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 th is 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.

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.

Thank you, Sumant, for the introduction. Good evening, everyone, and thank you for joining us today on the post Q1FY27earnings conference call of LT Foods Limited. Before we begin, I would like to remind you that certain statements made during th is call may constitute forward -looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. The results documents are available on our company's website as well as stock exchanges. A transcript of this call will also be made available on the Investors section of the company's website. I'm pleased to share that LT Foods has delivered another strong quarter, achieving 26.4% year-on-year growth despite a challenging operating environment marked by geopolitical uncertainties, supply chain disruptions and freight volatility. This performance reflects the strength of our brands, resilient business model, effective ness of our long -term growth strategy and disciplined execution. Before Mr. Sachin Gupta takes you through the financial highlights, let me briefly update you on the performance across our key geographies.

India, the engine that is just getting started. We are growing profitably for the last 3 straight years with a CAGR of 12%, wherein the profit has grown faster than the revenue with a CAGR of more than 30%. And we believe we still have a huge scope of growth as basmati remains majority unbranded in Indi a as on date as well. Every year, more household shifts to branded and trusted basmati. Our FY'30 ambition is a step change of more than doubling the revenue with expanding margins driven by reaching consumers at every price point, building distinctive bra nds, expanding availability and scaling our organizational backbone digitally. Also by expanding our portfolio in the adjacent categories by leveraging our brand equity and distribution network. The United States, category leadership earned the hard way. We are growing faster than the category. Our U.S. basmati import share is now more than 60%. Royal and Golden Star continue to pull ahead as clear segment leaders on the back of consistent brand investments, innovation and execution across every channel. Tariff shifts created pricing volatility this year, and we are focused on converting dollar growth into the real unit growth as the pricing normalizes while broadening our reach across every price point and format. Europe and U.K., they both are in the investment phase. Europe and the U.K. are currently in investment phase, and we remain very positive about the long -term potential these geographies carry. We are continuously investing in the capacity, the cost structure and the right channel mix, and we expect these investments to translate into the profitability over the coming quarters in the medium term. Another geography is the Middle East, wherein we are building inroads. That's a tough and saturated market. So Middle East is a saturated market and as a relatively new entrant, it is not an easy one to crack for us. Despite regional disruption to shipping this year, our demand held firm, and our e -commerce business took the number 1 category position. We are approaching the market across multiple price points to build inroads, and we are encouraged by the progress so far. Rest of the world, wherein we are strengthening our share, though it's a small market in terms of the basmati consumption, but we are enjoying leadership position in most of the countries, and we are further solidifying our position with the continuous brand investments and the distribution expansion. The other segment that we are into, which is organic, the FY26 brought cost pressure as we changed the business model from wholesale to the CPG, and we expanded our European capacity. We still see organic as one of our most exciting long-term bets with white space in

the Americas and in European organic ingredients, which will help us to balance growth and margins in the medium term. India is a proven growth engine still in its early innings as there is a huge potential lies in front of us. The U.S. is genuinely category leader working through near -term tariff headwinds. Europe and the U.K. are in the investment phase with strong long-term potential. And the Middle East is a tough market wherein we are building inroads. Organic is a long - term bet where we have reset course and all the geographies and business segments are moving forward with full rigor. Now I hand over to our CFO, Mr. Sachin Gupta, for the detailed financial update. Sachin, over to you, please.

Thank you, Monika. Good evening, everyone, and thank you for joining us today. LT Foods delivered another strong quarter, ref lecting the resilience of our business model and the strength of our brands and the effectiveness of our long-term growth strategy. During Q1FY27, the consolidated revenue on a year -on-year basis grew by 26%. On a normalized basis, it grew by 19%, and the revenue stood at INR3,161 crores, driven by strong demand across our key geographies and sustained momentum in our branded portfolio. The gross profit during this quarter increased by 19% to INR1,029 crores. The EBITDA grew by 20% to INR363 crores. Profit after tax stood at INR183 crores, registering a growth of 9%. EPS likewise stood at INR5.3 per share, a growth of 9%. Profitability remained healthy. However, the EBITDA margins moderated from 11% to 11.5% as compared to 12.1% primarily due to ongoing restructuring within the organic foods segment. Now coming to quarter-on-quarter basis, the revenue grew by 8%. The gross profit margin grew by 13%. EBITDA grew by 21% and the profit after tax on a quarter -on-quarter basis grew by 35%. Turning to the segmen t performance. Our core basmati and specialty rice business continued to perform exceptionally well, delivering revenue growth of 34% year - on-year basis to INR2,845 crores. Importantly, the volume grew by 11%, demonstrating the sustained consumer preference for our flagship brand across market. Despite the geopolitical uncertainties and trade disruption, this segment EBITDA margin stood at stable 13%, highlighting the strength of our business model and operational execution. In India, the revenue grew by 23% on a year-on-year basis. supported by continued marketing share gain and deeper household penetration. Our market share reached to 23.1%, while our household penetration increased to 64.4 lakh households, reinforcing the growing strength of our Daawat franchise.

We also continue to maintain leadership position across e -commerce, quick commerce platform, which remains strong drivers of our premiumization and consumer acquisition. International business also continued its growth momentum and contributed 71% of our consolidated revenue, with North America maintaining the leadership position with 49% growth. Normalized growth during this quarter was 27%. Middle East and the rest of the world grew by 44%. Our brand continues to strengthen in these markets a cross all geographies. In Organic Food and Ingredient business witnessed a temporary decline in the revenue due to remodelling of the organic business. The revenue stood at INR254 crores with EBITDA margin at 4%. However, the underlying demand fundamentals remains healthy, and we are expecting gradual normalization over the coming quarters as the business mix improves. We continue to believe strongly in the long-term opportunities within the global organic food market. The ready-to-heat and ready-to-cook portfolio delivered revenue growth of 13% on a year - on-year basis with 42% growth coming in the Biryani kits. This portfolio continues to represent an important strategic growth avenue for the company. Our RTH facil ity in the U.S. is expected to become operational in this quarter. With it, it will accelerate the growth in this segment in the upcoming quarters. From the balance sheet perspective, we remain focused on disciplined capital allocation and efficient working capital management. We delivered meaningful improvement across key operating metrics during the quarter.  On a year-on-year basis, inventory days reduced from 221 days to 187 days.  Receivable days improved from 30 days to 26 days.  Overall working capital reduced from 195 days to 170 days. These improvements reflect our continued efforts towards enhancing efficiency across the value chain. Our return on capital employed remains robust at 21.1%, demonstrating our ability to generate healthy returns while continuing to invest behind the future growth opportunities. While net debt-to-EBITDA improved during the quarter to 0.48x, our net debt to equity also remained comfortable at 0.15x, providing ad equate flexibility to support future expansion initiatives. To summarize, our Q1FY27 revenue has been a strong start to the year with record revenue of INR3,161 crores, EBITDA at INR363 crores, PAT at INR183 crores and an EPS of INR5.3 per share.

Importantly, these results are in line with our annual estimates, and we are on track for the full year across all financial parameters. With this, I now request the operator to open the floor for questions-and-answers.

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.

Congratulations on a good set of numbers. I wanted to understand how much is the planned capex for the Australia facility?

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.

Right. Okay. And sir, second ques tion 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?

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.

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.

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

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?

Avnish, fortunately, majority of the basmati grown area have an alternative irrigation, which

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 b y 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 h ave been able to pass on to the consumer and quite confident that we will be.

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?

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.

Two quick follow -up, and I'll end there. One is in terms of organic, are you charging a premium versus organic Indi a 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 shar e 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.

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

can see in our growth rate as well that our first quarter growth has been good. the first question on organi c, yes, we are charging a premium in the space of basmati and Sona Masoori to all the players that are available in the market.

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

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?

So Saurabh, I may not have the exact figure on the water leve l. 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 district s, we have issue. But majority district s 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.

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

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.

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?

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.

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, forQ 4 FY27 or first Q1 FY28. So what is your read on that?

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.

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.

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?

No, we have reset our reduction has been reduced. So that has been -- the prices has been reset.

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

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

The next question is from the line of Pooja Sanghvi from InCred Asset Management. It's a follow-up question.

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?

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

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.

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

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?

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.

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

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.

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.

So you mean to about Middle East?

Yes, Middle East, particularly is the Saudi market.

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 eit her 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.

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 o r 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.

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.

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?

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.

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

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 a bsolute numbers, it has been increased from INR419 crores to INR486 crores. Could you please provide the breakup of this?

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

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.

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?

The sales are r ecorded 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.

Okay. And another last one is on the supplier financing side.

In the last quarter, the Golden Star was not consolidated. In this quarter, it is consolidated. So that is the normalization.

Not the discounting.

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?

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.

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

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?

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

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?

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.

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

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 t he 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.

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

Yes, yes. So 2 are our main markets. One is Europe, which is the biggest and followed by America.

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

Same 10%.

So that appeal where our tariff was reduced from more than 300% to 75%. So right now, we are not paying 75% on organic.

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.

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

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 o verall, can you bridge that gap in terms of like, what is driven by higher realisation? Can you give some color?

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.

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

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 n ow 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. H as that changed? Or is it the same thing, same dynamic going on in the U.S.?

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 a lso increased 20 lakh households in the last year.

Nan, does that answer your question?

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?

Has anything changed there? If you can just help us.

No. The category is growing in USA. So there is no impact of th e 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.

Okay. So no change there?

No.

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

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?

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.

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 RT H in the U.S. that has somewhat affect what that has done, but we are on track.

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

No, in terms of growth or in margin?

In terms of both growth and margin.

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.

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

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.

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?

We have achieved a revenue growth of 13%. Can we achieve 20%-25% growth?

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.

The next question is from the line of Saurabh Beria from Sameeksha Capital. It is a follow- up question.

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.

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.

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.

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.

Perfect. Secondly, on the Jasmine rice versus basmati. So at what rate both are going in the North America segment? What is the ir industry size? And on the pricing front, I believe Jasmine price is higher than the n ormal basmati rice. So are we possessing a higher margin on that part? Or what is the scenario? Any comment on this?

So Saurabh, 2 are different. So Jasmine is 3x bigger than the basmati rice market. And there

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.

Just a foll ow-up on this. So can you provide a growth rate for basmati and Jasmine separately?

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.

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

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 cap ital 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.

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

Yes. .

That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you.

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.

On behalf of Motilal Oswal, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.