LTFOODS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | LTFOODS | Market Cap | 12,570 Cr. | Current Price | 361 ₹ | High / Low | 519 ₹ |
| Stock P/E | 59.2 | Book Value | 52.6 ₹ | Dividend Yield | 0.83 % | ROCE | 15.5 % |
| ROE | 12.0 % | Face Value | 1.00 ₹ | DMA 50 | 381 ₹ | DMA 200 | 402 ₹ |
| Chg in FII Hold | -1.20 % | Chg in DII Hold | 1.29 % | PAT Qtr | 66.2 Cr. | PAT Prev Qtr | 71.2 Cr. |
| RSI | 45.4 | MACD | -7.94 | Volume | 2,18,194 | Avg Vol 1Wk | 4,27,393 |
| Low price | 288 ₹ | High price | 519 ₹ | PEG Ratio | 2.53 | Debt to equity | 0.12 |
| 52w Index | 31.6 % | Qtr Profit Var | 6.28 % | EPS | 6.12 ₹ | Industry PE | 21.3 |
📊 Financials: LT Foods shows moderate fundamentals with ROCE at 15.5% and ROE at 12.0%, reflecting average capital efficiency. Debt-to-equity ratio of 0.12 indicates low leverage, ensuring financial stability. Quarterly PAT declined from 71.2 Cr. to 66.2 Cr., highlighting earnings pressure. Cash flows remain steady, supported by strong demand in the FMCG and food processing sector.
💹 Valuation: Current P/E of 59.2 is significantly higher than industry average (21.3), suggesting overvaluation. P/B ratio (~6.9) is elevated, while PEG ratio of 2.53 indicates weak growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 340–355 ₹, offering margin of safety compared to current price (361 ₹).
🏢 Business Model & Advantage: LT Foods operates in the packaged foods sector, specializing in rice and related products under brands like Daawat. Its competitive advantage lies in strong brand recognition, global distribution, and diversified product portfolio. Market cap of 12,570 Cr. positions it as a mid-cap FMCG player with resilience but facing valuation challenges.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 340–355 ₹. Long-term investors may hold cautiously given brand strength and low debt, but premium valuation and declining profitability warrant careful monitoring. Technical indicators (RSI 45.4, MACD negative) show neutral-to-weak momentum.
Positive
- Low debt-to-equity ratio (0.12) ensures financial stability.
- Strong brand presence with global distribution network.
- DII holding increased (+1.29%), showing domestic institutional confidence.
- Resilient demand in FMCG and packaged food sector.
Limitation
- High P/E (59.2) compared to industry average (21.3) suggests overvaluation.
- Elevated P/B ratio (~6.9) indicates expensive price relative to book value.
- PEG ratio (2.53) reflects weak growth-adjusted valuation.
- Quarterly PAT decline highlights earnings pressure.
- Dividend yield of 0.83% is modest, limiting income appeal.
Company Negative News
- Decline in FII holding (-1.20%) reflects reduced foreign investor confidence.
- Weak technical indicators (MACD -7.94) show bearish momentum.
Company Positive News
- DII inflows (+1.29%) show strong domestic institutional support.
- Strong brand equity and diversified product portfolio support resilience.
Industry
- Industry P/E at 21.3 indicates moderate valuation levels.
- Packaged food and FMCG sector benefits from rising consumer demand.
- Companies with strong brand presence and distribution hold competitive advantage.
Conclusion
⚖️ LT Foods demonstrates moderate fundamentals with strong brand presence and low debt. However, premium valuation, weak PEG ratio, and profit decline temper the outlook. Entry around 340–355 ₹ is recommended for long-term investors, with cautious monitoring of profitability and institutional flows.