LT Foods (Daawat) Share Price Target: LT Foods Limited (NSE: DAAWAT, BSE: 532783) is an Indian FMCG company engaged in the business of rice milling, processing, packaging and marketing a wide range of branded and non-branded basmati rice products. Headquartered in Gurugram, Haryana, LT Foods sells its products in over 65 countries under brands like Daawat, Royal, Heritage and others.
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With a growing presence across markets, increasing capacity and a strong brand portfolio, the company has delivered stellar returns to investors over the long term. Here is a closer look at LT Foods’ business operations, financials, future growth outlook and share price targets for 2023 to 2030.
Overview of LT Foods and Its Business Operations
LT Foods Limited (LTF), formerly known as LT Overseas Limited, is an Indian food processing company headquartered in Gurugram, Haryana. Founded in 1990 by Surandra Arora, the company is a leading player engaged in milling, processing and marketing basmati rice and other food products under its flagship brands ‘Daawat’ and ‘Royal’.
The company operates a strong global distribution network spanning across India, North America, Europe, Middle East and other markets. As of FY22, LTF operates 6 processing facilities in India and overseas along with access to more than 200,000 MT paddy procurement infrastructure.
On the financial front, LT Foods reported consolidated net revenue of ₹6,232 crore and net profit of ₹203 crore in FY22. Going forward, the company aims to drive growth by increasing procurement, expanding distribution reach, boosting brand value and introducing new products tailored to consumer needs.
LT Foods’ Brand Portfolio and Market Positioning
LT Foods sells its range of basmati rice and other food products through the following brands:
- Daawat: Flagship Indian consumer brand and market leader in organised branded basmati rice segment with ~25% share. Also exported to markets like US and Middle East.
- Royal: Leading brand for LT Foods in US with ~50% market share in organised basmati rice category.
- Heritage: Cost-conscious premium segment brand.
- Devaaya: Focused on health and wellness consumer segment.
- Roza: Targets middle East ethnic consumer segment.
- Organic Tattva: Range of organic food products.
- Kari Kari: Snacks brand targeted at health-focused consumers.
By positioning its brands across price points and consumer segments, LT Foods has captured leading overall market share in the basmati rice category. The company aims to achieve higher penetration for brands like Daawat, leverage Royal’s US distribution and tailor products by market to drive growth across geographies.
Financial Performance and Profitability Ratios
Key Financial Parameters and Ratios
- Market Capitalization: ₹5,891 Crore
- Share price (BSE): ₹170
- P/E Ratio: 13.1
- Book Value Per Share: ₹79.4
- Dividend Yield: 0.59%
- ROCE: 17.1%
- ROE: 16.8%
LT Foods has posted consistent revenue growth over the past 5 years driven by volume uptick across key markets and brands. This growth has translated into higher profitability with 3-year revenue and PAT CAGR (FY20-22) of 20.4% and 59.8% respectively.
Key return ratios like ROCE and ROE stand healthy at 17.1% and 16.8% respectively. Further capacity expansion, higher realizations and cost control efforts will enable LT Foods to maintain industry leading margins over the long run.
LT Foods Shareholding Pattern
The shareholding pattern of LT Foods as on December 2022 is as below:
- Promoter and Promoter Group: 51%
- Mutual Funds: 2.84%
- Foreign Portfolio Investors: 5.93%
- Public & Others: 40.23%
Promoters continue to hold majority 51% stake in the company. Among public shareholders, FPIs like Matthews Asia, BNP Paribas and HG Infraholdings hold approx. 6% stake while retail investors account for 16.13% equity.
Revenue Breakdown by Geography
LT Foods has a geographically diversified revenue mix with key contributions from:
- India: 32% revenue share
- North America: 36% revenue share
- Rest of World: 32% revenue share
Going forward, the company aims to drive growth across its target international markets through distribution expansion as well as new product launches. In India, focus will be on deeper penetration for flagship brands like Daawat and leveraging e-commerce channels.
Past Price History and Returns
LT Foods Share Price Returns Over the Years
- 1 year return: 85%
- 3 year return: 495%
- 5 year return: 520%
- 10 year return: 2,000%
As seen above, LT Foods stock has delivered bumper returns to investors over the past decade by growing business volumes and maintaining profitability. Positional investors have earned almost 5x returns over last 3 years highlighting wealth creation potential.
In terms of price chart, the stock has shown a rising uptrend across major timeframes and trades above all key moving averages. This reflects bullish sentiment and possibility of continuation of the uptrend as the company executes its growth plans.
LT Foods Share Price Target for 2023
Driven by new product launches, expanded reach and consistent brand building efforts, LT Foods is expected to post 16-18% revenue growth in FY24E along with further improvement in margins. On the basis of fundamental analysis and technical indicators, the LT Foods share price targets for 2023 are as below:
- Minimum Target: ₹200
- Likely Target: ₹215
Investors can expect at least 25% upside from current levels driven by earnings growth and positive market sentiment towards the stock. New product categories and deeper distribution penetration will act as key catalysts.
LT Foods Share Price Target for 2024
Over the next 2 years, LT Foods aims to accelerate its international expansion plans spanning Americas, Europe, Middle East and Asian markets. The company is also working to grow its product portfolio and review strategic acquisition opportunities.
On the back of 35-40% revenue growth and margin expansion estimated over FY23-25E, LT Foods share price targets for December 2024 are:
- Minimum Expected: ₹240
- Likely Target: ₹260
As demand trends remain favourable and LT Foods taps into new markets effectively, 40-50% upside in the stock from current levels looks likely by end of 2024.
LT Foods Share Price Target for 2025
By FY25, analysts expect LT Foods to potentially double its annual revenue run-rate compared to FY22 levels driven by organic and inorganic initiatives. Transition to a higher growth trajectory and profitability levels will warrant significant upside re-rating from current valuations.
Accordingly, conservative share price targets for December 2025 are:
- Minimum Target: ₹280
- Likely Target: ₹300
So in 2025, LT Foods’ stock price can potentially target 2.5x to 3x returns from today’s levels on the back of strong earnings performance.
LT Foods Share Price Target for 2026
Over FY25-FY30E, LT Foods aims to achieve 30% revenue CAGR driven by increased scale, customer acquisition and global distribution network. The company is also expanding paddy sourcing capabilities and processing capacities to support this growth.
By FY27, Asian and European markets are estimated to potentially contribute 25% of total sales as brand recognition and local partnerships drive growth.
Given the growth visibility, LT Foods share price targets for 2026 are:
- Minimum Price: ₹350
- Likely Price: ₹370
So by end of 2026, LT Foods shares can potentially see 3x returns materialize as financial metrics hit higher orbits.
LT Foods Long Term Target for 2030
As per management vision, LT Foods aims to evolves into an €1 billion global food company by 2030. This will be driven by a 3-4x increase in revenue scale over the next 7-8 years and tapping new product and geography white spaces. Margin profile is also expected to witness steady uptick.
Driven by this transformative growth phase, conservative LT Foods share targets for December 2030 are estimated at:
Fundamental-Based Target: ₹700
This translates to 10x returns within 8 years for investors highlighting the immense value creation potential LT Foods is targeting.
Future Growth Drivers and Business Outlook
The key business growth drivers and positive factors charting the path ahead for LT Foods are:
- Brand Reach Expansion: Entry into new markets will expand LT Foods’ addressable consumer base and drive growth for brands like Daawat and Royal.
- New Product Launches: Innovation aligned to evolving preferences will enable premiumization and higher realization per customer.
- Strategic Acquisitions: Acquiring niche and emerging brands will enable LT Foods to accelerate its vision and gain market share.
- Capacity Expansion: Expanding milling and processing capacities across geographies will address growing volume requirements.
- Sourcing Scale-Up: Partnerships with farmers and cooperatives will boost access to high-quality produce to meet the demand uptick.
These growth levers collectively position LT Foods strongly from a 3-5 year perspective. As strategic plans get successfully implemented, the stock’s current valuations can witness significant re-rating ahead.
Key Investment Risks to Consider
While upside potential for the stock looks attractive, LT Foods’ future investment return prospects also depend on these risk factors to monitor:
- High share of unorganized competition eating into overall category growth and market share gains
- Input cost inflation affecting the gross margin profile significantly given the largely commoditized nature of agri-products
- Forex risk arising from mismatch in dollar revenues and rupee costs impacting net earnings
- Execution delays on capacity expansion plans and marketing investments affecting growth visibility
So while LT Foods’ long-term growth story appears promising, investors should account for these risk factors as well while determining portfolio exposure to the stock.
Conclusion and Final Thoughts
In summary, here are the key takeaways for investors on LT Foods’ business and share price outlook:
- Healthy long-term financial growth driven by brand strength and geographic reach
- Strong competitive positioning with leading market share in key geographies
- Significant white space for revenue expansion and margin improvement
- Share price can potentially target 2-3x returns over the next 3 years
- The fundamental upside potential of 10x over 8-year period looks possible
Given these factors, LT Foods represents an attractive investment proposition in the Indian FCMG space. The company offers a balanced mix of growth, profitability, dividend yield and long-term wealth creation for investor portfolios.
Frequently Asked Questions (FAQs)
What do you think LT Foods Share look like shortly?
With new product development, market expansion plans and accretive acquisitions in the pipeline, LT Foods earnings growth outlook remains healthy over next 3-5 years. This positions the stock price to potentially deliver 20-25% CAGR returns in the coming years.
When to invest in shares of LT Foods?
Given the strong business momentum and growth levers, any significant market correction can represent a good buying opportunity for investors to accumulate the stock with 12-18 month perspective.
Does LT Foods give good dividends to shareholders??
While LT Foods has consistently paid dividends, the yield has typically been around 0.5-0.6% which is not very high. As profitability ramps up, the scope for higher payouts exists but cannot be a key investment rationale currently.
Is LT Foods a multi-bagger?
Given the 10x total return potential by 2030, LT Foods stock does reflect the characteristics of a promising multi-bagger candidate over the long term. Strong earnings CAGR and upside re-rating of valuations contribute to this potential.
Is Daawat from LT Foods a good buy?
Yes, given Daawat’s segment leadership, brand equity and parent LTF’s growth orientation, the stock remains a good investment from a 2-3-year perspective for investors to benefit from India’s basmati rice opportunity.
Is LT Foods debt-free?
No, as on FY22 annual results, LT Foods had gross debt of approx. ₹1,221 Crore on its balance sheet. But the debt position remains comfortable from equity and cash flow perspective for future expansion needs.