The Company’s strategy is in line with the strategic pillars of Growth, Margin Expansion and Strengthening of Financial Metrics to create a strong, progressive, sustainable, profitable and growing consumer business across all geographies and Creates Value for all its stakeholders.
Our long-term value creation model is based on efficient top-line and bottom-line growth as well as improved capital efficiency
LT Foods Creates Value by:
Solidifying leadership position across geographies via organic and inorganic routes and Growth via product portfolio expansion through continuous innovation – Our objective is to nourish our flagship brands “Daawat” and “Royal” as well as the regional brands to drive sales growth via a combination of rapid innovation, solid leadership position via organic and inorganic routes, and increased consumer penetration across segments to strengthen market share, widen global distribution network and enhance the financial performance of the Company across business segments, such as Basmati and Other Specialty Rice, Organic Food and Ingredient business and Health and Convenience segment.
The success of our Company is also built on maintaining a diversified portfolio, both in terms of geography and category and its expansion based on changing consumer trends. Our ability to adapt to the changing environment led to the expansion of its product portfolio in the health and convenience platform, leveraging its strong brand presence & distribution strength.
In line with our strategies, the Company has been growing year on year and saw a growth of 12% in its overall revenue, aided by growth in its Basmati & Other Specialty business by 9%, Organic business by 51% and New Product business by 45%. The small pack business also witnessed a growth of 8% versus last year due to increase in home consumption across the globe. Further, the Company also reported a 3 Year CAGR Revenue growth of 9% and PAT growth of 45%.
Investing in Strategic Drivers –
Enhancing operational efficiency for Margin Expansion – We aim to drive our agenda of margin expansion by cost management, benefits of scale and better product mix across all geographies and business segments.
We have continuously worked on margin expansion and it is visible in our 3 Year CAGR Revenue growth of 9%, Gross Profit growth of 22% and EBITDA growth of 19%. The revenue from premium offerings was up by 28% on year on year basis. Our 3-year Profit After Tax CAGR was 45%, reflecting our prudent measures to reduce the interest cost by 37% over a period of 3 years, thereby leading to a reduction in the average fund cost, currently at 5.12%. We also aim to maximise shareholder’s wealth by strategically focusing on profitable growth.
Judicious Capital Allocation and Improved Capital Efficiency – We have a well-defined Capital Allocation Framework in place with prudent financial policies wherein we aim to balance the objectives of ploughing back earnings to support sustained growth, debt reduction and appropriate reward to shareholders through dividend. In combination with our operating performance, this has allowed us to increase our Return on Capital Employed (ROCE) by 193 bps, from 15.6% in FY 21 to 13.6% in FY 20.
We have generated a free cash flow of ₹ 345 crore during the year and will allocate these resources discerningly, focusing on projects with the highest potential to create profit i.e. for growth in the Core Basmati and Other Specialty Rice and Organic business along with an impetus on new growth engines. We also keep evaluating opportunities to grow inorganically to protect and enhance our Return on Capital Employed and sustain attractive financial returns.
Though majority of our debt is Working Capital debt, we have cautiously reduced our overall debt by ₹ 205 crore to ₹ 1,253 crore. The Debt-Equity ratio improved from 0.91 to 0.66 times and the Debt-EBITDA ratio also improved from 2.9 to 2.1.
We strive to maintain a steady stream of dividend to reward our shareholders. Effective FY 21, we have adopted a revised Dividend policy and expect the dividend pay-out ratio in the medium term to be in the range of 20%-30% of Standalone profits.