LT Foods, a leading player within the speciality rice business, on Wednesday received an up-gradation of credit rating by Ratings. It has upgraded its score on the long-term financial institution amenities of LT Meals from ‘CRISIL A-’ to ‘CRISIL A’. The short-term ranking financial institution amenities of LT Foods have also been upgraded from ‘CRISIL A2+’ to ‘CRISIL A1’.
A release issued by the company stated that the upgrade reflects steady improvement within the group’s business and financial threat profiles. The group has achieved operating revenue of Rs 3,499 crore in first 9 months of fiscal 2021 compared to Rs 2,948 crore in first nine months of fiscal 2020, which was aided by greater volumes achieved in each rice and organic enterprise despite the impact of the Covid-19-induced lockdowns on the HORECA segment especially in first half of fiscal 2021.
EBIDTA (earnings before revenue, depreciation, tax and amortisation) margin was additionally larger at 12.4% for the first nine months of fiscal 2021 compared to 11.5% for the corresponding period of the earlier fiscal, aided by larger realisations within the rice enterprise, especially within the first quarter of fiscal 2021 and change of product mix towards high-margin products. Going ahead, CRISIL Ratings expects the enterprise threat profile to proceed to enhance over the medium term. The financial risk profile has also improved as is reflected in debt-to-EBITDA of 2.2 times as on December 31, 2020 which is well below CRISIL Ratings’ expectations of maintaining the aforementioned ratio of 3 times over the medium term. CRISIL Scores expects the ratio to stay under 2.5 occasions over the medium time period despite increase in revenues.
The ratings continue to reflect the LT Foods sturdy market position in its segment – specialty basmati rice and consumer meals business, leading to gross sales development, margin enlargement and strengthening of financial metrics. The scores also issue in the group’s diversified geographical reach through strong leading brands (Daawat in the Indian market and Royal within the US market), established advertising and distribution community and strengthened monetary profile, a launch issued by the corporate stated.
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