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Informist, Friday, Oct. 31, 2025

 

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--Pricing pressure likely to persist going ahead
--Edible oil, FMCG to account for 50:50 of revenue in 4 yrs
--Edible oil business saw negative growth YoY, up 5% QoQ
--See 2-4% growth in edible oil sales, 8-10% in FMCG segment
--85% of our overall portfolio now in 5% GST bracket

 

By Sunil Raghu and Afra Abubacker

 

MUMBAI/NEW DELHI - Patanjali Foods Ltd. sees pricing pressure on its business persisting because of tightening global vegetable oil supplies and other geopolitical factors, the company told analysts on a post-earnings conference call Friday.

 

"On the domestic front, unseasonal rains have impacted crops and prices thereof," the management said. The company saw its edible oils business post negative growth on year in the September quarter, though sales grew 5% on quarter. However, the management expects a rise of 300–400 basis points in volumes and revenue in the coming months, following the announcement of the goods and services tax rate cuts by the government, effective Sept. 22. The management said that while edible oils were already taxed at 5%, about 55% of its fast-moving consumer goods portfolio has also now shifted to the 5% bracket, bringing roughly 85% of its overall product portfolio in the 5% slab.

 

For the September quarter, Patanjali Foods reported a robust 67% on-year increase in net profit to INR 5.17 billion, up nearly threefold from the previous quarter, boosted by an income tax refund of INR 1.41 billion. Revenue from operations rose nearly 21% on year and nearly 12% sequentially to INR 97.99 billion, driven by its newly classified FMCG segment, which contributed over 29% to the company's top line. The company's earnings before interest, tax, depreciation, and amortisation stood at INR 6.03 billion, up more than 22% on year, with an EBITDA margin of 6.13%.

 

Talking of segmental revenue, the management of Patanjali Foods said the edible oils business currently accounts for nearly two-thirds of its total revenue and the FMCG segment, including foods, contributes the remaining one-third. The management said this would be rebalanced going ahead. "...this is a stated intent that within four years we will be 50-50," the management told analysts.

 

For Jul–Sept, the company's edible oils business generated INR 69.71 billion in revenue. For Apr–Sept, the revenue from this segment stood at INR 136.53 billion. Patanjali Foods expects its edible oils business to grow 2-4%, foods segment to grow 8–10%, and the home and personal care segment around 15%.

 

The management said that currently around 60% of its profit and EBITDA come from the FMCG segment and the rest from the vegetable oils segment. "So the idea is that at 50-50 revenue, nearly 75% profit will come from FMCG, which is a lot more predictable," it said. Friday, shares of Patanjali Foods closed 1.2% lower at INR 602.40 on the National Stock Exchange.  End

 

Edited by Subhojit Sarkar

 

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