Patanjali Foods Ltd reported a 31.6% year-on-year decline in second-quarter profit, impacted by several macro headwinds in the edible oils segment, and squeezed margins due to high-cost inventory.
The consumer goods maker’s standalone net profit fell 32% from a year earlier to Rs 112.28 crore in the three months to September, according to its exchange filing.
Patanjali Foods Q2 FY23 (stand alone figures, annual)
- Revenue increased by 42% to Rs 8,514.12 crore
- Operating profit fell 41% to Rs 194.6 crore
- Margins stood at 2.3% versus 5.5% a year ago
- Raw material cost increased by 46.7% to Rs 6,711.56 crore. It increased by 16.8% year-on-year
Previously known as Ruchi Soya, he blamed the pressure on margins, which fell to 2.3% from 5.5% a year ago, to a sharp drop of $400 to $500 a tonne in prices. of various edible oils during these 3 months.
“As India imports over 60% of its edible oil requirements, retail prices came under pressure, coupled with currency depreciation, which impacted margins in the quarter,” the company said in a statement.
During the quarter, the demand environment remained challenging with persistently high inflation as well as fiscal measures taken by the central government, including maintaining storage limits for oils and oilseeds, government insistence on reducing retail prices of edible oils and transferring price advantages. to consumers added the company.
During the quarter, the business mix of the company’s edible oil and food businesses further improved to 74.66% and 28.18%, respectively, from 94.20% and 11.76%. %, respectively, the previous year.
“Our focus for the coming quarters is to continue the accelerated growth of the highly profitable food vertical that will drive the overall EBITDA margin growth of the business,” the company said in a statement.
Patanjali Foods expects the food business to continue to grow at a higher rate, keeping in mind the growing distribution network and wider availability on retail shelves.
According to the company, normal monsoons in most parts of the country and proactive interventions by the government and the Reserve Bank of India should bode well for a sustained recovery.