Tariff Relief Revives

LTFOODS

’ Outlook

, India’s leading rice exporter and owner of the Daawat and Royal brands, is regaining momentum after a volatile year marked by trade protectionism and tariff shocks in the US, its most critical market. Shares, which had retreated from a July 2025 peak of ₹519, are now stabilizing at ₹406, supported by a sharp reduction in US import duties. With resilient margins and strong revenue growth, the company is positioning itself for sustained expansion across both traditional and new product categories. Operational Performance US tariffs: reduced from 50% (August 2025) to 18% (February 2026), critical as the US contributes ~46% of revenue. Margins: EBITDA margin held at 11% in 9MFY26, consistent with five-year average, despite cost spikes. Input costs: Paddy accounts for 70–80% of total costs, making it the most sensitive variable. Revenue growth: up 25% in 9MFY26; expected to close FY26 at similar pace. Peer comparison: KRBL enjoys higher margins (~14%) but with greater volatility. Risks & Challenges Raw material costs up ~12% YoY. Global freight rates remain volatile, adding uncertainty to export economics. High paddy prices and geopolitical conflicts could pressure margins in FY27. Strategic Initiatives Diversified market presence cushions volatility. Expanding into organic foods (Ecopure) and ready-to-eat products, which offer higher margins and broaden the addressable market. Focus on brand loyalty and pricing power to pass cost increases to consumers. Valuation & Outlook Revenue projected to grow at 13% CAGR through FY28. Near-term risks persist, but tariff relief, diversification, and strong brand positioning support investor sentiment. Conclusion LT Foods’ resilience amid tariff shocks and cost inflation highlights its ability to leverage brand strength and diversification. While near-term margin pressures remain, the company’s long-term growth story