India Ratings has upgraded LT Foods’ bank loan facilities to ‘IND AA’/Stable and affirmed its commercial paper at ‘IND A1+’. The upgrade reflects the company’s strengthening business profile and consistent growth, with consolidated EBITDA rising above INR10 billion in FY25. The agency expects continued healthy EBITDA, supported by LTF’s established brand and diversified presence.
Credit Rating Upgrade
India Ratings and Research (Ind-Ra) has upgraded LT Foods Limited’s (LTF) bank loan facilities to ‘IND AA’/Stable from ‘IND AA-‘/Stable. The rating on the company’s commercial paper has been affirmed at ‘IND A1+’.
Key Drivers of the Upgrade
The upgrade is primarily driven by the strengthening of LTF’s business profile, marked by consistent growth in its scale of operations. Consolidated EBITDA rose above INR10 billion in FY25 (two-year CAGR of around 20%), benefiting from business expansion and improved EBITDA margins of 12%. In 1HFY26, EBITDA grew 22% yoy.
Factors Supporting Continued Growth
Ind-Ra anticipates significant EBITDA growth in the medium term, supported by:
- LTF’s established brand in the domestic, US, and European basmati rice markets.
- Diversified presence across domestic and export markets.
- Growing organic food and ingredients business.
Financial Performance and Outlook
LTF’s consolidated EBITDA stood at INR5.7 billion in 1HFY26 (FY25: INR10.4 billion; FY24: INR9.8 billion). The company maintained a low net leverage (net debt/operating EBITDA) level, remaining below 1.0x (FY25: 0.6x; FY24: 0.5x).
Despite headwinds, including a 50% tariff imposed by the US, Ind-Ra expects LTF’s EBITDA to remain healthy, driven by growth in other geographies and limited competition in the US basmati rice market.
Analytical Approach
Ind-Ra continues to take a consolidated view of LTF and its subsidiaries, reflecting strong operational and strategic linkages.
Key Rating Strengths
- Strengthening of business profile with growing scale and profitability.
- Strong market position.
- Expanding product portfolio with strategic investments.
- Geographically diversified with a strong distribution network.
Key Rating Weaknesses
- Working capital-intensive nature of business.
- Limited EBITDA contribution from non-rice business.
- Susceptibility to changes in trade policies, forex fluctuations, and agro-climatic conditions.
Source: BSE