Company LT Foods reports highest quarterly earnings in Q1
Published on July 25, 2025
LT Foods, the leading seller of popular brands such as 'Daawat' and 'Royal', has reported its highest quarterly revenue and EBITDA for Q1 FY26. The company's consolidated revenue for the quarter ended June 30, 2025, was ₹2,501 crore, marking a 20% year-on-year growth.
The flagship brand 'Daawat' increased its household reach in India from 45.56 lakh homes in March 2023 to 56.2 lakh homes in March 2025. The company's organic business segment recorded a significant 32% growth, and the snacking segment under 'Kari Kari' grew over 40% compared to the previous year.
Strong demand across geographies contributed to the performance, with the Basmati and specialty rice segment growing 18%. North America led regional growth at 32%, while Continental Europe surged 57%.
Despite these impressive figures, LT Foods' shares closed at ₹489.05 on a 0.34% decline from the previous close of ₹490.70. The decline in profit margins, which expanded 110 basis points to 34.7%, may have been a contributing factor. The net profit margin declined from 7.4% in Q1 FY25 to 6.7% in Q1 FY26, indicating margin pressure despite higher sales.
This margin compression can signal to investors that costs or expenses rose faster than revenue, which can limit earnings growth even as sales increase. Additionally, market participants often focus not just on absolute profit gains but on profitability ratios and future outlook. The reports suggest that sequential softness, potential margin pressures, and cautious guidance might have created uncertainty among investors, which weighed on the stock price post-results.
LT Foods' return on capital employed is 21.1%, and the profit after tax rose 9% to ₹169 crore. The interest coverage of LT Foods is 8.9x, and the current ratio is 1.9. The net debt-to-equity of LT Foods stands at 0.24.
Performance attribution was made to Ashwani Arora, MD & CEO of LT Foods, but no new information was provided about the performance of other brands or segments of LT Foods in this paragraph. No new financial metrics were provided for LT Foods in this paragraph regarding Q1 FY26.
- To maintain its business growth, LT Foods might consider expanding its finance options, such as offering subscription-based coverage for exclusive content or services related to investing or finance.
- The decline in profit margins for Q1 FY26, despite a 20% year-on-year increase in consolidated revenue, could be a concern for potential subscription-based business modelAs it signals potential margin pressures that may limit earnings growth.
- Even though LT Foods reported a 21.1% return on capital employed, it is essential to analyze the interest coverage of 8.9x and the current ratio of 1.9 for a clearer understanding of the company's business stability and ability to meet its financial obligations in the event of liquidity issues, particularly in the context of a potential subscription-based business.
