LT Foods surges 4%, hits new high on fund raising plan; up 12% in 3 days

The company's board will discuss future strategic plans, inter-alia, potential raising of funds, in their forthcoming meeting on Monday, October 31, 2022

Shares of LT Foods hit a new high of Rs 135.80 as they surged 4 per cent on the BSE in Thursday's intra-day trade, amid heavy volumes, after the company announced fund raising plan. In the past three days, the stock has rallied 12 per cent, while it has zoomed 54 per cent in past three months. In comparison, the BSE Sensex gained 7 per cent in three months.

LT Foods, engaged in the manufacture and sale of rice under the brand Daawat, said on Tuesday that the board will also discuss future strategic plans, inter-alia, potential raising of funds, in their forthcoming meeting on Monday, October 31, 2022.

The company will also consider and approve unaudited financial results for the quarter ended September 30, 2022 and to consider declaration of interim dividend on the same day.

At 02:30 PM, LT Foods was trading 3 per cent higher at Rs 133.75, as compared to 0.08 per cent gain in the S&P BSE Sensex. The average trading volumes on the counter more-than-doubled, with a combined 8.1 million shares changing hands on the NSE and BSE till the time of writing of this report.

LT Foods is the second-largest branded basmati rice player in India with a market share of around 27 per cent, and the largest selling basmati brand in the US with a 50 per cent market share in FY22, according to the management. The company has a strong product portfolio of nine brands, with the flagship brand Dawaat commanding a high recall. The group has a track record of more than five decades in the basmati rice industry.

Basmati rice is a geographical indication product, grown only in a certain parts of India and Pakistan, and is among the most expensive varieties globally due to which it only forms merely around 2 per cent of the domestic consumption.

"However, with increasing disposable income and affluence, the demand for basmati rice is likely to increase over the medium term. Furthermore, the share of branded basmati (30 per cent-40 per cent) is likely to increase over the medium term with higher brand consciousness, which augurs well for LT Foods," according to the rating agency India Ratings and Research (Ind-Ra).