LT Foods shares dive 10% as US slaps 340% duty on subsidiary's exports

Shares of LT Foods tumbled 10 per cent in Monday's trade to hit a low of Rs 389.25 after the company disclosed that its fellow subsidiary, Ecopure Specialities Ltd, has been hit with a steep countervailing duty (CVD) by the US authorities.

In a regulatory filing, the company said the US Department of Commerce has issued a preliminary notice imposing a 340 per cent CVD on the exports of organic soybean meals by Ecopure for the period between January and December 2023.

The levied duty pertains to sales worth Rs 50 crore, according to the company. The announcement triggered a sharp sell-off in LT Foods' stock, as investors reacted to the potential financial implications of the duty.

Despite the steep penalty, LT Foods stated that it is confident in Ecopure Specialities' legal standing and intends to seek a review of the Administrative Review of CVD. The company also clarified that, based on the information currently available, it does not anticipate any material impact on future earnings or cash flow.

The development marks a significant setback for the group's export operations in the US, a key market, and casts uncertainty over trade relations amid tightening scrutiny of agricultural imports.

Technically, LT Foods' scrip traded lower than the 5-day, 10-, 20-day and 30-day simple moving averages (SMAs) but higher than the 50-day, 100-, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 41.36. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The stock has a price-to-earnings (P/E) ratio of 66.18 against a price-to-book (P/B) value of 8. Earnings per share (EPS) stood at 6.16 with a return on equity (RoE) of 12.09. According to Trendlyne data, LT Foods has a one-year beta of 1.2, indicating high volatility.

As of March 2025, promoters held a 51 per cent stake in the company.