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Informist, Monday, Feb. 10, 2025

By Aman Aryan

MUMBAI – Strong growth in revenue, coupled with inventory-related benefits boosted the earnings of Patanjali Foods Ltd. for the December quarter. Although the company registered a near-21% on-year increase in its cost of materials consumed, the 15% growth in revenue offset the impact of increased expenses. 

The food processing company's net profit for the December quarter rose for the third consecutive quarter to INR 3.71 billion, up 71% on year. It posted the strongest growth in its revenue in seven quarters with a 15% on year increase during the December quarter to INR 91.03 billion. Sequentially, the company's net profit grew 20% and its revenue grew 12%.

The fast moving consumer goods company's total expenses rose 13% on year to INR 86.53 billion, mainly driven by a 21% rise in input costs, a 20% rise in purchases of stock-in trade and a 31% increase in other expenses. Patanjali Foods' input cost grew first time on a year-on-year basis in seven quarters. The company's cost of materials consumed, purchase of stock-in-trade, and other expenses for the December quarter were INR 59.82 billion, INR 26.17 billion, and INR 7.57 billion, respectively.

The company spent around 2.5% of its revenue from operations on advertising and sales promotions, the highest since the last 10 quarters, Patanjali Foods said. However, a four-time increase in inventory-related benefits completely nullified the impact of higher expenses. Patanjali Foods' gains related to inventory went up to INR 9.37 billion for the quarter under review compared to INR 2.34 billion a year ago.   

Patanjali Foods' edible oils segment generated revenues of INR 67.17 billion for the December quarter, up from INR 54.83 billion in the year-ago quarter. On the other hand, its revenue from food and other FMCG products for the quarter fell to INR 20.38 billion from INR 24.99 billion a year ago.  

The December quarter experienced lukewarm operating environment due to the subdued demand, the company said in a press release. Apart from this, the input costs for various raw materials such as palm oil and wheat remained elevated. The company's earnings before interest, tax, depreciation, and amortisation for the quarter under review rose 49% on year to INR 5.81 billion and its EBITDA margin expanded by 145 bps on year to 6.39%. Patanjali Foods' export revenues was INR 672.7 million in the December quarter with exports to 29 countries. 

For the nine months ended December, the company reported a 69% on-year rise in its net profit of INR 9.43 billion. Its revenue rose 4% on year to INR 244.30 billion. The company announced its earnings post market hours Monday.

On Monday, shares of the company closed at INR 1,851.55 on the National Stock Exchange, up 0.1%.  End

Edited by Deepshikha Bhardwaj

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