LT Foods' margin slips as expenses outpace revenue growth
Consolidated Q2FY27 profit rose 9.98% YoY, but margin fell 0.70 percentage points as costs grew faster than revenue.
Filed 27 Oct 2026, 15:50 IST · after market close · L T Foods Ltd (LTFOODS)
Key takeaways
- Consolidated Q2FY27 operating margin narrowed 0.70 percentage points YoY to 10.49% as expenses grew 17.85% against revenue growth of 16.94%.
- Net profit rose 9.98% YoY to Rs 180.20 cr, helped by a tax rate 1.37 percentage points lower even as interest expense increased 22.65%.
- Operating margin was 1.98 percentage points below the 12.47% median of 15 reported FMCG peers.
Price around the results
Revenue growth held up, but sequential profit momentum eased
Consolidated revenue grew 16.94% YoY to Rs 3,234.14 cr, while operating profit increased only 9.67% to Rs 339.36 cr. Sequentially, revenue rose 2.61%, but operating profit fell 4.10%, showing weaker conversion of sales into operating earnings in Q2FY27.
Higher costs narrowed the margin; tax aided profit
Expenses grew 17.85% YoY against 16.94% revenue growth, narrowing operating margin by 0.70 percentage points; sequentially, the margin declined 0.74 percentage points as costs rose 3.46% versus 2.61% revenue growth. Interest expense rose 22.65% YoY and depreciation increased 28.39%, although interest fell 14.65% sequentially. The tax rate was 1.37 percentage points lower YoY, while other income contributed 7.75% of pre-tax profit, so net profit growth was not entirely operating-led.
Q2 reversed part of the margin recovery and lagged peers
Operating margin improved from 9.27% in Q4FY26 to 11.23% in Q1FY27 before slipping to 10.49% in Q2FY27. The latest margin was 1.98 percentage points below the 12.47% median for the 15 FMCG peers that had reported, placing LT Foods sixth from the bottom.
Management targets share gains and a larger new-product mix
Management said it aims to improve market share in India and increase the revenue contribution from new product development; the company reported 23.3% YTD value market share in India, up 1.4 points. The presentation said a health-led range and quick-cooking rice were launched in the UAE. Management also said the organic business was affected by remodelling, while North America growth was affected by reduced non-strategic B2B business.
No market reaction yet after the late filing
The consolidated results were filed after market close at 15:50 IST, so there is no post-results move to assess yet. Across eight prior result reactions, the stock rose four times and fell four times, with a median absolute move of 0.82%, indicating a mixed historical response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,234 cr | ₹3,152 cr | +2.61% | +16.94% |
| Other income | ₹19 cr | ₹10 cr | +84.94% | +152.77% |
| Expenses | ₹2,895 cr | ₹2,798 cr | +3.46% | +17.85% |
| Operating profit | ₹339 cr | ₹354 cr | -4.10% | +9.67% |
| Operating margin (%) | 10.49% | 11.23% | — | — |
| Interest | ₹34 cr | ₹40 cr | -14.65% | +22.65% |
| Depreciation | ₹77 cr | ₹74 cr | +3.81% | +28.39% |
| Profit before tax | ₹247 cr | ₹250 cr | -1.06% | +7.92% |
| Tax | ₹67 cr | ₹66 cr | +0.92% | +2.74% |
| Net profit | ₹180 cr | ₹183 cr | -1.77% | +9.98% |
| EPS (₹) | ₹5.19 | ₹5.28 | -1.70% | +9.96% |
Operating margin of 10.49% compares with a Fast Moving Consumer Goods sector median of 12.47% across 15 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company aims to improve market share in India and increase the revenue mix from new product development.
- Expected industry CAGR for basmati and speciality rice is 10–12% in India and North America, 6–8% in Europe and 9–10% in the Middle East.
Expansion
- The company launched a health-led range and quick-cooking rice in the UAE.
New initiatives
- The company is driving digital transformation to support future growth.
- The company plans to use digitally enabled distribution across business verticals.
- The company is enhancing agility, efficiency and productivity in operations through digital transformation.
Competition
- The company reported a 23.3% year-to-date value market share in India.
Problems & risks
- The organic business was affected by remodelling.
- North America growth was affected by reduced non-strategic B2B business.
What to watch
- Whether operating margin moves back above 10.49% after the sequential 0.74-point decline.
- Whether expenses grow more slowly than revenue after rising 17.85% versus 16.94% YoY.
- Whether India value market share moves from 23.3% YTD as management targets a higher new-product revenue mix.