Patanjali Foods shares drop 6% after Q3 profit tanks 19%

Patanjali Foods shares dropped 6% to Rs 1565.3 in Friday's intraday trade on BSE after the firm reported a 19% year-on-year (YoY) drop in net profit for the quarter ended December to Rs 217 crore. Revenue from operations fell 0.2% to Rs 7,911 crore.

Sequentially, the topline rose just 1.1%, while the bottomline dropped by nearly 15%.

The mainstay edible oils business reported a 15.3% drop in revenue to Rs 5,483 crore, while the fast-moving consumer goods (FMCG) business reported a sharp 64% growth in revenue to Rs 2,499 crore.


Thanks to the growth in the FMCG business, the drop in the overall revenue was contained.

Earnings before interest, taxes, depreciation, and amortization or EBITDA declined nearly 7% YoY to Rs 344 crore. Operating margin contracted 30 basis points on year to 4.35%.

The drop in the operating profit was despite a sharp reduction in raw material costs. Input costs slumped 23.4% YoY to Rs 4,957 crore.
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At 10:23 am, the scrip was trading 4.3% lower at Rs 1,591.8 on BSE. However, the stock has gained nearly 70% in the past year.

As per Trendlyne data, the average target price of the stock is Rs 1,773, which shows an upside of 12% from the current market prices. The consensus recommendation from one analyst for the stock is a 'Strong Buy'.

Technically, the stock's day RSI (14) is at 62.1. The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. MACD is at 5.9, which is above its center and signal Line, this is a bullish indicator.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)