LTFoods:
As per my understanding:
- Since their 80% of revenues are coming from exporting (US & Europe) premium brands of aging basmati rice business, which is cash cow.
- They have organic & convenience segment - till now they are not contributing much.
- How they are ensuring consistent margins? They are absorbing short term(1-2 Quarter) pricing shocks & also passing the costs to customers if they are long term pains.
- LTfoods is addressing the cyclicality - by establishing brands basmati business(cash cow) exporting to western countries. They are testing themselves in investing different high margin segments like snacks, organic, convenience, soyameal - if they are successful in anyone of the investments then re-rating will start (consistent earnings with high margins). Now all the big boys(MF, FII) are watching ltfoods from past 1 year, if they have consistent earnings for the next few quarters you can see huge rerating.
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