoQ, showing a strong 16.6% growth.
- Return Metrics: ROE at 12.0% and ROCE at 15.5% reflect healthy operational efficiency.
- Valuation: P/E of 70.0 is significantly above the industry average (20.1), indicating steep overvaluation.
- P/B Ratio: With a book value of ₹52.6 and price of ₹420, P/B is ~7.98, suggesting a high valuation multiple.
- PEG Ratio: 3.00 signals overvaluation relative to earnings growth.
- Debt Profile: Debt-to-equity ratio of 0.12 shows excellent financial discipline and low leverage.
- Momentum: RSI at 47.5 and MACD at -1.99 suggest neutral-to-weak sentiment with potential for consolidation.
🏢 Business Model & Competitive Edge
- LT Foods is a leading player in the packaged food segment, primarily known for its basmati rice brand “Daawat.”
- Strong export presence and brand equity in both domestic and international markets offer competitive advantage.
- Focus on value-added products and organic foods enhances margin profile and diversification.
💡 Entry Zone Recommendation
- Current price is slightly below DMA 50 (₹428) and above DMA 200 (₹415), indicating short-term consolidation.
- Suggested Entry Zone: ₹400–₹415 for accumulation on dips.
- Long-term holding is viable if earnings growth sustains and valuation moderates.
✅ Positive
- Strong QoQ PAT growth and improving profitability.
- Low debt-to-equity ratio enhances financial resilience.
- DII holdings increased by 1.12%, reflecting rising domestic investor confidence.
⚠️ Limitation
- High P/E and PEG ratios suggest valuation concerns.
- EPS of ₹6.01 is modest relative to price levels.
- Momentum indicators show weakness, limiting short-term upside.
📉 Company Negative News
- FII holdings declined slightly by 0.03%, indicating cautious foreign sentiment.
- Stock has corrected ~19% from its 52-week high of ₹519.
📈 Company Positive News
- Strong quarterly earnings and brand expansion in organic and value-added segments.
- Volume above weekly average suggests renewed investor interest.
🏭 Industry
- Packaged food and FMCG sectors benefit from rising consumer demand, urbanization, and export opportunities.
- Industry P/E of 20.1 supports moderate valuation for branded players.
🧾 Conclusion
- LT Foods is a well-established FMCG player with strong brand equity and improving profitability.
- Entry near ₹400–₹415 offers a reasonable long-term opportunity, though valuation remains elevated.
- Monitor earnings momentum and institutional flows for sustained performance.
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