Sunday, 4 March 2018


In the year 1990, Mr. Vijay Kumar Arora began a small company in the village of Amritsar.
Today, LT Foods is the leading processor of rice and other speciality foods in India.
 It has a strong market presence with its brand ‘Daawat’ and ‘Royal’ are the leader in premium packaged basmati rice in India and US respectively. It has a diversified geographical presence backed by an established marketing network and strong brands. Recently the company has also added organic products and staples to its product portfolio. It has also acquired brands from HUL, further strengthening its presence in the Middle East and North American markets. LT Foods is amongst the largest basmati rice exporter which has high barriers to entry. It is the largest basmati rice player in North American markets where the demand for basmati rice has been increasing
Ashwani Kumar Arora, the CEO of LT Foods, appears to be a visionary.
He has clearly spelt out the roadmap for the Company and also explained how he plans to get it there.
LT Foods expects revenue to double to $1 billion by 2022. We have a clear roadmap. We are leveraging our brands to build an export-driven global food company. Improvements in procurement, processing, sales and distribution should lift operating profit as a percentage of revenue to 15 percent in the coming years from 12 percent,” he said with ice-cool confidence.
He explained that the organic foods portfolio will be the growth driver, even as the core rice business provides strong cash flows.
The ambitious plans announced by LT Foods should catapult it into a higher trajectory of growth and profitability. Hopefully, this will send the stock price surging into the stratosphere  like rocket and translate into multibagger gains


CMP : Rs.93.25     Market Cap:Rs.2,982.55 Cr.     EPS-Rs.  4.42      Face Value- Rs 1

EBITDA(Earning before interest, tax, depreciation  & Amortization (Cr)
(Profit Before Tax)PBT
(Profit After Tax)PAT
Mar’17  : 349.24
Mar’17  : 194.69
Mar’17  :117
Mar’16  : 311
Mar’16  : 119.49
Mar’16  :72
Change  : 12%
Change  : 63%
Change  : 62%

Mar’17  : 3,286.55
Mar’17  :2543
Mar’17  :171
Mar’17  : 109.85
Mar’16  : 2,973.42
Mar’16  :2324
Mar’16  :135
Mar’16  : 83.70
Change  :10%
Change  :9%
Change  : 27%
Change  :31%

Current Ratio
> 2 is Good,
< 2 is Not Good
A liquidity ratio that measures a companys ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations.

Quick Ratio (x)
> 1 is Good,
< 1 is Not Good
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets
Sales growth
CAGR >15% for last 7-10 years
Growth should be consistent year on year. Ignore companies where sudden spurt of sales in one year is confounding the 10 years performance.
Very high growth rates of >50% are unsustainable.

Dividend Yield (%)
> 1.5 is Good,
< 1.5 is Not Good
A financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividend yield is calculated as annual dividends per share divided by market price per share.

P/E to Growth ratio (PEG ratio)
<1 is Good
The price/earnings to growth ratio (PEG ratio) is a stock's price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. The PEG ratio is used to determine a stock's value while taking the company's earnings growth into account, and is considered to provide a more complete picture than the P/E ratio.
Promoter shareholding
> 51% is Good
Higher the better

Interest Coverage Ratio
> 2 is Good,
< 2 is Not Good
(For Banks & NBFC this is not Valid)
It is used to determine how easily a company can pay interest on outstanding debt. It is calculated by dividing a companys EBIT by the interest expenses.

Debt Equity Ratio
< 2 is Good,
> 2 is Not Good
(For Banks & NBFC this is not Valid)
A measure of a companys financial leverage calculated by dividing its total liabilities by stockholders equity. The debt/equity ratio also depends on the industry in which the company operates.
Price to Sales ratio (P/S ratio)
< 1.5 is Good
James O’Shaughnessy: Buy if P/S ratio is < 1.5 and sell if >3
Return On Asset (%)
> 5% is Good,
< 5% is Not Good
An indicator of how efficient management is at using its assets to generate earnings. Calculated by dividing a companys annual earnings by its total assets

Return On Equity (%)
> 18% is Good,
< 18% is Not Good
Also called Return on networth, it measures a companys profitability by revealing how much profit a company generates with the money shareholders have invested, it is calculated by dividing the net profit after tax by shareholder's fund For high growth companies you should expect a higher ROE.
P/E ratio

Industry P/E 35
<Industry P/E is Good.

P/E ratio is the most widely used parameter to analyze whether the stock of any company is overvalued or undervalued at any point of time. It is calculated by dividing the current market price (CMP) of a stock by profit/earnings per share (EPS).

Technically the stock after touching high 0f  Rs 108.65 ,corrected to Rs.86.80.After double bottoming starts journey to upwards. Support Rs.86.38,78.14,74.12 & Resistance- Rs.100.37,108.61.
Good buying Zone Rs 86 to 74.