Patanjali Foods experienced a decline in its revenue from edible oil sales in the July-September quarter, attributed to a decrease in domestic prices influenced by a global price downturn, as per CEO Sanjeev Asthana. Asthana explained that since India heavily relies on edible oil imports, any fluctuations in global prices have a corresponding impact on domestic prices. Despite a slight increase in sales volume, the company’s revenue from edible oil dropped from Rs 5,890.73 crore in the previous quarter to Rs 5,421.5 crore in the current quarter.
Asthana noted that palm oil futures on the Bursa Malaysia Derivatives Exchange had fallen by 4.64 per cent during the second quarter, contributing to the overall decline in revenue. However, he expressed optimism, stating that the worst is likely behind them in terms of edible oil prices, anticipating a rise in the next two quarters due to international factors.
Addressing the prospect of passing on any price increases to consumers, Asthana mentioned that it could be done in real-time, especially for partial upticks. Meanwhile, the growth in the July-September quarter was buoyed by new launches in the food and fast-moving consumer goods segment, contributing Rs 2,487.6 crore, which accounted for 31.8 per cent of the total revenue.
Looking ahead, Patanjali Foods aims to maintain an Ebitda margin of 16-18 per cent in the food and FMCG segment and 2-4 per cent in the edible oil segment. The company has invested in the development of 4,500 hectares of palm oil plantation across India in Q2, with a total plantation area of 68,498 hectares. Asthana highlighted that the impact of the palm oil plantation would become apparent in four to five years.
