LTFOODS — earnings call

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Prepared remarks

Moderator · Conference Operator

MR. SUMANT KUMAR – MOTILAL OSWAL FINANCIAL SERVICES LIMITED LT Foods Limited July 31, 2026

Ladies and gentlemen, good day, and welcome to the LT Foods Limited Earnings Conference Call Q1 FY27. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone.

Please note that this conference is being recorded.

I now hand the conference over to Mr. Sumant Kumar.

Thank you, and over to you, sir.

Sumant Kumar

Yes.

Thank you.

Good evening, everyone, and a very warm welcome to LT Foods Q1 FY27 post results earnings call, hosted by Motilal Oswal Financial Services Limited.

On the call today, we have management team being represented by Mr. Ashwani Kumar Arora, Managing Director and CEO; Mr. Sachin Gupta, CFO; and Ms. Monika Chawla Jaggia, Chief Corporate Development Officer.

We'll begin the call with the key thoughts from the management team.

Thereafter, we will open the floor for Q&A session.

I would now like to request the management to share their perspective on the performance of the company.

Thank you, and over to you, Moncia.

Questions and answers

14:35:20 +05'30' · Research Analyst

“LT Foods Limited

Monika Chawla Jaggia · Research Analyst

Thank you, Sumant, for the introduction.

Good evening, everyone, and thank you for joining

Moderator · Conference Operator

Thank you.

We will now begin with the question-and-answer session.

First question is from the line of Pooja Sanghvi from InCred Asset Management.

Pooja Sanghvi

Congratulations on a good set of numbers.

I wanted to understand how much is the planned capex for the Australia facility?

Ashwani Kumar Arora

We have just opened the company.

So there is no plan for the capex right now, but we'll see how it evolves.

At the moment, we have just infused the very small equity to open the company.

Pooja Sanghvi

Right.

Okay.

And sir, second question is, if you can give me some regional flavor on what are the key drivers that are responsible for driving revenue and profitability for each of the regions?

Ritesh Arora

Hi, Pooja.

So for India, the focus is multifold.

We are obviously increasing our distribution.

As we move forward, there is a robust plan in play that we've created in the last year, which will which is helping us go deeper into every city.

So outlet expansion is one lever.

Every channel is in focus where we are largely focusing on premiumizing our product mix as well as looking at white spaces in the market to launch new products.

So these 2 are the key levers for growth in revenue as well as gross margins.

Ashwani Kumar Arora

Pooja, just to add what Ritesh said.

So broadly, we have 3 areas where we will grow.

One is in our core, which is specialty rice.

And second is organic and third is RTH and RTC.

So the specialty rice is across globe, and RTH is bigger in USA.

So we have doubled our capacity.

Hopefully, in 3 years' time, we are aiming to make our ready-to-eat business double.

Moderator · Conference Operator

The next question is from the line of Avnish Roy from Nuvama.

Avnish Roy

Congrats.

My first question is on the El Nino impact.

So clearly, currently sowing of the rice is happening.

And of course, in many areas, there is a deficit, some areas, there may be excess also.

So if you could update what will be your prognosis of the sowing season?

And what will be your plan of action if yield is low because El Nino can impact yield.

And the cost of irrigation also goes up because diesel usage is higher.

So how do you see on the margin side, given there is the inflation?

And on the yield side, are you now going to source from other markets also if there is an option?

Ashwani Kumar Arora

Avnish, fortunately, majority of the basmati grown area have an alternative irrigation, which LT Foods Limited July 31, 2026 is canal on the groundwater.

So historically, we have not seen much impact, but there will be a little bit impact, but it's too early to project on the exact size of the crop.

So by mid of August, we will be very clear.

So if there will be a lesser crop, then there will be inflation.

And we have all the plans to make sure that whatever the demands LT has is for brands, it will be met.

And if inflation comes, then historically, we have been able to pass on to the consumer and quite confident that we will be.

Avnish Roy

Second question is on India market as a demand side.

So 2 things.

One is on organic side, I see companies like Tata Consumer, which has done a brilliant acquisition in that space, ramp up gradually for the India market.

I understand you feel that regulations in India are not stringent.

So you are focusing in terms of organic more outside India.

So if you could update on what will be the India plans in the next 1 or 2 years on the organic side?

Second is on the basmati India, clearly the number 3 player, we are seeing ramp up Fortune plus Kohinoor.

So if you could tell us next 3 years, would you expect top 2 players to lose market share?

And will there be healthy co-existence?

It becomes a slightly three- player market with third player still much smaller than the top 2, but still gaining some share?

Would you be worried on that?

Ritesh Arora

Sure.

So for us, the larger focus is on market creation.

So the focus is to increase the market size of basmati as basmati is still very underpenetrated as a category.

So our focus is on improving our availability and creating market where the larger focus is to gain share from households which are consuming basmati, but loose, and shifting them to branded basmati.

So that's the larger focus on the core basmati side, and we believe that this will lead to increase in our market share.

On the organic bit, we've also launched I'm Organic in Daawat in e-commerce.

So we are starting this journey of launching organic product range.

And this will continue as we will launch more products in this space in the future.

Avnish Roy

Two quick follow-up, and I'll end there.

One is in terms of organic, are you charging a premium versus organic India of Tata Consumer?

And on basmati, any aggressive pricing by the number 3 player?

And have the top 2 players lost some market share?

I'm not referring to the official market share data, if you are referring to that, give me a real sense of the market share because that doesn't give the true picture generally.

So you have grown the top 2 players would have grown slower than the number 3 player because number 3 player is already out in terms of results.

Ritesh Arora

Yes.

So we have gained market share in the last quarter.

I don't know about the other players, but we have gained market share in the last quarter, both in terms of the channel mix, as you LT Foods Limited July 31, 2026 can see in our growth rate as well that our first quarter growth has been good. the first question on organic, yes, we are charging a premium in the space of basmati and Sona Masoori to all the players that are available in the market.

Moderator · Conference Operator

The next question is from the line of Saurabh Beria from Sameeksha Capital.

Saurabh Beria

First of all, congratulations on the great set of numbers.

My first question is, I would like to just retouch upon the El Nino part.

So largely, basmati crops remain irrigated, right, from the canal or the groundwater.

What are the current groundwater levels in the areas where we source from?

And till when do you expect it to get utilized?

Because below a certain level, we cannot use that groundwater, right?

So what is the study of ours on that part?

Ashwani Kumar Arora

So Saurabh, I may not have the exact figure on the water level.

But broadly, our ground survey is telling us that historically, we have also seen till date, there is no red alert on that, that it will impact.

Some districts, we have issue.

But majority districts are not a challenge.

But say, in 20% of the area where it is grown, there is an issue.

But I think we can tell by end of August.

But more or less, we don't see the crop to be more than last year as we were expecting as farmer has got a good price last year.

So the prices will remain firm in the coming crop also.

Saurabh Beria

Okay.

Still on an average, what percentage of the basmati crops gets supplied via the irrigation and what percentage via the ongoing rainfall ?

Ashwani Kumar Arora

I will say 80%- 85% is by the alternative sources also, which is canal and the groundwater.

And 14%- 15% is where is dependent on the rain.

Saurabh Beria

Okay.

And the second question, so if we look at the stand-alone numbers, so if I talk of the subsidiaries, can you give me a bifurcation of what are the gross margins and the EBITDA margins separately for the stand-alone and for the subsidiaries?

Because what I see is for the subsidiaries, this quarter, the margins and both the gross and the EBITDA level margins have fallen on a Y-o-Y basis.

So what is your read on that?

Sachin Gupta

So the major reason for the fall in the gross margin is 2 factors.

Firstly, the change in the payment or the shipment terms that we have changed from the CIF to C&I basis.

And secondly, there has been a drop in the margins in the organic segment.

The organic segment initially last year had a gross margin of 35%.

This year, the margins are at 33%.

So this had an effect.

Otherwise, on the overall basis, our margins have improved, gross margins have improved, and this is reflecting in our EBITDA margins as well.

The EBITDA margins, if you look at on the last quarter itself to this quarter, our EBITDA margins have improved.

LT Foods Limited July 31, 2026

Saurabh Beria

Perfect.

Okay.

And on the sourcing cost part, so what is the current level of inventories we hold -- and if you can share your average price share?

And going forward, what is the level till we don't have to source further inventory?

Because as price rises, given there is an adverse effect of El Nino, we would have impact on the margins on a lag basis, say, forQ4 FY27 or first Q1 FY28. So what is your read on that?

Sachin Gupta

So as far as the inventory level goes, the inventory as on June 26, our rice inventory is 3,46,000 tonnes at an average rate of INR56 and paddy inventory is 1,64,000 tonnes at an average rate of INR38.

So this is sufficient inventory to service the next year, whatever the branded demand or the sales that is.

Yes, the new crop or the season, what it comes out, that we are still wait and watch situation, as Ashwani told.

Ashwani Kumar Arora

Yes.

So Saurabh, just to add on the last ask that if the inflation comes and if there is a price rise last year, as I told you, we are confident that we will be able to pass on to the consumer.

So there will be no issue on the demand side.

So because basmati is a specialty rice, premium rice.

So there is no impact of demand and on the margin side also.

The margin can be historically what we have seen is that basmati is around 13%, 14% EBITDA margin.

So there can be a plus/minus 1% if things happen, yes.

Saurabh Beria

Perfect.

Just one last question.

The standing 10% rate got expired on 24th of July.

So what is the current rate?

I assume it is 10% again.

And what percentage do we pass it on to the consumers?

Ashwani Kumar Arora

No, we have reset our reduction has been reduced.

So that has been -- the prices has been reset.

Sachin Gupta

So the previous rate, 10%, has continued for after that expiry as well.

Saurabh Beria

Correct.

And we are passing on the entire tariff to the end consumer, right?

Moderator · Conference Operator

The next question is from the line of Pooja Sanghvi from InCred Asset Management.

It's a follow-up question.

Pooja Sanghvi

I just wanted to ask on the geopolitical crisis and how it would have impacted our transport and logistics and how did we cope with the same?

Ashwani Kumar Arora

Yes.

So Pooja, it has impacted 2 geographies in a big way.

One is the Middle East and Europe and U.K. And that has impacted our margin.

That's why in this quarter also, the geography has been in negative because of this logistic cost.

So hopefully, in the coming quarters, we will be able to partly pass on to the consumer.

LT Foods Limited July 31, 2026 But there is an impact on the business in Europe, U.K. and Middle East of this disruption.

In Middle East, the freight rate has gone from $200 to $4,000.

And that market was difficult to as competitive landscape has not allowed us to pass on to that market.

Moderator · Conference Operator

The next question is from the line of Praveen Kumar from Acuitas Capital Advisors.

Praveen Kumar

I had a couple of questions.

One was that you have been referring to restructuring this organic business and the impact from the same.

So just wanted to understand when would we have completed this restructuring?

And when can we see the margin improvement in this part of the business?

Ashwani Kumar Arora

So in terms of changing our route to market earlier, we were selling to the wholesaler.

Now we are directly selling to the retailer, which we call CPG.

So all the infra has been set in terms of organization as well as the capex.

So now I think in the coming quarters, I think we are expecting that in 1.5 years, every quarter, it will improve.

Praveen Kumar

Okay.

Do you have a sense of what it could be by the end of this year, the margins from this segment?

Ashwani Kumar Arora

Yes.

So we are expecting that end of the year, for example, this organic business will be around INR70 crores to INR80 crores of EBITDA.

Praveen Kumar

Understood.

I had a second question on your experience in the Saudi and the Middle East markets.

I understand that the current geopolitical crisis would have given some setbacks.

But adjusted for that, except for that, what have been your early learnings from entering these tough competitive markets?

If you could throw some light on that.

Ashwani Kumar Arora

So you mean to about Middle East?

Praveen Kumar

Yes, Middle East, particularly is the Saudi market.

Ashwani Kumar Arora

Saudi and Middle East is almost same, very mature market, very tough entry barrier.

But as a strategy, we have opted to in this market for the last 15 years, but we are going slow and steady.

Every year, the business is growing.

And we are choosing the either channel or the product where we have a better right to win.

We are quite confident in the coming time; we will make our position respectable position in that kind of market.

Because, in Middle East, mostly, it's a very commoditized end of the market, and we have chosen our playground where we will be growing and making margin also.

Moderator · Conference Operator

The next question is from the line of Abhishek Mathur from Systematix Group.

LT Foods Limited July 31, 2026

Abhishek Mathur

Just again, on the Middle East market, it's clearly a sizable market.

And I think as you mentioned, we have been here for 15 years.

But I think we would just have reached maybe INR1,000-odd crores in terms of annual revenues here from the disclosures that you have given. –So if you can give some more color on what is our strategy now to maybe crack this market further.

We would probably have scratched just about 2% to 3% of this market.

So what is our strategy in the next maybe 5 to 10 years to further make inroads here?

If you can give any color in terms of country-wise or product launch-wise or distribution-wise, how are we planning to sort of make further inroads?

Or at some point, is there a thought to maybe exiting or abandoning because we have not made further inroads even after 15 years.

Yes.

Ashwani Kumar Arora

So as far as the exit is concerned, so no, that's our core business, and we will remain in the market.

As far as the strategy is concerned, it's a very clear strategy that we will mostly play where the gross margins are good and maybe in the premium and mid-segment, not in the lower side.

And as far as route to market is concerned, in some of the market, we will have our distributor in place.

And in some of the market, we will have our direct distribution.

So this is broadly the strategy on the product side and as far as go-to-market strategy.

The growth will be in the range of 15% as the base is small, but we will keep growing in the Middle East.

Abhishek Mathur

Got it, sir.

And just a second question, a bookkeeping one.

The other income for the quarter seems to have been quite low.

Any one-offs here?

Because in general, the other income for the past 2, 3 quarters has been a bit irregular.

So any comment here?

Sachin Gupta

So Abhishek, in the previous quarter, there was certain revaluation of the investments that happened, and that created an income.

So there was a one-off income that was there.

So now it is normalized everything and this income will remain as such.

Moderator · Conference Operator

The next question is from the line of Bhavi Chauhan from Care PMS.

Bhavi Chauhan

Congratulations on good set of numbers.

Sir, my first question is related to the company has shifted the shipment from CIF to C&I.

So the freight costs have been reduced.

I assume the sales cost should be reduced.

But if I look at the other expense as the absolute numbers, it has been increased from INR419 crores to INR486 crores.

Could you please provide the breakup of this?

Sachin Gupta

Firstly, I want to state one thing.

This change in the shipment terms has happened with a related party, one of the subsidiaries that is in the U.S. So we have changed that terms.

So it is just the movement from the other expenditure that has come to the GP margins.

So regarding the other expenditure, yes, the other expenditure has increased in this quarter from LT Foods Limited July 31, 2026 if you're comparing with the immediate year-on-year basis from INR419 crores to INR486 crores.

This is mainly because of the increased operations, if you look at because now the Golden Star, one of our subsidiaries, that has got consolidated.

In the last year, it was not getting consolidated.

There was no consolidation of the revenue or the other expenditure.

So this has resulted in an increase in the revenue side as well as the expense side as well.

Bhavi Chauhan

Okay.

And the second question is related to the U.S. U.S. revenue grew by 49% on a normalized basis on the 29%.

The company was talking about some discounts.

So this growth is after discount or the discount is yet to be passed on and it will be impact coming in next quarter?

Sachin Gupta

The sales are recorded at net basis.

So there is no discounting or other things that happen.

So it is the net sales that are being recorded, the promotions and these are always as per the accounting itself, this is to be net off.

So these have been netted off.

Bhavi Chauhan

Okay.

And another last one is on the supplier financing side.

Ashwani Kumar Arora

In the last quarter, the Golden Star was not consolidated.

In this quarter, it is consolidated.

So that is the normalization.

Sachin Gupta

Not the discounting.

Bhavi Chauhan

Yes, yes.

Got it.

So the last question is related to the supplier financing.

So supplier financing has increased our interest cost, but like our working capital has been reduced because of our reduction in the inventory fees and debtor daysSo how much working capital optimizations have been realized due to this and like how much it can be reduced further?

Sachin Gupta

So we hope we are at the optimum level of the supplier funding of these kinds.

So yes, some legroom of 4-5 days might be there, but not a major one from this current level.

Moderator · Conference Operator

The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers.

Rehan Saiyyed

Sir, I have one last question.

So I just wanted to understand looking at your medium-term aspiration of becoming like global food and organic company, if we exclude the traditional basmati business, so which vertical do you expect to contribute the largest share of incremental EBIT over the next 2 to 5 years?

Ashwani Kumar Arora

Okay, good question.

So I think the basmati will grow in 10%, 12%.

The RTH because it's a small base, that will grow in 15%, 20% and organic will be in the range of 10%, 12%.

That's the guidance.

LT Foods Limited July 31, 2026

Moderator · Conference Operator

The next question is from the line of Vipulkumar Shah from Sumangal Investments.

Vipul Shah

Yes. my first question is, can you give the volume and revenue for each of our 4 major geographies, India, U.S., Europe and MENA region?

Sachin Gupta

So as regarding the quantitative one, the India revenue in this quarter itself, it was 1,09,000 tonnes.

And internationally, there was 1,17,000 tonnes of sales that happened in this quarter itself.

Vipul Shah

Okay.

And sir, second question is regarding why the margin has reduced so sharply margin and volume contribution of organic business has contributed so sharply in organic food business.

Ashwani Kumar Arora

We have restructured the business model of organic.

Earlier, we were selling to the wholesaler.

So now we have opened up our stock and sell distribution in Europe.

So we have set up the plant there, and we have created a full-fledged organization, sales organization there.

That's why the margin -- EBITDA margins are lower, but in terms of gross margins, we are there.

So hopefully, I just told that when the business is scaling up by the end of the year, we are expecting the organic business EBITDA to be in the range of -- which is right now 4% will be in the range of 7% to 8%.

And going forward, it will come back to the double-digit EBITDA.

Vipul Shah

we have sales in U.S. also from organic division, right, sir?

Ashwani Kumar Arora

Yes, yes.

So 2 are our main markets.

One is Europe, which is the biggest and followed by America.

Vipul Shah

Okay.

So what is the tariff rate we are paying on organic food at U.S. right now?

Ashwani Kumar Arora

Same 10%.

Vipul Shah

So that appeal where our tariff was reduced from more than 300% to 75%.

So right now, we are not paying 75% on organic.

Ashwani Kumar Arora

You're confusing with the soya case CVD, which was on soya.

We are not now exporting soya to USA.

So mainly rice and oilseeds go there, where we have a 10% duty. we have got a reduction already.

And whatever the balance is left, we are in the court.

Hopefully, we will get a win there.

LT Foods Limited July 31, 2026

Moderator · Conference Operator

The next question is from the line of Anubhav Mukherjee from Prescient Capital.

Anubhav Mukherjee

Sir, in your rice business, the volume growth was 11%, but the revenue growth was 32%.

I understand there is a 10% tariff also in US.

But overall, can you bridge that gap in terms of like, what is driven by higher realisation?

Can you give some color?

Ashwani Kumar Arora

So you said your top line has grown than the volume growth.

So it is the impact of 2.

One is inflation in the commodity, which we have passed on.

And second is duty, which was in USA.

Moderator · Conference Operator

The next question is from the line of Nan from Marcellus Investment Managers.

Nan

Congratulations on excellent set of numbers.

So my question is twofold.

The first question that I had was on the market share.

So I've been looking at your market share since the last 2 years in India, and it has consistently gone down from 30% to 10% to now 33%.

In fact, FY26 was 23.7%, and it's now 23.1%.

So any reason why this is going down?

Is it because of the competitive intensity rising because of that third player coming in as someone had mentioned before on the call?

Or is it something else?

So that's the first question.

Secondly, in the U.S., whilst you've said that basmati in the U.S. is a far faster-growing business, but because it's a smaller market, it's growing at a faster level.

Jasmine rice is a larger market growing at a smaller pace.

Has that changed?

Or is it the same thing, same dynamic going on in the U.S.?

Ashwani Kumar Arora

So thank you.

So first of all, as far as India business is concerned, we are consistently growing double digit, around 18% CAGR growth in India for the last 3 years.

As far as market share is concerned, this quarter, we have improved.

And 2, 3 years back, Nielsen has reset their ways of doing the things.

But we are consistently very strong player in all our strong market, which is Maharashtra, Gujarat, MP, we are number 1.

And in some market, the e-commerce, we are focusing on e-commerce as in urban market, a lot of sales has gone to e-commerce, where we command around 40-plus market share in all platform.

As far as household penetration is concerned, we have also increased 20 lakh households in the last year.

Moderator · Conference Operator

Nan, does that answer your question?

Nan

Yes, it does.

So that's the first question, methodology change that happened with Nielsen and not really your market share going down.

That answers the first question.

The second question is on basmati market size and Jasmine rice market size in the U.S. Has it changed?

LT Foods Limited July 31, 2026 Has anything changed there?

If you can just help us.

Ashwani Kumar Arora

No. The category is growing in USA.

So there is no impact of the duty and all these things.

And that's why our U.S. business is, of course, growing better than the category, but category is also growing.

Nan

Okay.

So no change there?

Ashwani Kumar Arora

No.

Moderator · Conference Operator

The next question is from the line of Unni from Geojit Investments Limited.

Unni

I have 2 questions.

First is regarding the organic segment.

Like what is the expected revenue growth once the restructuring is done?

And second is regarding RTH and RTC.

Even though there is revenue growth, why EBITDA margin is declining?

Is there any change in the target to reach for the breakeven to happen?

Ashwani Kumar Arora

So in organic business, the guidance we have given is that we will grow in double digit. -- This quarter, it has improved in the last quarter -- last quarter was negative.

So going forward, every quarter, we are expecting and we are confident that it will come back to the double- digit margin and double-digit growth.

As far as RTH is concerned, the breakeven, what we have given the guidance.

Sachin Gupta

So it is the breakeven that will be coming at a revenue size of INR400 crores.

INR400 crores at that, and we are on track on achieving that.

It will take 2 to 3 years' time for achieving that number.

So we are on track on achieving.

It is just the RTH in the U.S. that has somewhat affect what that has done, but we are on track.

Unni

Okay.

So in the case of organic segment, whether it's lower double digit or double digit?

Ashwani Kumar Arora

No, in terms of growth or in margin?

Unni

In terms of both growth and margin.

Ashwani Kumar Arora

That's what I just told that we are confident that the organic business, both in terms of growth and margin will be double digit in the coming quarters.

When I say coming quarters, so we are saying 1.5 year by year '27-'28, it will be fully back.

Moderator · Conference Operator

The next question is from the line of K B Sankara Rao, an Individual Investor.

K B Sankara Rao

This is regarding the refund of duties in the U.S. by the court.

So are we eligible for the refunds and how much we are eligible?

LT Foods Limited July 31, 2026

Ashwani Kumar Arora

Yes, we are eligible for the refund and partly it has come in the first quarter.

And yes, but we have not booked any income yet.

We are in talk with our customers.

K B Sankara Rao

Okay.

My second question is regarding convenience food.

Currently, we are growing around 13% in the last quarter.

And if you have to reach 25% to 30% levels, is it possible?

Sachin Gupta

We have achieved a revenue growth of 13%.

Can we achieve 20%-25% growth?

Ashwani Kumar Arora

Yes.

That's what we said that the new capacity is going to start in the coming time.

So in 3 years' time, we wanted to double the revenue of RTH.

That's the goal we are following.

Moderator · Conference Operator

The next question is from the line of Saurabh Beria from Sameeksha Capital.

It is a follow- up question.

Saurabh Beria

I would like to just retouch upon the margins.

So on a Q-on-Q basis, our gross and EBITDA margins have improved.

So despite the elevated freight cost, we are showing an improvement in the gross margins.

So what has been the major driver?

And can you just quantify that what as a percentage of sales, the freight cost got elevated?

I have a follow-up question on this, too.

So this was my first question.

Sachin Gupta

So Saurabh, what happened in the last quarter, the tariff that was in the U.S., that was at 50%.

This has got reduced to 10%.

So as you know, we can't be earning margins on the tariff itself.

So that was the main reason for the improvement and the decrease, if you call it a decrease in the last quarter.

So we are on the basis of that, we have increased the GP margins this year -- this quarter.

Saurabh Beria

My question was on the freight part.

Like what was as a percentage of sales, how much freight got elevated?

And despite the elevated freight cost in the 1Q on a Q-on-Q basis, our margins are higher.

So what is driving that was my central question.

Sachin Gupta

So last quarter, what happened, there were certain one-off exceptional events that happened in our last presentation itself, there was a damage retention.

That has phased out in this quarter.

And as far as the logistic cost as a percentage to revenue, it was almost it is 4.7% of my revenue cost as the logistic cost.

So this has normalized.

The last quarter, there were certain exceptional events that affected my margins.

Saurabh Beria

Perfect.

Secondly, on the Jasmine rice versus basmati.

So at what rate both are going in the North America segment?

What is their industry size?

And on the pricing front, I believe Jasmine price is higher than the normal basmati rice.

So are we possessing a higher margin on that part?

Or what is the scenario?

Any comment on this?

Ashwani Kumar Arora

So Saurabh, 2 are different.

So Jasmine is 3x bigger than the basmati rice market.

And there LT Foods Limited July 31, 2026 are different consumer for basmati and Jasmine rice.

So there is no cannibalization on this.

On the price side, sometimes Jasmine is more expensive, sometimes basmati is more expensive, and that's how the pricing is done.

Hope that answers your question.

Saurabh Beria

Just a follow-up on this.

So can you provide a growth rate for basmati and Jasmine separately?

Ashwani Kumar Arora

So more or less, both the categories are growing in the range of 5% to 10%.

But Jasmine is growing a little faster than the basmati growth.

Saurabh Beria

And on the margin side, what is the margins that the Golden Star JV possesses ?

Ashwani Kumar Arora

Golden Star is 100%.

It's not now a JV.

Yes.

But both business has a good return on capital employed because in Jasmine business, we have a working capital cycle, which is roughly 120 days, whereas in basmati, we have a bigger working capital cycle, and therefore, gross margins are higher.

But in terms of return on capital employed, both businesses are healthy.

Saurabh Beria

So I believe basmati has a higher EBITDA margin, but Jasmine has a higher ROIC, correct?

Ashwani Kumar Arora

Yes. .

Moderator · Conference Operator

That was the last question for today.

I now hand the conference over to the management for closing remarks.

Over to you.

Monika Chawla Jaggia · Research Analyst

On behalf of the management of LT Foods, we sincerely appreciate your participation in our post earnings call today.

We remain excited that there is a growth journey that we are eyeing at.

So we hope we have been able to address most of your queries and provide clarity on our performance and outlook.

For any further questions or follow-ups, please feel free to reach out to me or our Investor Relations partner, Ernst & Young.

The team will be happy to connect with you offline and assist you with any additional information that you may require.

Now you may please close the call.

Thank you once again, and we look forward to staying engaged with all of you.

Thank you.

Moderator · Conference Operator

On behalf of Motilal Oswal, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.