LT Foods has good potential in India: Chugh

Ashish Chugh, Investment Analyst & Author of Hidden Gems feels that food product companies has got good potential in India and LT Foods is a company which is available at PE multiple of 5, which is very reasonable valuations. Chugh told CNBC-TV18, “LT Foods has its rice mill factory at three locations which is Sonipat, Amritsar and Bhopal. The brands of the company are Davat and Heritage. This company has a strong distribution network not only in India but also overseas. About two years back this company acquired a US company called Kusha Inc, which has got a 42% market share of the US rice market. This has been a big positive for LT Foods.” He added, “If we see financials of the company, the first nine months sales of the company is at about Rs 760 crore and PAT is about Rs 24 crore which gives it an annualized EPS of about Rs 12-13. So the stock is currently trading close to Rs 60, which is available at a PE multiple of less than 5.” “Recently the India Agri-Business fund advised by Rabo Equity advisors has taken a stake not just in LT foods but also in one of the subsidiaries of LT Foods which is Davat Foods Ltd. Given all these factors the food product companies have got good potential in India and LT foods is a company which is available at PE multiple of 5 and this is available at very reasonable valuations,” he said.