LT Foods Reports Strong Revenue Growth, But Profit Margins Face Pressure

LT Foods reported robust financial results for the quarter and half-year ended September 2025. Consolidated revenue saw a significant 30% year-on-year increase to ₹2,772 crore in the second quarter (Q2 FY26) and a 25% rise to ₹5,273 crore for the first half (H1 FY26). This growth was driven by strong performance across various geographies and product categories, including its flagship Basmati rice business, which grew 24% in H1, and its organic food segment, up 26%. Strategic moves, such as the full acquisition of Golden Star in the US and the €25 million acquisition of Hungary-based Global Green Kft to enter the European canned foods market, also contributed.

Impact: Despite strong revenue momentum, profitability faced pressure. Net profit for Q2 rose only 9% to ₹164 crore, and for H1 FY26 it was also up 9% to ₹332 crore. Profit margins compressed; PAT margin fell from 7.1% to 5.9% in Q2, and the EBITDA margin slipped by 40 basis points to 11.7% in H1. This squeeze is attributed to increased brand investments and higher input costs. Managing Director and CEO Ashwani Arora expressed confidence, citing the business model's resilience and agility, and emphasized future focus on brand strengthening and digital transformation. This news is crucial for investors as it shows strong market penetration and expansion strategy leading to revenue growth, but also highlights challenges in maintaining profitability. Investors will watch if the company can manage cost pressures and leverage its investments for sustained profit growth. Rating: 7/10.

Definitions: Consolidated Revenue: The total income of a parent company and all its subsidiaries combined, after eliminating inter-company transactions. Year-on-year (YoY): A comparison of a company's performance against the same period in the previous year. Net Profit (or Profit After Tax - PAT): The profit remaining after all expenses, taxes, and interest have been deducted from total revenue. PAT Margin: Net profit expressed as a percentage of revenue, indicating profitability efficiency. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. EBITDA Margin: EBITDA expressed as a percentage of revenue. Basis Points (bps): A unit equal to 1/100th of a percentage point (0.01%). Gross Profit: Revenue minus the cost of goods sold. Input Costs: Expenses incurred to produce goods, such as raw materials and labor. Acquisition: The act of one company buying most or all of another company's shares to gain control.