Daawat basmati rice maker LT Foods Q3 profit drops on higher costs; shares slip

LT Foods

27/01/2025 09:39

Jan 27 (Reuters) - India's Daawat' and 'Royal' basmati
rice maker LT Foods  LTOL.NS  posted a 5.2% fall in
third-quarter profit on Monday, as a surge in rice prices after
the government eased export rules spiked costs, sending its
shares down as much as 9.3%.
    The company said consolidated net profit fell to 1.43
billion rupees ($16.56 million) from 1.53 billion rupees in the
October-December quarter.
    While revenue from operations rose 17.2% year on year to
22.75 billion rupees, total expenses jumped 19.2% to 20.94
billion rupees. Cost of its raw materials, which constitutes
around 77% of total expenses, rose nearly 11%.
    LT Foods does not segregate its revenue by segments or
geography.
    The profit drop comes despite the country seeing basmati
rice exports in 2024 surging 16.3% to a record 5.7 million
metric tons, as Saudi Arabia, Iraq and the United Arab Emirates
increased buying, Reuters reported last week.
    India removed a floor price for basmati rice exports in
September last year to help farmers struggling with debt. Higher
costs boost overseas sales while also helping the country retain
its market share. India accounts for around 75% of global
basmati production.
    As the El Nino weather pattern raised the spectre of poor
monsoon rains, India imposed various curbs on rice exports in
2023 and extended them into 2024 to keep local prices in check
ahead of the April-June national election.
    In November, LT Foods said it planned to invest 185 million
riyals ($49.32 million) over the next 5 years in Saudi Arabia
while eying revenue to the tune of 435 million riyals in the
same period. 
    This comes as around 70% of India's basmati rice exports in
FY24 went to the Middle East, with Saudi Arabia now the top
destination at 21.4% share, according to Motilal Oswal.



($1 = 86.3670 Indian rupees)

($1 = 3.7510 riyals)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Rashmi
Aich)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))