Motilal Oswal assigns a 'BUY' rating to LT Foods with a target price of ₹460. The stock has delivered 125% returns in a year, with b export-driven growth expected.
Stock to buy: Domestic stock markets witnessed a rally for the third consecutive trading session on Wednesday (March 19th). The 30-share BSE Sensex has gained 1,474 points in the last two trading sessions. The index continued its upward trajectory today, trading over 100 points higher. Similarly, the Nifty 50 also displayed strength, surpassing the crucial 22,800 level with a gain of 438 points. However, concerns regarding Trump's trade war persist in the market.
Motilal Oswal's 'BUY' rating, Target ₹460
Brokerage firm Motilal Oswal has recommended buying LT Foods, a small-cap stock in the FMCG sector, assigning it a 'BUY' rating. The brokerage has set a target price of ₹460 for this stock, which is 29% higher than the current price.
LT Foods' Recent Performance:
Tuesday's closing price: ₹358
Wednesday's trading: ₹366 (+3%)
Decline in the last one month: 5%
Decline in three months: 12.59%
Decline in six months: 14.07%
Multibagger Returns in 1 Year - 125%
52-week high: ₹451
52-week low: ₹160
Market Cap: ₹12,763 crore (on BSE)
Reasons for the 'BUY' recommendation:
Motilal Oswal stated that consumption is gradually increasing in India, and the country has sufficient rice reserves. Consequently, the government has decided to remove the Minimum Export Price (MEP) on basmati rice, leading to the expectation of increased exports.
Prospects for LT Foods:
- Export markets offer better margins and higher revenue compared to the domestic market.
- 66% of the company's income comes from exports, which will boost profits.
- The company will benefit from cheaper inventory from the second quarter of FY2025-26.
Growth Projections:
According to Motilal Oswal, LT Foods' revenue, EBITDA, and net profit (PAT) are projected to grow at a CAGR of 14%, 19%, and 25%, respectively, during FY2025-27. The brokerage has valued the stock at 17 times its estimated earnings per share (EPS) for FY2027 and set a target price of ₹460.
