Valuation Metrics and Recent Changes
As of 2 January 2026, L T Foods Ltd is trading at ₹384.80, down 1.24% from the previous close of ₹389.65. The stock’s 52-week range spans from ₹290.05 to ₹518.35, indicating significant volatility over the past year. Despite the recent dip, the company’s valuation grade has improved markedly, with the price-to-earnings (P/E) ratio standing at 21.01 and the price-to-book value (P/BV) at 3.19. These metrics have contributed to the upgrade from an attractive to a very attractive valuation grade, reflecting a more compelling entry point for investors.
The enterprise value to EBITDA (EV/EBITDA) ratio is 13.44, which is relatively moderate within the sector, suggesting that the company is not overvalued on an operational earnings basis. The EV to EBIT ratio is 16.69, while the EV to capital employed and EV to sales ratios are 2.71 and 1.50 respectively, underscoring efficient capital utilisation and reasonable sales valuation.
The PEG ratio, which adjusts the P/E ratio for earnings growth, is at 3.65. While this is on the higher side, it is important to consider the company’s return on capital employed (ROCE) of 16.21% and return on equity (ROE) of 15.19%, both of which indicate solid profitability and effective capital management.
Comparative Analysis with Peers
When compared with peers in the Other Agricultural Products and related sectors, L T Foods Ltd’s valuation stands out favourably. For instance, Kajaria Ceramics, rated as attractive, trades at a P/E of 39.37 and an EV/EBITDA of 21.79, significantly higher than L T Foods. Similarly, Cera Sanitaryware, with a very attractive rating, has a P/E of 27.28 and EV/EBITDA of 20.57, still above L T Foods’ multiples.
Other peers such as Pokarna and Carysil are rated expensive and fair respectively, with P/E ratios of 18.08 and 32.07, and EV/EBITDA multiples of 10.60 and 18.18. Notably, Nitco is classified as risky due to loss-making status, with an EV/EBITDA of 104.08, highlighting the relative stability of L T Foods in comparison.
This peer comparison underscores L T Foods’ improved valuation standing, especially given its robust profitability metrics and moderate leverage. The company’s current valuation multiples suggest it is trading at a discount relative to several sector counterparts, enhancing its appeal for value-conscious investors.
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Stock Performance Relative to Sensex
Over various time horizons, L T Foods Ltd has delivered mixed returns compared to the benchmark Sensex. In the short term, the stock has underperformed, with a 1-week return of -4.75% versus Sensex’s -0.26%, and a 1-month return of -7.36% compared to -0.53% for the index. Year-to-date, the stock is down 1.24%, slightly lagging the Sensex’s marginal decline of 0.04%.
However, the longer-term performance paints a more favourable picture. Over one year, L T Foods has declined by 10.93%, while the Sensex gained 8.51%. Yet, over three, five, and ten-year periods, the stock has significantly outperformed the benchmark, delivering returns of 232.87%, 569.22%, and an impressive 1340.12% respectively, compared to Sensex returns of 40.02%, 77.96%, and 225.63% over the same durations.
This long-term outperformance highlights the company’s growth trajectory and resilience, despite recent short-term volatility and valuation adjustments.
Mojo Score and Rating Update
L T Foods currently holds a Mojo Score of 53.0, reflecting a Hold rating, downgraded from a Buy on 6 November 2025. The Market Cap Grade is 3, indicating a mid-sized market capitalisation within its sector. This rating adjustment aligns with the recent price correction and valuation shifts, signalling a more cautious stance from analysts while recognising the stock’s underlying fundamentals.
Investors should note that the valuation upgrade to very attractive is a positive signal, but the Hold rating suggests monitoring for further confirmation of sustained momentum before committing additional capital.
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Investment Outlook and Considerations
Given the current valuation parameters, L T Foods Ltd presents a compelling case for investors seeking exposure to the Other Agricultural Products sector at a relatively attractive price point. The P/E ratio of 21.01 is below many peers, while the P/BV of 3.19 remains reasonable considering the company’s strong ROCE and ROE metrics.
However, the elevated PEG ratio of 3.65 suggests that earnings growth expectations are already factored into the price to some extent, warranting a cautious approach. Dividend yield remains modest at 0.65%, indicating limited income generation but potential for capital appreciation.
Investors should also weigh the recent price decline and short-term underperformance against the company’s robust long-term track record and improving valuation grade. The downgrade from Buy to Hold reflects this nuanced outlook, balancing opportunity with risk.
Overall, L T Foods Ltd’s shift to a very attractive valuation grade signals a favourable entry point, especially for those with a medium to long-term investment horizon. Monitoring sector trends, earnings updates, and broader market conditions will be crucial to capitalising on this opportunity.
Conclusion
L T Foods Ltd’s recent valuation upgrade to very attractive, supported by a P/E of 21.01 and a P/BV of 3.19, marks a significant development for investors analysing price attractiveness in the Other Agricultural Products sector. While short-term price movements have been negative, the company’s strong fundamentals, peer-relative valuation, and impressive long-term returns provide a solid foundation for potential gains.
With a Hold rating and a Mojo Score of 53.0, the stock warrants close observation as it navigates market volatility. Investors seeking value within the sector should consider L T Foods as a candidate for portfolio inclusion, balancing its attractive valuation against growth prospects and sector dynamics.
As always, a diversified approach and ongoing analysis remain key to optimising investment outcomes in this evolving market environment.
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