Patanjali Foods on Friday experienced a nearly 64% year-on-year (YoY) dip in net profit for the quarter ending in June 2023, totaling INR 878 crore. Despite this, there was a positive trajectory in revenue from operations, which surged by almost 8% compared to the previous year, reaching INR 7,767 crore.
Expenses for the quarter climbed to INR 7,691 crore from the INR 7,038 crore recorded a year earlier.
The significant decline in net profit can be attributed to sluggish sales growth and a pronounced deterioration in operational performance.
The operating profit, computed as EBITDA (earnings before interest, taxes, depreciation, and amortization), witnessed a 57% year-on-year drop, amounting to INR 169 crore. Furthermore, the operating margin contracted by 326 basis points, settling at 2.17%.
The core edible oils segment registered a 13% decline in quarterly revenue, reaching INR 5,891 crore. Meanwhile, the food and FMCG division saw a growth of 8.2% in revenue, totaling INR 1,952 crore.
The significant decrease in EBITDA was primarily driven by an operating loss incurred in the edible oils segment. This division recorded an operating loss amounting to INR 147 crore in the quarter.
The Food & FMCG category expanded both in terms of value and volume, contributing approximately a quarter (25%) to the overall sales. Branded sales during the quarter constituted a substantial portion, accounting for around 71% of the company’s total revenue.
The company attributed the subdued conditions in the edible oil sector to a persistent decline in prices. Despite experiencing a reduction in revenue, the company managed to uphold its market share. Remarkably, there was a notable 36% year-on-year increase in volumes.
Exports turnover experienced a remarkable 128% year-on-year surge, reaching INR 162.45 crore. Branded sales, which encompass both the foods and FMCG segment as well as edible oils, totaled INR 5,527.78 crore.
Despite grappling with escalating inflation and broader macro challenges, the Foods and FMCG segment achieved an EBITDA of INR 360.80 crore, accompanied by an EBITDA margin of 18.48%. The company attributed this accomplishment to effective cost efficiency measures.
On Friday, shares of the company ended 2.2% down at INR 1,293.90 on the National Stock Exchange.