Shares of Patanjali Foods witnessed a significant uptick, surging 1% during the early trading hours on November 9. The boost came after the company reported remarkable financial results for the second quarter. Patanjali Foods’ profit soared to ₹255 crore ($30.63 million) in the quarter ended Sept. 30, marking a substantial increase from ₹112 crore the previous year. This impressive growth was propelled by a notable 5.1% increase in profit margins, up from 2.3% in the previous year.
A key factor contributing to Patanjali’s enhanced profitability was a strategic reduction in expenses, which outpaced the decline in revenue. The company experienced a more than 23% drop in raw material costs, leading to a significant decrease of over 10% in total expenses, which amounted to ₹7511 crore. Although Patanjali’s revenue from operations witnessed a modest 8% decline, dropping to ₹7822 crore, the prudent cost management strategy helped mitigate the impact on overall financial performance.
One of the primary factors influencing Patanjali Foods’ revenue was the decline in the prices of edible oils, which account for 69% of its total revenue. In the face of India’s record edible oil imports and weakened global oil prices, edible oil companies, including Patanjali Foods, faced challenges. However, Patanjali’s adept handling of these challenges and its focus on expense optimization led to a resilient financial performance.
Interestingly, in contrast to Patanjali Foods’ positive trajectory, other edible oil companies, such as Adani Wilmar, struggled during the same period. Adani Wilmar posted a loss for the quarter, underlining the significance of Patanjali Foods’ prudent financial management and strategic decision-making.
At 9:19 am, Patanjali Foods’ shares were trading 1.17% higher at ₹1,469.70 on NSE.
