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Stock Report
CRISIL revises outlook on long-term bank facilities of LT Foods Ltd
Posted On : 2020-12-22 15:57:41( TIMEZONE : IST )
CRISIL has revised its outlook on the long-term bank facilities of LT Foods Limited to 'Positive' from 'Stable' while reaffirming the rating at 'CRISIL A-'. The short-term rating has been reaffirmed at 'CRISIL A2+'.
Detailed Rationale
The outlook revision reflects CRISIL's expectations that the group's business and financial risk profiles will continue to improve over the medium term. Improvement in business performance is reflected in operating income of Rs 2,424 crore in the first half of fiscal 2021, compared to Rs 1,952 crore in the first half of fiscal 2020, which was aided by higher volumes achieved in both core rice and organic business despite the impact of the Covid-19-induced lockdowns on the HORECA segment. Operating margin (earnings before income, depreciation, tax and amortization [EBIDTA] margin) was also higher at 12.7% for the first half of the current fiscal compared to 11.4% for the corresponding period of the previous fiscal, aided by higher realizations in the rice business, especially in the first quarter of fiscal 2021 and change of product mix towards high-margin products. Hence, fiscal 2021 revenue and EBITDA margin are expected to be higher than CRISIL's expectations and will continue to be so over the medium term, driven by the management's focus on profitability. The financial risk profile also continues to improve as is reflected in continuously declining absolute debt levels of the group. The group is expected to maintain debt-to-EBIDTA ratio of less than 3 times, going ahead.
The ratings continue to reflect the LT group's strong market position in its segment, resulting in sales growth and stable profitability. The ratings also factor in the group's diversified geographical reach through strong brands (Daawat in India market and Royal in the US market), established marketing network and improving financial risk profile.
Shares of LT FOODS LTD. was last trading in BSE at Rs. 54.50 as compared to the previous close of Rs. 50.95. The total number of shares traded during the day was 1,49,949 and the deliverable quantity was 68,467.
The stock hit an intraday high of Rs. 54.50 and intraday low of Rs. 51.
