LT Foods (LTFOODS) Q4 15/16 earnings summary

Executive summary

• FY2016 revenue rose 7.19% YoY to ₹2,979.68 crore; operating EBITDA increased 17.46% to ₹362.87 crore, with margin up 106 bps to 12.2%.

• Strategy centered on premiumisation, branded products, value-added foods and international reach; branded business represented close to 53% of sales.

• Strong operating growth was partly offset by a ₹44 crore exceptional loss tied to a disputed insurance claim after the 2014 fire at a subsidiary facility.

Financial highlights

• Consolidated revenue from operations was ₹2,973.42 crore versus ₹2,734.58 crore in FY2015; total revenue was ₹2,979.68 crore versus ₹2,779.78 crore.

• Operating EBITDA reached ₹362.87 crore, up 17.46% YoY; EBITDA margin improved to 12.2% from 11.1%.

• PBT before the exceptional fire-related loss was ₹163.55 crore; reported PBT was ₹119.55 crore, while PAT after minority interest and associate losses was ₹72.11 crore versus ₹72.49 crore.

• Consolidated EPS was ₹27.23 basic and ₹27.14 diluted; standalone EPS was ₹11.47 basic and ₹11.44 diluted.

Outlook and guidance

• Priorities included quality growth, premiumisation, higher-margin value-added products, brand investment, wider distribution and operational efficiencies; management expected continued growth in FY2017.

• Devaaya staples were targeted for stronger traction in India and overseas; Daawat sauté sauces were planned for rollout across 54 Indian cities in FY2017.

• Growth investment was planned mainly in value-added premium segments, funded through internal cash accruals while gradually reducing debt; core operations were considered adequately resourced.

• Organic foods, Devaaya and Royal’s new product lines were identified as growth drivers; the organic business had contributed over ₹224 crore in FY2016.