LT Foods: Small cap stock with potential for best returns

K. ARAVIND

LT Foods is a global retailer of food products. The company mainly deals in the business of basmati rice, other specialty branded rice, organic food products and food products made from rice.

The company manufactures and markets these products. Apart from India, the company has a presence in the Gulf countries, the UK, Europe and the US. The company manages all the stages of cultivation, storage, storage, processing, packing and distribution.

During the July-September quarter of the current financial year, LT Foods performed well. The company had posted a net profit of Rs.40 crore for the quarter. Profit growth was 13 per cent over the same period last year. The company had posted a net profit of Rs.35 crore in the first quarter of last year.

The company earned a revenue of Rs.853 crore. Revenue growth was 12%. Rs.762 crore was the revenue in the first quarter of last year. The company has a strong presence in overseas markets.
LT Foods is able to generate good revenue from markets in India and abroad. Revenue from branded products accounts for 69 per cent of total business. LT Foods’ recently launched value-added products have received a good response from consumers. The company is successfully pursuing plans to expand its business in the European Union.

The stock is expected to fetch around Rs.120 in the current financial year on the back of strong earnings growth. LT Foods is a long-term buy stock for those who want to invest in stocks with a view to growth in the food consumption sector.

Shares of LT Foods, a small company with a market cap of Rs.1832 crore, are currently trading at a lower cost. The stock, which has a book value of Rs.50, is currently only 1.15 times the book value. This is a stock that can be considered as a ‘value pick’.