Patanjali Foods Ltd. witnessed a sequential decrease in its revenue from edible oil sales as domestic prices softened, according to Chief Executive Officer Sanjeev Asthana. This was in line with a decline in global prices.
Due to a significant portion of edible oil being imported by India, alterations in global prices have some influence on domestic prices, according to Asthana. Consequently, Patanjali Foods experienced a decline in revenue during the July-September quarter, despite a marginal increase in sales volume.
He mentioned that palm oil futures on the Bursa Malaysia Derivatives Exchange dropped by 4.64% in the second quarter.
During the quarter ending in September, Patanjali Foods’ revenue from edible oil decreased to INR 5,421.5 crore, down from INR 5,890.73 crore in the preceding quarter.
The CEO mentioned that concerning the prices of edible oils, the worst has passed, and there is a likelihood of an increase in the next two quarters due to international factors.
Regarding transferring the price increase to consumers, he stated, “Usually, if there is a partial uptick, it can be passed on to consumers… It’s on a real-time basis.”
Growth in the quarter was propelled by new introductions in the food and fast-moving consumer goods sector, according to Asthana. He mentioned that there is a likelihood of ongoing new launches in this segment.
The revenue in the segment for Patanjali Foods increased to INR 2,487.6 crore, constituting 31.8% of its total revenue.
The FMCG company aims to achieve and sustain an Ebitda margin ranging from 16-18% in the food and fast-moving consumer goods segment and 2-4% in the edible oil segment, as stated by Asthana.
During Q2, the company expanded its palm oil plantation to cover 4,500 hectares across India, bringing the total plantation area to 68,498 hectares. Asthana noted that the effects of the palm oil plantation would become apparent in four to five years.