LT Foods (NSE:LTFOODS) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the LT Foods Limited Earnings Conference Call Q1 FY 'twenty seven. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumant Kumar. Thank you, and over to you, sir. Thank you. Good evening, everyone, and very warm welcome to LTFOODS Q1 FY 'twenty seven post result earning call hosted by Motilalu Sulfiramisu Limited.

0:50 On the call today, we have management team being represented by Mr. Ashwini Kumar Arora, Managing Director and CEO Mr. Sachin Gupta, CFO and Mr. Monica Chawla Chagir, Chief Corporate Development Officer. We'll begin the call with the key thoughts from the management team. Thereafter, we will open the floor for Q and A session. I would now like to request the management to share their perspective on the performance of the company. Thank you and over to you, Ashwini. Yes. Thank you, Sumit. Manik, please. Thank you, Sumit, for the introduction. Good evening, everyone, and thank you for joining us today on the post Q1 financial year twenty seven earnings conference call of LT Foods Limited.

1:35 Before we begin, I would like to remind you that certain statements made during this call may constitute forward looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. The result documents are available on our company's website as well as stock exchanges. A transcript of this call will also be made available on the Investors section of the company's website. I'm pleased to share that LT Foods has delivered another strong quarter, achieving 26.4% year on year growth despite the challenging operating environment marked by geopolitical uncertainties, supply chain disruptions and freight volatility.

2:21 This performance reflects the strength of our brands, resilient business model, effectiveness of our long term growth strategy and disciplined execution. Before Mr. Sachin Gupta takes you through the financial highlights, let me briefly update you on the performance across our key geographies. India, the engine that's just getting started. We are growing profitably for the last three straight years with a CAGR of 12%, wherein the profit has grown faster than the revenue with a CAGR of more than 30%. And we believe we still have a huge scope of growth as bathsmatty remains majority unbranded in India as on data as well. And every year, more households shift to branded and trusted bathsmatty.

3:07 Our financial year 30 ambition is a step change of more than doubling the revenue with expanding margins, driven by reaching consumers at every price point, building distinctive brands, expanding availability and scaling our organizational backbone digitally. Also by expanding our portfolio in the adjacent categories by leveraging our brand equity and distribution network. The United States category leadership earned the hard way. We are growing faster than the category. Our U. S. Passmati import share is now more than 60%. Royal and Golden Star continue to pull ahead as clear segment leaders on the back of consistent brand investments, innovation and execution across every channel.

3:54 Tariff shifts created pricing volatility this year and we are focused on converting dollar growth into the real unit growth as the pricing normalizes while broadening our reach across every price point and format. Europe and UK, they both are in the investment phase. So Europe and The UK are currently in investment phase, and we remain very positive about the long term potential these job duties carry. We are continuously investing in the capacity, the cost structure and the right channel mix and we expect these investments to translate into the profitability over the coming quarters in the medium term. Another geography is The Middle East, where we are drilling in roads that's a tough and saturated market. So Middle East is a saturated market and as a relatively new entrant, it is not an easy one to crack for us. Despite regional disruption to shipping this year, our demand held firm and our e commerce business took the number one category position.

4:53 We are approaching the market across multiple price points to build inroads and we are encouraged by the progress so far. Rest of the world, wherein we are strengthening our share, both a small market in terms of the barsmouth consumption, but we are enjoying leadership position in most of the countries and we are further solidifying our position with the continuous brand investments and the distribution expansion. The other segment that we are into which is organic, the financial year 2026 brought cost pressure as we changed the business model from wholesale to the CPG and we expanded our European capacity. We still see organic as one of our most exciting long term bets with wide space in The Americas and in the European organic ingredients, which will help us to balance growth and margins in the medium term.

5:41 India is a proven growth engine still in its early innings as there is a huge potential lies in front of us. The U. S. Is generally category leader working through near term tariff headwinds. Europe and The U. K. Are in the investment phase with strong long term potential. And The Middle East is a tough market wherein we are building inroads. Organic is a long term bet where we are reset course and all the geographies and business segments are moving forward with full rigor. Now I hand over to our CFO, Mr. Sachin Gupta for the detailed financial update. Sachin, over to you please. Thank you, Monica. Good evening, everyone, and thank you for joining us today. LT Foods delivered another strong quarter, reflecting the resilience of our business model and the strength of our brands and the effectiveness of our long term growth strategy.

6:31 During quarter one FY 'twenty seven, the consolidated revenue on a year on year basis grew by 26%. On a normalized basis, it grew by 19% and the revenue stood at INR3161 crores driven by strong demand across our key geographies and sustained momentum in our branded portfolio. The gross profit during this quarter increased by 19% to crores. Diabeta grew by 20% to INR363 crores. Profit after tax stood at INR 183 crores, registering a growth of 9%.

7:18 EPS likewise stood at INR 5.3 per share, a growth of 9%. Profitability remained healthy. However, the EBITDA margins moderated from 11% to 11.5% as compared to 12.1%, primarily due to ongoing restructuring within the organic food segment. Now coming to quarter on quarter basis, the revenue grew by 8%. The gross profit margin grew by 13%, EBITDA grew by 21% and the profit after tax on a quarter on quarter basis grew by 35%. Turning to the segmented performance.

8:04 Our core basmati and the specialties rice business continued to perform exceptionally well, delivering revenue growth of 34% year on year basis to INR2845 crores. Importantly, the volume grew by 11%, demonstrating the sustained consumer preference for our flagship brand across market. Despite the geopolitical uncertainties and trade disruption, this segment EBITDA margin stood at stable 13%, highlighting the strength of our business model and operational execution. In India, the revenue grew by 23% on year over year basis, supported by continued marketing share gain and deeper household penetration.

8:52 Our market share reached to 23.1%, while our household penetration increased to 64.4 lakh household, reinforcing the growth growing strength of our Davat franchise. We also continue to maintain leadership position across e commerce, quick commerce platform, which remains strong drivers of our premiumization and consumer acquisition. International business also continued its growth momentum and contributed 71% of our consolidated revenue with North America maintaining the leadership position with 49% growth. Normalized growth during this quarter was 27%. Middle East and the rest of the world grew by 44%.

9:41 Our brand continues to strengthen in these markets across all geographies. In organic food and ingredient business, witnessed a temporary decline in the revenue due to remodeling of the organic business. The revenue stood at INR $2.54 crores with EBITDA margin at 4%. However, the underlying demand fundamental remains healthy and we are expecting gradual normalization over the coming quarters as the business mix improves. We continue to believe strongly in the long term opportunities within the global organic food market. The ready to heat and ready to cook portfolio delivered revenue growth of 13% on year on year basis with 42% growth coming in the biryani kit. This portfolio continues to represent an important strategic growth revenue for the company.

10:37 Our RTH facility in The U. S. Is expected to become operational in this quarter. With that, it will accelerate the growth in this segment in the upcoming quarters. From the balance sheet perspective, we remain focused on disciplined capital allocation and efficient working capital management. We delivered meaningful improvement across key operating metrics during the quarter. On year on year basis, inventory days reduced from two twenty one days to one hundred eighty seven days. Receivable days improved from thirty days to twenty six days. With these improvements, our overall working capital reduced from one hundred ninety five days to one hundred seventy days.

11:23 These improvements reflect our continued efforts towards enhancing efficiency across the value chain. Our return on capital employed remains robust at 21.1% demonstrating our ability to generate healthy returns, while continuing to invest behind the future growth opportunities. While net debt to EBITDA improved during the quarter to 0.48x, our net debt to equity also remains comfortable at providing adequate flexibility to support future expansion initiatives. To summarize, our quarter one FY twenty twenty seven revenue has been a strong start to the year with record revenue of INR $3,001.61 crores, EBITDA at INR $3.63 crores, PAT at INR 183 crores and EPS of INR 5.3 per share.

12:16 Importantly, these results are in line with our annual estimates and we are on track for the full year across all financial parameters. With this, I now request the operator to open the floor for question and answers. Thank you. We will now begin with the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pooja Pooja Sanghi from Incred Asset Management. Please go ahead.

13:18 Hello? Yes, Pooja. Yeah. So congratulations on a good set of numbers. I wanted to understand how much is the planned CapEx for the Australia facility? You know, we have just opened the company, so there is no plan for the CapEx right now. But we'll see, you know, how it evolves. At the moment, you know, we had just infused a very small equity to open the company. Right. And also second question is if you can give me some regional favor on what are the key drivers that are responsible for driving revenue profitability for each of the regions?

14:09 So for India, I will request Satish to take this question. Hi, Pooja. So for India, the focus is multi folds. We are obviously increasing our distribution. As we move forward, there is a robust plan in play that we've created in the last year, which will... Which is helping us go deeper into every city. So our split expansion is one lever. Every channel is in focus where we are largely focusing on premiumizing our product mix as well as looking at white spaces in the market to launch new products.

14:59 So these two are the key levers for growth in revenue as well as gross margins. Right. Pooja, just to add what Ritesh said, broadly, you know, we have three areas where, you know, we will grow. One is in our core, you know, which is specialty rice. And second is organic and third is RTH and RTC. So the the the specialty rice is across globe and RTH is bigger in USA. So we have doubled our capacity. Hopefully, you know, in three years' time, we are aiming to make our ready to eat business double.

15:53 And Right, sir. Yeah. Yeah. Okay. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Avnish Roy from Numwama. Please go ahead. Yeah. Thank you, and congrats. My first question is on the MVNO impact. So clearly, currently showing off the rise is happening. And of course, in many areas, there is a deficit in some areas that may be also. So if you could update what will be your prognosis of the sewing season, and what will be your plan of action if speed is low because there we know can impact you, and the cost of irrigation also goes up because diesel usage is higher. So how do you see on the margin side given there is inflation?

16:42 And on the yield side, are you now going to source from other markets also if there is an option? Naj, fortunately, so the majority of the Basmati grown area have an alternative irrigation, which is can have on the groundwater. So historically, we have not seen much impact, but there will be little bit impact, but it's too early to project on the exact size of the crop. So by mid of August, we will be very clear. So if there will be lesser crop, then there will be inflation.

17:33 And we have all the plans to make sure that whatever the demands LT has is for brands, it will be met. And if inflation comes, then historically we have been able to pass on to the consumer and quite confident that we will be. Yes. Second question is on India market as a demand side. So two things. One is on organic side, I see companies like Tata Consumer, which has done a brilliant acquisition in that space, ramp up gradually for the India market. I understand you feel that regulations in India are not stringent.

18:23 So you are focusing in terms of organic more outside India. So if you could update on what will be the India plans in the next one or two years on the organic side? Second is on the Vasmati, India, clearly, the number three player we are seeing ramp up Fortune plus. If you could tell us next three years, would you expect top two players to lose market share? And will there be healthy co unit strength? It becomes a slightly three player market with third players still much smaller than the number top two, but still gaining some share. Will you be worried on that? Desh, are you taking this question? Yes. Sure. So you know, for us, the larger focus is on market creation.

19:15 So the focus is to increase the market size of as are are still very underpenetrated as a category. So our focus is on improving our availability and creating market where the larger focus is to gain share from households which are consuming basmati but lose and shifting them to branded basmati. So that's the larger focus on the core basmati side, and we believe that this will lead to increase in our market share. On the organic bit, we've also launched I'm Organic in in ecommerce.

20:01 So we are starting this journey of launching organic product range, and this will continue as we will launch more products in this space in the future. Two quick follow ups, and I'll end there. One is in terms of organic, are you charging a premium versus organic India of Tata Consumer? And on Basmati, any aggressive pricing by the number three player? And have the top two players lost some market share? I'm not referring to the official market share data. If you are referring to that, can you give me a real sense of the market share because that doesn't give the true picture generally? So you have grown the top two players who have grown slower than the number three player because number three player is already out in some results.

20:55 Yes. So we have gained market share in the last quarter. I I don't know about the other plan, but we have gained market share in in the last quarter, both in terms of... In all the channel mix, as you can see in our growth rate as well, that our first quarter growth has been good. And second or the first question on organic, yes, we are charging a premium over in in the space of Basmati and Sonamasuri to all the players that are available in the market. So thank you. That's all from me. Thanks. Thank you, Vinit. Thank you. The next question is from the line of Saurabh Berya from Samiksha Capital. Please go ahead.

21:47 Hi. First of all, congratulations on the great set of numbers. My first question is I would like to just retouch upon the Alino part. What... So largely, Basmati crops remain irrigated, right, from the canal or the the groundwater. So what are the current groundwater levels in the areas where we source from? And till when do you expect it to get utilized? Because below a certain level, we cannot use that groundwater. Right? So what what is the study of ours on that part? So, Saurabh, I may not have the exact data on the water levels, but broadly our ground survey is telling us that and historically we have also seen.

22:36 So till date there is no red alert on that will impact. Some district we have issue, but majority district is not a challenge. But say in 20% of the area where it is grown, there is an issue. But I think we will have an exact thing on by end of August. But more or less, you know, we don't see the crop to be more than last year as we were expecting as, you know, farmer has got a good price last year. So, on the prices will be will remain in the coming crop also.

23:31 Okay. Still on an average, what percentage of the vast majority crops gets supplied via the irrigation and what percentage via the ongoing rainfall? If that I will say 80, 85% is, you know, is by the, alternative sources also which is canal and the groundwater. And 15%, 14%, 15% is where is dependent on the rain. Okay. And the second question, so if we look at the stand alone numbers, so if I talk of the subsidies, can you give me a bifurcation of what are the gross margins and the EBITDA margins separately for the stand alone and for the subsidiaries?

24:26 Because what I see is for the subsidiaries, this quarter, the margins and what the gross and the EBITDA level margins has fallen on a Y o Y basis. So what is your read on that? So the major reason for the fall in the gross margin is two factors. Firstly, the change in the payment or the shipping terms that we have changed from the CIF to C and I basis. And secondly, there has been a drop in the margins in the organic segment. The organic segment initially last year had a gross margin of 35%. This year the margins are at it is at 33%. So this had an effect. Otherwise, on the overall basis, our margins have improved.

25:15 The gross margins have improved and this is reflecting in our EBITDA margins as well. The EBITDA margins, if you look at on the last quarter itself to this quarter, our EBITDA margins have improved. Perfect. Okay. And on the sourcing cost part, so what is the current level of inventories we hold? And what was the if you can share our average price? And going forward, what is the level till we don't have to source for the inventory? Because as price rises, given there's an adverse effect of Lino, we would have impact on the margins on a lag basis, say, for 4Q of FY 'twenty seven or first Q of FY 'twenty eight. So what is your read on that?

26:04 So as far as the inventory level goes now, the inventory as on June 26, our rice inventory is INR 346,000 tonnes at an average rate of INR 56 and Paddy inventory is INR 164,000 tonnes at an average rate of INR 38. So this inventory is the whatever the inventory we have, we have sufficient inventory to service the next year, whatever the branded demand or the sales status. Yes, the new crop or the season what it comes out that we are still beta bot situation as Ashun Yes. So, Saurabh, just to add on the last ask that if the inflation comes and if there is a price rise just last year, As know, I told you, we will we are confident that we will be able to pass on to the consumer. So, there will be no issue on the demand side.

27:07 So because basmati is a specialty rice, premium rice, so there is no impact of demand and on the margin side also. Perfect. Just one last question. Yes. Do would you like to add something? Yes. I said the margin can be historically what we have seen is that Parsnathi is around 13%, 14% EBITDA margin. So there can be a plus minus 1% if you know things happen. Yeah. Perfect. Just one last question. The standing 10% rate got expired on July 24. So what is the current rate? I assume it is 10% again. And what percentage do we pass it on to the consumers?

28:03 No, we have reset our whatever the reduction has been reduced. So that has been the prices has been reset. So the current current rate is 10% as due to the previous rate 10%, it has continued for after that expiry as well. Correct. And we are passing on the entire tariff to the end consumer, right? Yes. Okay. Perfect. That helps. Thank you. Thank you. The next question is from the line of Pooja Tangvi from Incred Asset Management. It's a follow-up question. Hello? Yes, Puja. I just wanted to ask on the geopolitical crisis and how it would have impacted our transport and logistics, And how did we cope with the same?

28:59 Yeah. So, Pooja, it has impacted two geography, big wave. One is The Middle East and Europe and UK. And that has impacted our margin. That's why, you know, in this quarter also, the geography has been negative because of this logistic cost. So hopefully in the coming quarters we will be able to partly pass on to the consumer. But, you know, there is impact on the business in Europe, UK, and Middle East of this disruption.

29:47 In in Middle East, you know, the freight rate has gone from $200 to $4,000. And that market, it was difficult to as competitive landscape has not allowed us to pass on to that market. The next question is from the line of Praveen Kumar from Equitas Capital Advisors. Yeah. Hello. Thanks for the opportunity. I had a couple of questions. One was that you have been referring to restructuring this organic business and, you know, the impact from the same. I just wanted to understand when would we have completed this restructuring, and when can we see the margin improvement from... In this part of the business? So in terms of changing our, you know, route to market, as I, earlier we were selling to the wholesaler, now we are directly selling to the retailer which we call it CPG.

30:58 So all the infra has been set you know, in terms of organization as well as, you know, the CapEx. So now I think in the coming quarters, I think we are expecting that in one and a half year, every quarter it will improve. Okay. Do you have a sense of what it could be by the end of this year, the margins from this segment? Yes. So we are expecting that end of the year, for example, this organic business will be around 70 crores to INR 80 crores of EBITDA. Understood. Understood. Thank you. I had a second question on your experience in the Saudi and the Middle East markets. I understand that the current geopolitical crisis would have has given some setbacks. But adjusted for that, I mean, for that, what has been... What have been your early learnings from, you know, entering this stuff, complete to markets? And, yeah, if you could throw some light on that.

32:08 So you mean to, you know, about Middle East The Southeast. Yeah. Middle East particularly the Saudi market. The Saudi and Middle East is almost same, you know, very mature market, very, you know, tough entry barrier. But as a strategy, we have opted to, you know, we are in this market for the last fifteen years. But we are going slow and steady. Every year, you know, the business is growing. And we are choosing the either channel or the product where we have a better right to win. We are quite confident in the coming time we will make our position respectable position in that kind of market here.

32:58 Because in Middle East and mostly, you know, it's a very commoditized end of the market and we have chosen our playground where we will be growing and making margin also. The next question is from the line of Abhishek Mathur from Systematics Group. Just again on the Middle East market, it's clearly a sizable market. And I think we have, as you mentioned, we have been here for fifteen years. But I think we would just have reached maybe 1,000 odd crores in terms of annual revenues here from the disclosures that you have given.

33:48 So just wanted to wanted some if you can give some more color on what is our strategy now to maybe crack this market further. We would probably have scratched just about 2% to 3% of this market. So what is our strategy in the next maybe five to ten years to further make inroads here? If you can give any color in terms of country wise or product launch wise or distribution wise, how are we planning to sort of make further inroads? Or at some point, is there a thought to maybe exiting, abandoning because we've not made further inroads even after fifteen years? Yes. So as far as the exit is concerned, That's our core business and we will remain in the market.

34:35 As far as the strategy is concerned, very clear strategy that we will mostly play where the gross margins are good and maybe in the premium and mid segment not in the lower side of. And as far as route to market is concerned, in some of the market we will have our distributor in place and in some of the market we will have our direct distribution. So this is broadly the strategy on the product side and as well as go to market step. Okay. And just another question about The growth will be in the range of 15% as the base is small, but we will keep growing in The Middle East.

35:39 Got it, sir. And just a second question on bookkeeping one. The other income for the quarter seems to have been quite low. Any one offs or call outs here? Because in general, the other income for the past two, three quarters has been a bit irregular. So any comment here? So, Shaikh, in the previous quarter, what happened, there was certain revaluation of the investments that happened, and that created an income. So there was a one off income that was there. So now it has normalized everything, and that will this income will remain as such. All right, sir. Got it. Thanks and all the best. Thank you. Thank you. The next question is from the line of Bhavi Chuhan from CarePMS.

36:29 Please go ahead. Congratulations on the good side of numbers, and thanks for the opportunity. So my first question is related to the company has shifted the shipment from TIS to CI. So the freight costs have been reduced. I assume the sales cost should be reduced. But if I look at the other expenses, the absolute numbers, it has been increased from $1,419 crores to 486 crores. Could you please provide the breakup of this? Firstly, I want to state one thing. The... This change in the shipment terms has happened to... With the related party, one of the subsidiaries that is in The US. So we have changed that terms.

37:15 So it is just a movement from the other expenditure that has come to the GP margins. So as regarding the other expenditure, yes, the other expenditure has increased in this quarter from if you're comparing the immediate year on year basis from INR $4.19 crores to $4.86 crores. This is mainly because of the increased operations, if you look at, because now the Golden Star, one of our subsidiaries that has got consolidated. In the last year, it was not getting consolidated. Our revenues were there were no consolidation of the revenue or the expenditure. So this has resulted in an increase in the revenue side as well as the expense side as well.

38:07 Okay. And the second question is related to The U. S. So U. S. Revenue has been grew by 49% on a normalized basis, only 29%. So with end company have, like, talking about some discounts. So is this... Grow is after discount, or it is... The discount is yet to be passed on and it will be in touch coming in next quarter? So it is... The sales are recorded at net basis. So there is no discounting or other things that happen. So it is the the net sales that are being recorded, the promotions, and these are always and as for the accounting itself, this is to be net off. So they have been netted off. Okay.

38:53 And another last one is on the supplier financing side. You know, in the last quarter, the Golden Star was not consolidated. In this quarter, it is consolidated. So that is the normalization. Not not the discounting. Yeah. Yeah. Yeah. Yeah. Got it. So the last question is related to the supplier financing. So supplier financing has increased our interest cost, but, like, our working capital has been reduced because of our reduction in the inventory fees and the details. So how much working capital optimizations have been realized due to this and, like, how much it can be reduced further?

39:41 So we hope we are at the optimum level of the supplier funding or these kinds. So, yes, some leg room of four, five days might be there, but not a major one from this current levels. Okay. That's it. Thank you. Thank you. The next question is from the line of from Asset Management. Please go ahead. Yeah. Good afternoon.. Sir, just I have one last question. Sir, I just wanted to understand, looking at your medium term aspiration of becoming like, global food and energy company, Please exclude that additional investment to business, so which vertical do you expect to contribute the largest share of incremental EBIT over the next two to five years?

40:40 Example, research people.. Your voice was... Let me understand the question. Just a minute. He's saying Yeah. You have a growth aspiration. So just out of these three business segments, which segment you feel would be able to grow faster? Okay. So Yeah. Good question. So, you know, I think the will grow in 10, 12%. The RTH, because it's a small base, that will grow in a, you know, 15, 20%, and organic will be in the range of 10, 12%. That's the guidance has been given. Oh, okay, sir. Thanks. Yeah. The next question is from the line of Pipil Kumar Shah from Sumangal Investments.

41:48 Please go ahead. Hi. Thanks for the opportunity, and congratulations, Swinji Swiniji, for a very good performance. Yes. So my first question is, you give the volume and revenue for each of our more all four major geographies, India, US, Europe, and MENA region? So as regarding the quantitative partner, the India revenue in this quarter itself, it was 109,000 tons of that was there. And internationally, there was 117,000 tons of sales that happened in this quarter itself.

42:38 One lakh 9,000 India and and one lakh US? So that So I think that in time, we can we can, you know, we can give the breakup later on. You know? Okay. And sir, second question is regarding why the margin has reduced so sharply, margin and volume contribution of organic business has contributed so sharply in organic food business. So We have restructured the business model of organic. Earlier, you know, we were selling to the wholesaler. So now we have opened up, you know, our stock and sell distribution in Europe. So we have set up the the plan there, and we have created a full fledged organization, sales organization there.

43:39 That's why, you know, the margin... EBITDA margins are lower, but in terms of gross margins, so we are there. You know? So hopefully with the as I just told that when the business is scaling up by the end of the year, we are expecting the organic business EBITDA to be in the range of which is right now 4% will be in the range of 7% to 8%. And going forward, will come back to the double digit EBITDA. But we sell... We have some sales in US also from organic division. Right, sir?

44:25 Yes. Yes. We sold So what Two are our main market. One is Europe, which is the biggest, and followed by America. Okay. So what is the tariff rate we are paying on organic food at US right now? Same. Same. 10%. 10%? Yes. So that appeal where our tariff was reduced from more than 300% to 75%. So right now, we are not paying 75% on organic food. You're you're confusing with the, you know, the CBD, which is Yes, sir. Like, was on soya thing that is... You know, we are not now exporting soya to USA.

45:14 So, you know, mainly rice and oilseeds go there where, know, we have a 10% duty. And that case is, you know, we have got a reduction already and whatever the balance is left, you know, we are in the court. Hopefully, we will get a, you know, win there. And lastly, sir Go ahead. Sorry. Go ahead. Sorry to interrupt. Sorry to interrupt, mister. You may rejoin the queue for a follow-up question. The next question is from the line of Anupam Mukherjee from Present Capital.

45:59 Please go ahead. Hello. Am I audible? Yes. Yes. I understand there is a 10% tariff also in there. But overall, can you read the graph? Like, in terms of, like, what is driven by higher realization? Can you give some color? You know, if I understood because your voice was equating. So you said your top line has grown, then the volume grows. So it is the impact of two. One is inflation in the commodity, which we have passed on. And second is duty, which was in USA in the if you see.

46:56 The next question is from the line of Nan from Marcellus Investment Managers. Please go ahead. Hello. Thank you so much for the opportunity, and congratulations on an excellent set of numbers. So my question is twofold. The first question that I had was on the market share. So I've been looking at your market share since the last two years in India, and it has consistently gone down from 30% to now 33%. In fact, FY '26 is 23.7%, and it's now 23.1. So any reason why this is going down? Is it because of the competitive intensity, I think, because of that hot clear coming in as someone had mentioned before on the call, or is it something else? So that's the first question. Secondly, in The US, while you've said that scarcity in The US is a far faster growing business, but because it's a smaller market, it's growing at a faster level. Jasmine rice is a larger market growing at a smaller pace.

47:56 Has that changed, or is it is it the same thing same dynamic going on in The US? So thank you. So first of all, you know, as far as India business is concerned, you know, we are consistently growing double digit, you know, around 18% CAGR growth in India for the last, you know Three years. Three years. As far as market share is concerned, you know, this quarter, we have improved. And, you know, two, three years back, Nielsen has reset their, you know, the way of doing the things. But we are consistently, you know, very strong player in all our strong market, which is Maharashtra, Gujarat, MP. We are number one.

48:46 And in some market, you know, the ecommerce, the... We are focusing on ecommerce as in urban market. Lot of sales has gone to ecommerce where we command around 40 plus market share in all platform. As far as household penetration is concerned, you know, we have also increased 20 lakh household in the last year. Hello? Hello? Does that answer your question? Yes.

49:33 It does. So that's the first question. Metallurgy change that happened with recent and not really your market share going down. That answers the first question. The second question, baskety market size and that's been right market size in The US. Has it changed? Has anything changed there? If you can just help us with the No. No. The the the category the category is growing in USA, there is no impact of the duty and all these things. And that's how, you know, our US business is, of course, you know, growing better than the category, but category is also growing. Okay. So no change then? No. No. Alright.

50:20 Yeah. That that was useful. Thank you so much. No change. You. Thank Thank you. The next question is from the line of Uni from GeoJet Investments Limited. Please go ahead. Hi. Thank you for the opportunity. I have two questions. First is regarding the organic segment. Like, what is the expected revenue growth once the restructuring is done? And second is regarding RTH and RPC. Even though there is revenue growth, why EBITDA margin is declining? Is there any change in the target to reach for the breakeven to happen? So in organic business, the guidance we have given is that we will grow in double digit.

51:10 Once this quarter, it has improved and the last quarter last quarter was negative. So going forward, every quarter, we are expecting, and we are confident that it will come back to the double digit margin and double digit growth. As far as RTH is concerned, the breakeven, what we have given the guidance set in So it is a breakeven that will be coming at a revenue size of 400 crores. 400 crores at that, and we are on track on achieving that. It will take two to three years time for achieving that number. So we are on track on achieving. It is just the Okay. It's The US that has somewhat effect what that has done, but we are on track.

52:02 Okay. So in the case of organic segment, whether it's lower double digit or or double digit? In terms of growth or in margin? In terms of both growth and Both revenue and margin. That... That's what I just told that, you know, we are confident that, you know, the organic business both in terms of growth and margin will be double digit in the coming quarters. When I say coming quarters, so we are saying one and a half year. By year 2728, it will be fully back. The next question is from the line of K.

52:51 B. Sankara Rao, an individual investor. Yes. Your mic has been unmuted. Please go ahead, mister Rahul. Are you able to hear me? Yes. Okay. My question is regarding the invalidation of duties that happened with my years.. Any update on whether we are eligible? And if you're eligible, how much? Sir, your voice is a little bit, you know, cracking. So can you repeat the... Your question, please?

53:43 This is regarding the invalidation of duties in the ES Yes. By the court. Yes. So are we eligible for the refunds, and how much we are eligible? No. We are eligible for the refund, and partly, it has come in the first quarter. And yes, but we have not booked an income yet. We are in talk with our customers. Okay. My second question is regarding the convenience food. Currently, we are growing around 13% in the last quarter. And if we have to reach... If we have to level of 25 to 30% level, is it possible?

54:35 Sorry. You know, look at What's possible, sir? We have achieved the revenue growth of 13%. It... Can we achieve 20, 25% growth? Yeah. That's what... You know, we we said that, you know, the new capacity is going to start in the coming time. So in three years' time, we wanted to double the revenue of RTH. That's the goal we are following. Okay. Okay. That's all. Thank you. Thank you, sir. Thank you. The next question is from the line of Saurabh Berya from Sanecia Capital. Please go ahead. It is a follow-up question. Yeah. Thank you. I would like like to just retouch upon the margins. So on a q on q basis, our gross and EBITDA margins has improved.

55:25 So, you know, despite the elevated fleet cost, we are showing an improvement in the gross margins. So what has been the major driver? And can you just quantify that what as a percentage of sales the fleet cost got elevated? I have a follow-up question on this too. So this was my first question. So, Saurabh, what happened in the last quarter, the tariff that was in The U. S, that was at 50%. This has got reduced to 10%. So as you know, we can't be earning margins on the tariff itself. So that was the main reason for the improvement and the decrease, if you call it a decrease in the last quarter. So we are on the basis of that. We have increased the GP margin this year, this this quarter.

56:14 My question was on the free part. Like, what was... As a percentage of sales, how much free got elevated? And despite the elevated free cost, in the 1Q on a q on q basis, our margins are higher. So what is driving that was my central question. So last... In the last quarter, what happened, there was certain one off exceptional events that happened as in our last presentation itself, there was a damage detention and other things that happened in the last quarter. That has phased out in this phased out in this quarter. And as far as the logistic cost as a percentage to revenue, it was almost... It is 4.7% of my revenue cost as the logistic cost.

57:04 So this this has normalized. The last quarter, there were certain exceptional events that affected my margins. Perfect. Secondly, on the Jasmine price versus Basmati, so at what rate the both are going in the North America segment? There... What is the industry size of the both? And on the pricing front, I believe Jasmine prices higher than the normal basmati rice. So are we possessing a higher margins on that part? Or what is the scenario? Any comment on this? So, Harav, you know, two are different. So Jasmine is three times bigger than the basmati rice market. And, you know, there are different consumer for, you know, basmati and Jasmine rice.

57:54 So there is no cannibalization on this. On the pricing side, you know, sometimes Jasmine is more expensive. Sometimes it's basmati is more expensive, and that's how, you know, the pricing is done. Would that answer your question? No. Just to follow-up on this. So can you just provide a rate... Growth rate at which the Basmati and Jasmine So separately growing in the So more or less, you know, both the categories are growing in the range of, you know, five to 10%. But Jasmine is growing little faster than the Basmati growth. And on the margin side, what is the margins that the Golden Star JV possesses? Or or was this? Now Golden Star is unit...

58:47 But Golden Star is 100%. It's not now JV. Yeah. But both both business has a good return on capital employed because in Jasmine business, we have a working capital cycle, which is roughly hundred and twenty days, whereas in, we have a bigger working capital cycle, and therefore, margins are higher. But in terms of return on capital employed, both businesses are healthy. So I believe Vasmati has a higher EBITDA margin, but Dasman has a higher ROIC. Correct? Yeah. Yeah. Yeah. Okay. Got it. Thank you. Yeah. Thank you.

59:35 Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you. So on behalf of the management of LT Foods, we sincerely appreciate your participation in our post earnings call today. We remain excited that there is a good journey that we are eyeing at. So we hope we have been able to address most of your queries and provide clarity on our performance and outlook. For any further questions or follow ups, please feel free to reach out to me or our investor relation partner on. The team will be happy to connect with you offline and assist you with any additional information that you may require. Now you need to please call... Close the call. Thank you once again, and we look forward to staying engaged with all of you.

1:00:21 Thank you. On behalf of, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.