Patanjali Foods Q1 Results: Net Profit Up 3%, Margin Contracts On High Costs
High raw material costs weigh on Patanjali Foods' margin even as it profit rose in the first quarter of 2022-23.
Patanjali Foods Ltd.'s first quarterly profit rose even as margins contracted owing to high raw materials cost.
Standalone net profit of the consumer goods maker increased 3% sequentially to Rs 241.25 crore in the three months ended June, according to its exchange filing.
During the quarter, the Patanjali Group-owned company completed Rs 4,300 crore fund raising via fresh equity to prepay debt. This resulted in increase of public shareholding of the debt-free company to 19.18%, it said.
The food company had changed it name from Ruchi Soya Industries Ltd. with effect from June 24. It had also acquired the food retail business from its parent along with its manufacturing facilities on a slump sale basis for Rs 690 crore in July.
Patanjali Foods Q1 FY23 (Standalone figures, QoQ)
Revenue rose 8% at Rs 7,210.96 crore.
Operating profit dropped 4% to Rs 391.68 crore.
Margins came in at 5.4% as against 6.1% a quarter ago.
Cost of raw materials rose 5.85% to Rs 5,745.41 crore. It was up 34% YoY.
Other income rose to Rs 159.10 crore from Rs 12.7 crore
Sales of Patanjali Foods’ branded business, which includes brands sold under royalty arrangements, stood at Rs 5,016.83 crore during the quarter contributing 70.8% to total sales. Institutional segment, which comprises 5.82% to total sales, recorded sales worth Rs 412.3 crore, the company said. Overall, the branded business registered a growth of 11.97% sequentially.
The other business, which includes food products, grew 16.4% over the previous quarter to Rs 572.4 crore. This segment contributes 11.4% to the branded business of the company, the filing said.
"Robust pan India distribution network and increased presence on emerging digital channels has enabled the company to deliver strong financial performance through wider availability across the retail shelf," it said. It expects the food business with large portfolio of products like cow ghee, chyawanprash, honey, juices such as amla, aloe vera, etc. to grow at a "higher pace" in the coming quarters when the sale of the acquired food business gets reflected in the books.
"Our focus for the next few quarters is to continue the accelerating growth of the highly profitable food vertical, which shall ensure growth of the Ebitda margin of the company."
Shares of Patanjali Foods closed 1.76% lower before the results were announced as against a flat Nifty 50.