On Wednesday, Patanjali Foods announced a profit for the second quarter that more than doubled. This surge was driven by a decline in expenses, which outpaced the decrease in revenue caused by lower edible oil prices.
In the quarter ending on September 30, the profit of Ruchi Gold, the oil maker, increased to 2.55 billion Indian rupees ($30.63 million), up from 1.12 billion rupees the previous year.
Patanjali experienced a reduction of over 23% in raw material costs, contributing to a decline of over 10% in total expenses, which amounted to 75.11 billion rupees.
While the decrease in expenditures played a role, it managed to counterbalance an 8% decline in Patanjali’s revenue from operations, which amounted to 78.22 billion rupees. The revenue from edible oils, constituting 69% of its total revenue in the quarter, saw a drop of over 13%.
The surge in India’s edible oil imports and the impact of lower global oil prices have placed a burden on edible oil companies. Just last week, Adani Wilmar, a major player in the industry, reported a loss for the quarter.
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The company’s food business, responsible for producing Patanjali-branded biscuits and the “Nutrela” range of products spanning from wheat flour to honey, witnessed a growth of approximately 5.5% in revenue.
In a statement, CEO Sanjeev Asthana of Patanjali Foods expressed optimism, anticipating that the festival season and a rise in consumer spending will propel growth in the upcoming quarter.
During the initial two months of the July-September quarter, consumer companies struggled with subdued demand in rural areas, attributed to soaring inflation and delayed monsoons.
Nevertheless, a report from NielsenIQ revealed that a rebound occurred as food prices eased, and there was an improvement in rainfall during September.
Patanjali Foods’ shares concluded with a 1.15% increase before the results, contributing to a year-to-date surge of 22%.