Baba Ramdev's Patanjali Earns Profit Of Rs 88 Crore, Down By 64% As High Input Cost Dents Margins

Baba Ramdev's Patanjali Foods earned a standalone net profit of Rs 87.8 crore in the quarter ending June 30, 2023 period, declining by 63.6% from a profit of Rs 241.25 crore in Q1 of the previous fiscal. The profitability took a hit due to lower other income, and high costs that impacted its margins. However, revenue from operations jumped 7.71% to Rs 7,767.10 crore in Q1FY24, as against Rs 7,210.96 crore in the same quarter a year ago. Patanjali shares ended at Rs 1293.40 apiece, down by 2.32% on BSE.

In the March quarter, Patanjali's revenue and PAT stood at Rs 262.33 crore and Rs 7,872.92 crore respectively.

During the June 2023 quarter, Patanjali said, it demonstrated a strong performance in Food & FMCG segment as revenue increased to Rs 1,952.46 Cr from INR 531.30 Cr in Q1FY23 by registering an impressive growth of 267.49%. The overall revenue surges (total Income) to Rs 7,767.10 Cr in Q1FY24 as compared to Rs 7,210.97 Cr in Q1FY23, sustaining its growth momentum.

It added, " Subdued market conditions in the edible oil sector due to continuous falling prices, the company continues to maintain its market share, although the edible oil revenue shows decline on YoY basis."

However, volume increased by 1.4 lacs mt registering a growth of 35.80% year-on-year, though, revenue declined to Rs 5,890.73 crore in Q1FY24 from Rs 6,763.01 crore in Q1FY23 in absolute terms.

Further, EBITDA came in at Rs 211.99 crore with an EBITDA margin of 2.71% in the quarter. Patanjali said, "The drag in EBITDA margins is due to a decline in Oil prices on account of macro challenges, as well as increasing input costs affected aggressively to maintain margins in a healthy range."

The company's exports turnover stood at Rs 162.45 crore to 25 countries with a growth of 127.85% YoY.

Branded sales of Foods & FMCG segment and Edible Oils stood at Rs 5,527.78 crore (70.78% of revenues from operations) during Q1FY24.

In the case of edible oils, the segment posted sales of Rs 5890.73 Cr contributing 74.94% of revenue from operations of the company vis-à-vis 77.18% contribution in the last quarter. Patanjali said, "Despite Edible Oil revenue degrowth, the Sales volume increased by 1.4 lacs mt registering a growth of 35.80% year-on-year."

According to Sanjeev Asthana, CEO, of Patanjali Foods Limited, in recent market developments, we have been responding to moderating commodity inflation by implementing [price cuts]. With the monsoon onset, the demand from rural India is seeing green shoots.

He added, "Our Food & FMCG segment is performing in line with our targets. We have been growing at a healthy rate and our new product launches will boost our growth further. We see Food & FMCG segment to be a major contributor to our revenue as well as margins."

Asthana also said, "Our vision is to be the fastest growing player in the market and gain a formidable position amongst top three FMCG players in the country within the next five years with a turnover of Rs 45,000-50,000 crore."

Moreover, Patanjali also highlighted that it continues to reward its stakeholders by announcing a dividend of Rs 6/- per share (on face value of Rs. 2/- per share) for FY 2023. This dividend of 300% is considered to be the highest amongst its peers.