Patanjali’s Profit Flat In FY22, Yet To Regain Pre-GST Level
Baba Ramdev-backed Patanjali's net profit flat at Rs 740 crore in FY22.
Patanjali Ayurved Ltd.’s profit was flat and margin narrowed in the fiscal ended March 2022, weighed down by weak consumer demand and soaring inflation.
The Haridwar-based company reported a consolidated net profit of Rs 740.4 crore in FY22 compared with Rs 745 crore in FY21, its filing with the exchanges showed.
The Baba Ramdev-backed company has yet to recover from the low-growth cycle it fell into after the goods and services tax rollout in 2017. The ongoing geopolitical tension, demand-supply mismatch and the resultant high inflation aggravated the woes for the maker of the Dant Kanti toothpaste.
Patanjali’s profit, according to data compiled by BQ Prime, is still below the Rs 1,190 crore it reported five years ago. Its top line, however, remained higher than the pre-pandemic levels.
Patanjali’s FY22 Key Highlights (YoY)
Revenue rose 8.7% to Rs 10,664.5 crore.
Operating profit fell 9.2% to Rs 944.5 crore.
Margin narrowed to 8.85% versus 10.6% due to higher expenses.
During the year, the company’s total expenses rose 10% to Rs 10,137.8 crore.
Patanjali, like other fast-moving consumer goods peers, saw its margin contract on account of exceptional price instability in most of the raw materials, coupled with high packaging and transportation costs.
The margin of India’s largest consumer goods maker, Hindustan Unilever Ltd., contracted to 24.8% in FY22 from 25% in FY21. Dabur India Ltd.’s margin fell to 20.7% from 20.9% in FY21, while ITC Ltd.’s narrowed to 33.6% from 35.7%.
“The operating environment remained challenging with unprecedented inflation across key raw material prices, fuel and transportation costs, along with subdued consumer sentiments,” Ram Bharat, director at Patanjali Ayurved, had told BQ Prime earlier.
Sales of ayurvedic products such as chyawanprash and juices, which picked up during the Covid-19 pandemic, also slowed, impacted by a slack in discretionary spends, he had said.
Last month, Patanjali sold its food business to group firm Ruchi Soya Ltd. for Rs 690 crore to focus on non-food, traditional medicine, and wellness business. Ruchi Soya has also been renamed Patanjali Foods Ltd.
In FY22, the food business of Patanjali grew 28% year-on-year at Rs 4,174 crore. It’s also growing 2-2.5 times of the industry growth of 11%, said Ruchi Soya Chief Executive Officer Sanjeev Asthana. “We expect the combined food business to grow 20-25% in FY23 with revenue touching Rs 6,800-7,000 crore.”