Patanjali Foods saw a significant decline in its net profit for the first quarter of 2023. The company’s financial results revealed a nearly 64 per cent year-on-year (YoY) plunge in net profit, settling at Rs 878 crore.
But despite this setback, the company experienced a growth of almost 8 percent in revenue from operations, reaching Rs 7,767 crore.
The sharp decline in net profit was attributed to muted sales growth and a sharp deterioration in operational performance. The company’s operating profit, calculated as earnings before interest, taxes, depreciation, and amortization (EBITDA), saw a substantial 57 per cent decrease compared to the same period last year, amounting to Rs 169 crore. The operating margin also shrank by 326 basis points, resting at 2.17 per cent.
The edible oils business, which serves as Patanjali Foods’ mainstay, reported a worrisome 13 per cent drop in revenue for the quarter, with earnings reaching Rs 5,891 crore. Notably, this segment also incurred an operating loss of Rs 147 crore during the quarter, further contributing to the decline in overall profitability.
In contrast, the food and FMCG (Fast-Moving Consumer Goods) business displayed resilience, reporting an 8.2 per cent growth in revenue, totaling Rs 1,952 crore. Despite facing challenges like rising inflation and macroeconomic headwinds, this segment managed to achieve an EBITDA of Rs 360.80 crore, sporting a commendable EBITDA margin of 18.48 per cent. The company attributed this achievement to strategic cost-efficiency measures.
Patanjali Foods held its ground in market share within the edible oil sector, despite subdued market conditions caused by continuous falling prices. The company’s volumes also exhibited promising growth, with a notable 36 per cent increase year-on-year. In a surprising turn, exports turnover surged by an impressive 128 per cent compared to the same period last year, reaching Rs 162.45 crore. Branded sales, encompassing both the food and FMCG segment and edible oils, contributed significantly to the company’s revenue, amounting to Rs 5,527.78 crore and constituting around 71 per cent of the total revenue.
Patanjali Foods’ shares encountered a 2.2 per cent decline, closing at Rs 1,293.90 on the National Stock Exchange on Friday.
