Shares of Patanjali Foods, an FMCG firm, gained strongly in Monday's trade after falling 24.55% in the last seven trading sessions. The stock began today's trading day lower at ₹868 apiece, down by 4.7% from the previous closing price of ₹911.40, but quickly gained the lost ground and surged 3.68% to hit an intra-day high of ₹945 before finishing the day higher at ₹938.20, up by 2.94%.
On January 25, the stock fell 3.80% after the company's December quarter earnings fell short of analyst estimates, and it maintained the same momentum in the following six trading sessions, losing over 20 percent of its value in the seven sessions collectively.
For the December quarter, the company reported a 15% increase in the net profit to ₹269.18 crore, compared to a net profit of ₹234 crore in the corresponding quarter of last year. The company had recorded a net profit of ₹112 crore in the preceding quarter.
The revenue from operations during the quarter came in at ₹7,927 crore, an increase of 26.22% from ₹6,280 crore in Q3FY22. While the operating profit fell by 12.38% YoY to ₹368 crore. On a QoQ basis, it was up by 88%. The EBITDA margin for the December quarter stood at 5%, down by 200 basis points as compared to 7% in Q3 FY22.
Net profit climbed to ₹622.73 crore during the April-December period of this fiscal, from ₹571.87 crore the previous year. Total income rose to ₹23,858 crore in the first nine months of this fiscal year from ₹17,608 crore in the previous year.
In Q3FY23, the food products and others business segment generated sales of Rs. 1,570.08 crore, accounting for 19.81% of the company's revenue. The edible oils segment registered sales of ₹6,066.51 crore, contributing 76.53% of revenue.
Baba Ramdev led Patanjali Ayurveda, an Indian consumer goods company, acquired Ruchi Soya Industries in 2019 and renamed it as Patanjali Foods.
The acquisition was a significant milestone for Patanjali, allowing the firm to expand its footprint in the edible oil segment and improve its position in the Indian consumer goods market.
Between January and July 2020, when the Ruchi Soya shares (now Patanjali Foods) were relisted, they rallied from ₹17.85 apiece to ₹1,519.65, delivering a whopping return of 8,413%.
The rally was possible due to a combination of factors, including the acquisition of the firm by Patanjali Ayurveda and the resolution of the company's debt issues through the IBC process, which helped to stabilize its financials and restore investor confidence in the company.
According to market regulator SEBI, the company has to increase the public shareholding to 10% within 18 months of its relisting and further to a minimum of 25% in three years.
Trendlyne data shows that the promoters owned 80.8% of the stake in the company as of December 2022, while the general shareholders held a 13.4% stake.
Patanjali Foods is one of the largest oil palm plantation companies in India. The company has access to palm plantations across 11 states and has also undertaken to set up oil palm mills in Arunachal Pradesh, according to the company exchange filing.
1 analyst polled by MintGenie has a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.