LTFOODS - LT Foods Limited Share Price

1. Question: Could you explain what really is happening on the tariff front? How much have we been able to pass to the end customer until now, and what is our pricing strategy going forward?

Answer: We've passed most of the 50% tariffs imposed on imports. In January, we noticed some slowdown in mainstream consumption, but that may change as people sometimes buy ahead of price hikes. We'll have clearer insights in Q4 regarding consumption patterns. Most of the duty has been absorbed, but the impact of increased input costs needs to be assessed over the next six months as we navigate our pricing strategy.

2. Question: You mentioned that paddy prices have gone up. What would be the year-on-year price rise in paddy?

Answer: The average increase in paddy prices is around 7% to 8%. However, depending on the variety, some may be at par or slightly lower. Our current stock levels indicate an approximate 4-4.5% increase in prices as of December, and we expect similar trends throughout the buying season, extending through March.

3. Question: Regarding the organic segment, we've seen a revenue decline this quarter despite growing capacity. What happened?

Answer: The decline is primarily due to seasonal adjustments and transitioning from old to new crop stock. Although quarterly numbers may show a dip, annual growth remains positive as we continue to invest for future scalability. We expect a return to healthier growth as seasonal factors stabilize and our capacities mature.

4. Question: You've indicated lower basmati production this year. Can we expect continued price increases in the coming quarters?

Answer: Yes, due to lower production and yield issues, prices are projected to rise further. We typically secure about 80% of our procurement in advance, and we will gradually pass on these increased costs to customers, monitoring how these changes impact demand and margins by the quarter's end.

5. Question: What impact is the increase in tariffs having on consumer behavior with our basmati rice in the U.S.?

Answer: We're seeing some consumer resistance to price increases, leading to a slight slowdown in January. However, it's important to note that such fluctuations are often temporary. By the end of Q4, we'll have a clearer picture of the ongoing consumer behavior trends, influenced both by price and the strength of our brand.

6. Question: Can you clarify the status on exports to Iran, especially in regard to new tariffs?

Answer: Currently, we do not engage in exports to Iran, so we are not impacted by the potential 25% tariffs associated with trade relations involving Iran. Our primary focus remains on strengthening our existing markets, where we see growth potential.

7. Question: Regarding our revenue in the Europe segment, what's the expectation on future growth?

Answer: Our target for the UK segment is to grow from roughly GBP 45 million to GBP 100 million over the next five years. The major portion of our recent growth stems from improved capacities and operations in the UK, and we remain optimistic about consistent revenue increases moving forward.

8. Question: How are we addressing the margin pressures that have led to a decline in PAT margin?

Answer: The current margin pressures stem from geopolitical disruptions and increased input costs. However, we're focusing on maintaining strong operational foundations, targeting an overall ROCE improvement to around 23%. We believe that our diversified operations and brand strengths position us well for overcoming these challenges in the longer term.