LT Foods’ Q3 margins contract as input costs rise; profit up 8%
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LT Foods reported a slower growth in profitability and margin pressure in the December quarter even as revenue rose at a strong double-digit pace, with the company flagging near-term stress from US tariff-related developments that could weigh on costs going ahead.
For the third quarter ended December 2025, the basmati rice and packaged foods maker posted an 8% year-on-year rise in consolidated profit after tax to ₹157 crore, significantly trailing its 23% revenue growth to ₹2,812 crore. EBITDA margins slipped 20 basis points year-on-year to 11.3%, while PAT margins declined sharply by 80 basis points to 5.6%, reflecting rising input costs and pricing pressures.
Managing director and CEO Ashwani Arora said, “Despite a dynamic global environment, we are pleased to report that the first 9 months of FY’26 demonstrated a strong and resilient performance for LT Foods. Our robust business model, disciplined execution, and unwavering focus on quality and consumer relevance enabled us to deliver healthy growth, reinforcing the strength and agility of our organisation.”
Despite the margin compression, LT Foods continued to deliver strong top-line momentum across geographies and segments. For the nine months ended December 2025, consolidated revenue rose 24% year-on-year to ₹8,085 crore, while EBITDA grew 20% to ₹936 crore. Net profit for the period increased 9% to ₹490 crore, with PAT margins narrowing to 6.1% from 6.9% a year earlier.
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However, the company acknowledged emerging challenges, particularly in the company’s largest overseas market. “We are witnessing some near-term pressure arising from US imposed tariff-related developments. While the input cost has increased, we have to see how it is going to impact us in the near future,” it said.
The company’s core basmati and speciality rice business grew 26% year-on-year during the nine-month period, though LT Foods noted that normalised growth stood at 12% after adjusting for the impact of US tariffs and the Golden Star business. The organic foods and ingredients segment recorded a 15% growth, driven by rising demand for clean-label and sustainable food products globally.
Geographically, the US remained a key growth driver, with reported revenue growth of 50% year-on-year, though the company again pointed out that underlying growth was lower when adjusted for tariff-related factors. Europe posted a 35% increase in revenue, supported by expanded market reach and higher demand for premium offerings.
In India, LT Foods continued to strengthen its flagship Daawat brand, with household penetration rising to 58.11 lakh homes, according to Kantar data. The company also expanded its ready-to-heat and ready-to-cook portfolio, with revenues from this segment reaching ₹138 crore during the nine-month period.
Arora said the company’s focus remains on balancing growth with resilience amid global uncertainty. “Our robust business model and disciplined execution enabled us to deliver healthy growth, reinforcing the strength and agility of our organisation,” Arora said.
While LT Foods’ balance sheet continued to improve, with net debt-to-EBITDA declining to 0.95, the softer margin profile suggests that sustaining profitability growth could be challenging if cost pressures persist in key international markets.