Patanjali Foods Limited - Quarterly Update - Q4FY24

This is a preliminary update of the demand trends and the company's operating performance across its verticals for Q4FY24 and FY2024. The details will be shared upon finalization of the result for the quarter ended March 2024 and the full year 2024. The revenue growth numbers, and other details provided in this note are based on management estimates.

The company delivered a steady quarterly performance, led by a consistent result in both the Edible Oil segment and the Food & FMCG segment.

Edible Oil:

During the quarter, the prices of edible oils in India remained stable and rebounded from the low levels witnessed in the previous quarter.

Revenue from the Edible Oil segment in Q4 showed modest single-digit growth compared to the previous quarter, accompanied by a favorable EBITDA margin. Furthermore, the segmental volume in Q4 experienced mid-single-digit growth year-on-year, while FY24 witnessed double-digit growth.

In Q4 FY24, branded sales continued to account for over 77% of the total edible oil sales value. Additionally, Ruchi Gold was honored with the "Best Brand Award in Palm Oil" by the Rabi Seminar & Central Organization for Oil Industry & Trade (COOIT).

During the quarter, Premium Nutrela Oils experienced a notable double digit volume growth over the previous year, showcasing the effectiveness of the product offerings in meeting consumer preferences and market demands.

The Company exported its products to more than 20 countries, maintaining its export sales trend in line with the previous quarter.

For FY24, the cumulative area under cultivation in the Oil Palm Plantation business reached 74,376 hectares. As of March 31, 2024, the plantation area under three years old stood at approximately 33%, compared to around 19% as of March 2023, indicating rapid plantation expansion.

Food & FMCG:

In the March quarter, the revenue of the Food & FMCG segment remained resilient, demonstrating high single-digit revenue growth while maintaining stable EBITDA margins.

The Food & FMCG segment accounted for more than 30% of revenue from operations, compared to around 23% in Q4'FY23. The segment's contribution remained consistent with Q3'FY24 and Q2'FY24 at ~32% and notably higher than Q1'FY24 of ~25%. This increase is in line with Patanjali's strategic efforts to make a tactical shift in the revenue mix, margin profile and expansion of food product portfolio. In February, the company launched new products in the tea category, and the initial market response showed promising performance metrics.

The biscuits portfolio continued to demonstrate strong growth momentum, with the flagship brand 'Doodh' biscuits achieving the milestone of becoming an INR 1,000 Crore brand this year. Doodh, Nariyal and Crunchy Coconut biscuits have received tremendous consumer response and registered double-digit year-on-year growth. Additionally, the recently launched premium biscuit range continued to garner positive traction among consumers.

In Q4FY24, sales of Ghee and Dry Fruits remained steady while the sales of Kesar and beverages registered strong growth sequentially.

The company is strategically realigning its product portfolio within the Food & FMCG sector to cater to the evolving consumer preferences towards healthier options. In the Nutraceuticals segment, a noteworthy double-digit year-on-year growth has been achieved, with the Ecommerce channel demonstrating a remarkable upsurge.

Overall, the growth in the Food & FMCG segment is primarily driven by the urban demand. However, rural demand is also expected to pick up in the upcoming quarters, fuelled by factors such as a promising monsoon season, potential rise in real rural wages, and other macroeconomic factors stimulating growth.

The company remains committed to brand building initiatives, emphasizing the expansion of distribution channels and bolstering brand presence through targeted advertising and promotional campaigns. The company became a partner of the Pro Kabaddi League 2024 and the official title sponsor of Fever FM, the official radio partner of the KKR IPL'24 team. Additionally, influencer contracts have been initiated with national-level bodybuilders for nutraceuticals to enhance product visibility within the target audience.

Shares of Patanjali Foods Limited was last trading in BSE at Rs. 1345.25 as compared to the previous close of Rs. 1350.95. The total number of shares traded during the day was 94008 in over 6009 trades.

The stock hit an intraday high of Rs. 1369.35 and intraday low of 1310.00. The net turnover during the day was Rs. 124698234.00.

Source : Equity Bulls

Keywords

PatanjaliFoods INE619A01035 BusinessUpdate Q4FY24