The company’s issue represents a regulatory risk specific to a small part of the organic segment but does not threaten core business or overall profitability. Management’s confidence and active legal engagement indicate proactive risk management.

“We are taking all necessary recourse available to us under US law and we are very positive of the positive outcome... We don't foresee any material financial impact on the cash flow or future earnings of the businesses.”

“The financial impact, if we have to come out of the business, is low. And it is limited to about INR4 crores to INR5 crores.”

“We have engaged top U.S. legal counsels who are confident that a Department of Commerce interpretation can be effectively challenged.”

— Ashwani Kumar Arora, MD & CEO

CVD: Countervailing Duty

“We have two facilities for processing soya meal, one in India and one in Uganda. It depends from where we are competitive... CVD is not applicable on the Uganda facility; it is only from exports from India.”

— Ashwani Kumar Arora, MD & CEO

Understanding that this is an industry-wide regulatory challenge but LT Foods’ specific 340% duty is a temporary punitive measure clarifies the company’s risk profile. It underscores that the company is navigating a common industry trade friction rather than an idiosyncratic failure or irregularity.

“Countervailing duty is imposed on the industry as such... They give every company a countervailing duty based on if they are getting any subsidies or not... In our case, they could not review the information, and that is why they have given an adverse facts available of 340%. After the review, they will come up with an appropriate duty.”

— Ashwani Kumar Arora, MD & CEO

The company acknowledges a market slowdown due to Iran but views it as routine. Given LT Foods’ strong brand and favorable competitive positioning, they don’t expect any margin impact.

“No, we don't see any margin reduction. This is a regular thing. Because of Iran, you know, the market is a little depressed. But being a very strong brand and what we see the competitive landscape; we are hopeful that that will not impact any margin of LT Foods.”

— Ashwani Kumar Arora, MD & CEO

The management suggests that the reported other income figure in FY 2025 has a non-recurring component, which will disappear post-consolidation, with GOLDEN STAR resulting in a temporary boost to reported earnings.

“So, actually, that is another income(inventory management fees) that we charge to one of our associate companies in the US. So, that is the Golden Star. So, once it gets consolidated -- this year it will be getting consolidated and there will be line by line consolidation. So, this other income, there will be no other income this year and it will be getting in the normal course of the business. So, this is the income which we charge, the company charges from the associate company. That is shown in the other income.”

— Ashwani Kumar Arora, MD & CEO