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Brickwork reaffirms credit ratings of LT Foods; Stock spurts 6%

The long-term credit rating of the company has been reaffirmed at BWR A + (Stable) and short-term rating at BWR A1+.

December 24, 2021 2:16 IST | India Infoline News Service
LT Foods
Brickwork Ratings India Private Limited on Thursday has reaffirmed the long-term credit rating of BWR A + (Stable) on LT Foods Limited facilities and the short-term credit rating of BWR A1+.

At around 2.18 pm, LT Foods Ltd was trading at Rs79.35 per piece up by Rs4.45 or 5.94% from its previous closing of Rs74.90 per piece on the BSE.
The scrip opened at Rs75.70 and has touched a high and low of Rs81.05 and Rs74.50 respectively.

“The rating reaffirmation is underpinned by the company’s strong business profile and consistent improvement in the credit profile and financial performance in FY21 and H1FY22, in turn, driven by a growing EBITDA and PAT in its resilient Consumer Speciality Rice and Rice Food Products Business, along with comfortable credit ratios. The ratings continue to factor in the company’s long track record and experienced management, strong distribution network, diversified product portfolio and strong brand recall, geographical diversification and large scale of operations, coupled with a sound financial risk profile,” company shared Brickwork’s rating rationale.

It further said, the rating is, however, constrained by the inherent business risks of the susceptibility of the profitability margins to an adverse movement in raw material prices, competitive nature of the industry, working capital intensity and exposure to commodity, currency and agro climatic risks, which could result in pressure on the margins.

The rating outlook is Stable on account of a sound demand outlook for the rice industry for both the short and medium term due to its essential nature and is hence, not impacted much by the Covid-19 pandemic.

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