LT Foods, the owner of the popular basmati brand ‘Daawat,’ has set an ambitious goal of achieving revenues amounting to INR 11,500 crore in the coming five years. This target is driven by their strategic plans to expand the overall basmati category and facilitate a significant shift from unbranded products to their trusted branded offerings.
In the financial year ending on March 31, 2023 (FY23), LT Foods recorded consolidated revenues of INR 6,979 crore. Looking ahead, the company anticipates a substantial growth trajectory, with projected revenues of approximately INR 10,000 crore within the next four years.
According to Ritesh Arora, the CEO of LT Foods for India and Far East Business, consumers have become increasingly health-conscious and focused on hygiene in the post-Covid era.
During a media interaction, Arora mentioned that approximately 50% of basmati-consuming households consist of branded consumers. Arora also highlighted a noticeable transition from loose basmati to packaged basmati. Additionally, considering the growth in population and the rising number of households, there is an expectation of gaining a larger market share.
According to Arora, exports contribute to approximately 60-65% of the firm’s total revenues. However, Arora expressed optimism that the domestic market in India would experience faster growth compared to the export market.
“Per capita income is going up, more people are getting added to the middle class segment… multiple factors will come into play in the next five years that will boost the economy,” he said.
As LT Foods steps up its play in the foods space, the share of value-added products would increase. “We started this initiative a couple of years ago. Today, ready-to-eat or ready-to-cook contribute around 2.5 per cent of our revenues. We are focusing on this segment and growing this,” Arora said.
Last year, LT Foods introduced biryani kits in the value-added segment. “We have got very good response from the market and we plan to scale it up this year,” he said. In the US, ready-to-heat products have been launched.
“In the next five to six years, we are targeting that the new products should be 10 percent of the company’s revenues,” Arora said.
Margins within the value-added segment exhibited a notable increase, ranging between 35-40 percent.
“We are a foods company and we will diversify our offering,” Arora said.
In accordance with this, LT Foods purchased a majority stake of 51% in Golden Star Trading, a US-based company renowned for its jasmine rice brand, during the previous year.
Arora expressed the company’s willingness to consider mergers and acquisitions both in the global and domestic markets.
“As an organisation, we are open to exploring proposals,” he said.