Patanjali Foods - Well Positioned For Accelerated Growth, Value Creation: HDFC Securities Initiates Coverage

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HDFC Securities Retail Research

In less than three years since the Patanjali Group acquired Ruchi Soya Industries Ltd. under insolvency process, it has led an encouraging turnaround. Besides, it has put in place structural drivers for future growth. In June 2022, the name of the company has been changed from Ruchi Soya Industries to Patanjali Foods Ltd.

Diversifying from edible oil business and expanding its presence into fast moving consumer goods, the company acquired biscuits, cookies and rusk business in May, 2021 and breakfast cereals and noodles business in June, 2021 from Patanjali Ayurveda Ltd. It also launched nutraceutical products in June, 2021.

Further, in Q1 FY23, the company has also acquired food business from Patanjali Ayurved that has over 500 stock keeping units across eight product categories including ghee, honey, spices, juices and atta.

We expect this move to reposition Patanjali Foods from a largely commodity-based company to a leading fmcg and fast moving healthcare goods company in India, well poised to leverage the enormous opportunity for high-quality branded food products.

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