LT Foods share price hits 52-week high, soars 123% from its 52-week low; what should investors do?
LT Foods shares hit a 52-week high after rising nearly 7 per cent. The stock has been climbing since June on a monthly scale and gained 123 per cent since its 52-week low. Geojit upgraded the stock to a buy with a target of ₹378.
LT Foods share price: Witnessing strong gains for the second consecutive session, LT Foods shares jumped nearly 7 per cent to hit their fresh 52-week high in intraday trade on BSE on Friday, August 16. LT Foods share price opened at ₹313.40 against its previous close of ₹313.10 and jumped 5.7 per cent to its 52-week high level of ₹331.
LT Foods share price has been on a roll since last year. The stock hit its 52-week low of ₹148.70 on September 12, 2023. It has gained almost 123 per cent to reach its fresh 52-week high level. On a monthly scale, the stock has been in the green since June this year, rising 25 per cent in June, 14 per cent in July and 12 per cent in August so far.
For the June quarter of FY25 (Q1FY25), the consumer specialty company reported a 16.45 per cent year-on-year increase in revenue and an 11.45 per cent year-on-year rise in profit. The company's operating income rose by 11.69 per cent year-on-year.
Geojit says buy it
Some brokerage firms upgraded the stock with an upward revision in target price after its Q1 show.
Brokerage firm Geojit Financial Services upgraded the stock to a buy with a revised target price of ₹378 from ₹230 earlier, highlighting the company's solid performance and recent expansion and regional diversification initiatives.
Geojit underscored that LT Foods has a presence in more than 80 countries and has significant regional exposure in the US, Europe, Middle East, etc.
"As part of a regional diversification strategy, LT Foods has set up a new manufacturing facility in the UK ($1 billion market) and has appointed a distributor for the Saudi Arabia market (largest basmati rice market in the world), which is a long-term positive for the company," said Geojit.
The brokerage firm expects LT Foods's earnings to grow at a 13 per cent CAGR over FY24E-26E. On the valuation front, Geojit said the stock currently trades at a one-year forward P/E of 17 times. Geojit values the stock at 16 times Sept 2026 EPS to arrive at a target price of ₹378.
Technical experts point out the key resistance levels
While the stock may yield a decent return in the long term, some technical experts point out that it appears overbought.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that the stock is trading significantly above its major key exponential moving averages (DEMA) for the 21-day, 50-day,100-day and 200-day periods at the current juncture.
"At this juncture, the stock's performance indicates that it has recently experienced a solid upward momentum. However, trading far above these critical averages can often make the stock vulnerable to a pullback, as it suggests that the price might be overextended or overbought in the short term," said Patel.
"While LT Foods may continue to rise and potentially reach the ₹333-336 range in the coming sessions, this level is a strong resistance zone. Therefore, investors should consider booking profits if the stock enters this price range rather than taking aggressive long positions," said Patel.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
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