So when the Food Safety and Standards Authority of India (FSSAI) banned Maggi in June 2015 for allegedly containing lead beyond permissible limits, it didn’t just shake public faith in instant food, it also rattled investor confidence in multinational food giants like Nestle. The company had to pull the product from shelves, and its stock price tumbled over 10% within days.
Nestle India responded with a carefully phased relaunch, stricter food safety standards, and a flurry of new products. The comeback worked: Maggi regained more than half its lost market share, and Nestle’s stock went on to command a valuation premium unmatched in the Indian food sector.
Nearly a decade later, another food story is unfolding—this time around health, safety, and organic eating. And one Indian company, LT Foods, wants to capture that same kind of premium.
Since the pandemic, awareness around food safety, chemical residues, and nutrition has deepened. For India’s expanding middle class, organic and “clean label” foods have come to represent health, safety, and a higher quality of life. Buying organic is now seen less as indulgence and more as investment in well-being.
This marks an inflection point for India’s organic food companies. With organic products typically priced 30-100% higher than conventional alternatives, the category offers both pricing power and value accretion. Urban consumers, nudged by global food trends, social media, and the easy availability of organic products online and in modern retail, are fuelling steady demand. And the growing distrust of pesticide-heavy farming has only reinforced the shift.
LT Foods: From basmati giant to organic pioneer
The megatrend is clear: organic food is here to stay. And few companies capture this transformation better than LT Foods, which is steadily reshaping itself from a basmati rice exporter into an organic food powerhouse.
In India alone, it now works with over 60,000 organic farmers across 94,000 hectares of farmland, spanning the Himalayan foothills through central and southern states. Its African network adds another 14,700 organic farming families over 10,000 acres of certified cultivation.
The company is also expanding its international footprint. A new facility in Rotterdam, Netherlands, will serve as a European processing and export hub, supplying mainstream supermarkets and health stores through low-carbon supply chains. It has also set up a UK manufacturing facility, appointed a distributor in Saudi Arabia, the world’s largest basmati market, and aims to generate ₹10 billion in revenue each from these two regions over the next five years.
LT Foods’ next growth phase centres on diversification, beyond rice and into high-margin organic foods, ingredients, and ready-to-cook meals that cater to evolving preferences for health, convenience, and sustainability. Through its ‘Daawat Ecolife’ range, the company is transitioning from a B2B exporter to a B2C brand, capturing margins that previously went to intermediaries.
Supported by a network of 1,800 distributors and 150,000 retail outlets in over 80 countries, and with planned capex of ₹1.5–2 billion in FY26 for expansion in the US, UK, and Saudi Arabia, LT Foods is positioning itself as a credible global player in branded organic food.
Should organic food stocks be on your watchlist?
Compared to its basmati peer KRBL, LT Foods has already enjoyed premium valuations thanks to its diversified growth strategy and cleaner governance record. Whether that premium endures will depend on its ability to execute growth and margin expansion over the next four years, without straining its balance sheet.
For investors, the call is clear: organic food may be India’s next big consumption story, but picking the right stock will still come down to fundamentals, governance, and valuation discipline.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
