Patanjali Foods Q2 Results: Net Profit Surges 21% to Rs 309 Crore Amid Strong Performance

Company Overview

The Patanjali Group, founded by Baba Ramdev and Acharya Balkrishna, is a prominent Indian conglomerate known for its focus on natural, Ayurvedic, and wellness-oriented products. Initially centered on Ayurveda and herbal health, the group rapidly expanded into diverse sectors, including FMCG, healthcare, food products, personal care, and education. Key brands like Patanjali Ayurved and Patanjali Foods offer a wide range of products, from food items and supplements to cosmetics and home care products. With a mission to promote traditional Indian medicine and healthy living, the Patanjali Group has become a household name, emphasizing quality, affordability, and a focus on sustainable practices.
Incorporated in 1986, Patanjali Foods Limited is a leading FMCG company in India, known for its presence across edible oils, food & FMCG, and wind power generation sectors. Originally known as Ruchi Soya Industries Limited, the company has established a strong portfolio of brands, including Patanjali, Ruchi Gold, and Nutrela, offering products at various price points to meet diverse consumer needs. Patanjali Foods is engaged in processing oil seeds, refining crude oil, and producing a variety of food products, such as biscuits and nutraceuticals. It also has a significant focus on renewable energy with wind power generation operations and maintains an extensive network of manufacturing plants across India.

Industry Outlook

For FY25, the industry outlook for Patanjali Foods appears promising, driven by growth in the FMCG and health foods sectors, a rising demand for natural and organic products, and increasing health consciousness among Indian consumers. The edible oil segment, a major contributor to Patanjali Foods’ revenue, is expected to grow due to increased consumption and demand for healthier oil alternatives. The health and wellness segment, particularly nutraceuticals, is also gaining momentum as consumers prioritize immunity and preventive health.

According to recent market reports, the FMCG sector in India is projected to grow at a compound annual growth rate (CAGR) of around 12-14% through 2025. The edible oils market, specifically, may see a CAGR of 9-10%, while the nutraceutical segment, where Patanjali Foods is expanding, is estimated to grow at a CAGR of 15-17%.

These growth rates align with Patanjali Foods’ strategy to diversify its product portfolio and increase its market share across segments. With its focus on affordable, natural, and Ayurvedic products, Patanjali Foods is well-positioned to benefit from these industry trends in FY25.

Business Segments

Patanjali Foods operates in two main business segments: Edible Oils and Food

          & FMCG.

• Edible Oils: This segment is the largest contributor, accounting for

 approximately three-fourths of Patanjali Foods’ total revenue. In Q2 FY25,

 the Edible Oils segment experienced a 10% increase in revenue, reaching

 ₹5,939 crore, largely supported by stable demand. Branded edible oils played

 a significant role, contributing nearly 74% to this segment’s revenue. This

steady demand helped drive the overall revenue for the company to

₹8,154 crore for the quarter, reflecting an overall growth of about 4%

compared to the previous year.

• Food & FMCG: The Food and FMCG segment, though smaller, accounted for around 25% of the total revenue in Q2 FY25. However, the segment faced challenges, with a 7% decline in revenue, attributed to sluggish demand in the broader industry. Despite this, staples like rice, pulses, and wheat performed better, with sales reaching ₹1,032 crore. The segment’s EBITDA for Q2 FY25 was ₹234 crore, reflecting some impact from the softer demand for other FMCG products​.

• Wind power generation: Although smaller in scale, this segment generated revenue of ₹14 crore, showcasing Patanjali Foods’ commitment to sustainable energy by fulfilling 20% of its energy needs through renewable sources.

Key Subsidiaries and Their Information

Patanjali Foods Limited has several key subsidiaries that enhance its operations and product offerings, particularly in the FMCG sector and edible oils. Here are the main subsidiaries as of FY25:

• Ruchi Soya Industries Limited: This is one of the largest subsidiaries, focusing on edible oils and food products. It significantly contributes to Patanjali Foods’ revenue through its various brands, including Ruchi Gold and Nutrela. Following its acquisition by Patanjali in 2021, Ruchi Soya has been integral to the company’s operations.
• Patanjali Ayurved Limited: This subsidiary plays a crucial role in providing a range of Ayurvedic and herbal products. Patanjali Foods has expanded its FMCG offerings by acquiring the food business from Patanjali Ayurved, which includes a variety of consumer-focused products.
• Patanjali Natural Biscuits Private Limited: This subsidiary is involved in the production of biscuits and snacks, further diversifying Patanjali’s product range in the FMCG sector.
• Patanjali Wind Energy Private Limited: Engaged in wind power generation, this subsidiary contributes to the company’s sustainability efforts by utilizing renewable energy sources. In Q2 FY25, it generated revenue of ₹14 crore from this segment​.

Q2 FY25 Highlights

• In Q2 FY25, Patanjali Foods Limited reported robust performance despite a challenging environment in both the Food & FMCG and Edible Oils segments. The company’s revenue from operations reached ₹8,154.19 crore, marking a 4.25% year-on-year (YoY) growth.
• Patanjali Foods achieved its highest-ever EBITDA of ₹493.86 crore, reflecting a 17.81% YoY improvement. The EBITDA margin also expanded by 70 basis points to 6.06%.
• Gross profit rose significantly from ₹1,021.26 crore to ₹1,292.81 crore, primarily due to favorable pricing scenarios in the market. The PAT increased by 21.38% YoY to ₹308.97 crore, with a corresponding margin improvement of 53 basis points.
• There has been a noticeable shift in consumer preferences from traditional General Trade channels to modern trade, e-commerce, and quick commerce, leading to higher inventory levels among traditional partners. The company exported products to 21 countries, generating ₹34.55 crore in revenue from exports during the quarter.
• The wind turbine power generation segment contributed ₹14.35 crore in revenue, with the company sourcing approximately 20% of its energy needs from renewable sources​.
• During the quarter, Patanjali Foods significantly increased its advertising and sales promotion expenses, surpassing ₹130 crore, which brought the total for H1 FY25 to over ₹185 crore. The company launched various marketing campaigns across print, social media, TV, and radio, promoting specific products. Notably, celebrities such as Shilpa Shetty, Shahid Kapoor, and Khesari Lal Yadav were engaged to endorse Nutrela-branded soya chunks, edible oils, and nutraceuticals, respectively.
• In addition to celebrity endorsements, Patanjali initiated the Rural Connect Program and Nutrela Operation Thunder to enhance brand visibility and distribution in rural, underserved markets. The brand also collaborated with popular YouTube channels like Rajshri Foods and Get Curried, featuring star chefs who showcased enticing recipes using Nutrela product.

Financial Summary

INR in Cr.	Q2 FY25	Q1FY25	Q2FY24	Q-o-Q Growth	Y-o-Y Growth
Total Revenue	8154	7173	7822	13.68%	4.25%
Selling/ General/ Admin Expenses Total	130	117	91	10.94%	43.59%
Depreciation/ Amortization	56	57	60	-0.90%	-6.07%
Total Operating Expense	7762	6824	7487	13.73%	3.67%
Operating Income	393	349	335	12.63%	17.15%
Profit Before Tax	417	359	335	16.13%	24.42%
Profit After Tax	309	263	255	17.46%	21.23%
Diluted Normalized EPS	8.53	7.26	7.03	17.49%	21.34%

SWOT Analysis

Strengths:

1. Wide range of products
2. Strong brand reputation
3. Extensive reach in both rural and urban areas
4. Solid financial performance

Weaknesses:

1. Heavy reliance on edible oils
2. Limited international presence
3. High costs of raw materials

Opportunities:

1. Rising consumer interest in health and wellness products
2. Growth in online and modern retail channels
3. Potential to expand into underserved rural markets

Threats:

1. Intense market competition
2. Regulatory hurdles
3. Economic downturns