L T Foods (LTFOODS)

FairStock Score: 75/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• 5-year revenue CAGR of 13.33% and latest-quarter sales of ₹2,809 Cr show steady expansion.
• ROE of 16.87% and ROCE of 19.18% indicate good capital efficiency.
• Piotroski score of 8/9 and Altman Z of 3.54 point to solid financial health.
• Debt/equity of 0.43 and positive free cash flow of ₹243 Cr provide balance-sheet comfort.
• Promoter holding of 51% aligns management interest with minority shareholders.

Concerns

• At ₹417.80, the stock trades well above Graham Number of ₹218.50, with a stated margin of safety of -84.12%.
• DCF intrinsic value of ₹129.13 is far below the current market price.
• Profit growth of 9.54% is much slower than sales growth of 20.40%, suggesting margin pressure.
• EV/EBITDA of 91.34 and dividend yield of 0.75% offer poor valuation support for income investors.

AI Analysis

I approach every stock with two questions: what sort of business is it, and is the price leaving me a margin of safety? LT Foods is in the unglamorous agricultural products business. The numbers show a steady operator: five-year revenue growth of 13.33%, latest-quarter sales of ₹2,809 Cr, and a profitability record that produces an ROE of 16.87% and ROCE of 19.18%. That tells me management is deploying capital reasonably. Debt-to-equity of 0.43 is acceptable, free cash flow is positive at ₹243 Cr, and the Piotroski score of 8/9 and Altman Z of 3.54 suggest no imminent balance-sheet stress. Promoter holding of 51% is a plus. But I am not buying a business merely because it is decent; I buy it when the price makes sense. Here, the price does not. At ₹417.80, the stock trades at 21.49 times earnings and 3.76 times book value. The Graham Number of ₹218.50 — my conservative benchmark — is far below the market price, and the stated margin of safety of -84.12% is the opposite of what I need. The DCF estimate of ₹129.13 is even more sobering. Meanwhile, profit growth of 9.54% lags sales growth of 20.40%, so this is not an earnings powerhouse; expansion is consuming money somewhere in the P&L. A 0.75% dividend yield offers little compensation. This is a steady, well-managed agricultural player, but it is priced for perfection. If sales growth converts into profit growth and the stock falls to a level closer to my Graham-based safety zone, it would become interesting. Until then, patient investors should keep it on the watchlist and let Mr. Market offer a better price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer