Patanjali Foods anticipates maintaining edible oil margins above 4% this year, driven by robust oil palm plantation performance and a resilient FMCG segment, despite weather and geopolitical challenges impacting the sector.
Patanjali Foods expects edible oil margins to stay above 4% this year, a sign the company believes the recent strength in its core commodity business can offset a patchier retail environment. Chief executive Sanjeev Asthana said the oil palm plantation, oilseed crushing operations and firmer edible oil prices are underpinning the outlook, with elevated prices likely to persist if weather and geopolitical pressures remain in place, according to EquityPandit.
The plantation business has become an increasingly important profit engine. Asthana said it generated close to ₹357 crore in EBITDA last year and could exceed ₹400 crore this year, while Patanjali Foods continues to expand its oil palm footprint. The company’s own website says it has been pushing further into oil palm cultivation and has widened its food and FMCG presence over the past several years as it broadened beyond its former Ruchi Soya identity.
In consumer goods, the June quarter was dented by a one-off inventory write-off in staples, which Asthana described as largely an accounting issue that has now been fixed. He said the rest of the FMCG portfolio remained broadly on track, with biscuits beating the company’s 12% margin goal and the Nutrela consumer business approaching 18%. Patanjali Foods’ own brand pages show biscuits and Nutrela as key parts of its wider packaged-foods push.
The company reaffirmed its full-year targets of 8% to 10% margins for foods and more than 15% for home and personal care, while standing by its longer-term goal of a 6.5% blended margin by FY28. Asthana said that remains achievable as oil palm contributes a larger share of revenue. He also flagged some softness in rural demand, blaming an uneven monsoon for part of the weakness, though he said it was too early to know whether the trend would last.
On capital allocation, Asthana ruled out both a demerger of the FMCG arm and a share buyback for now, saying the company has ample cash and strong free cash flow. He added that Patanjali Ayurved’s approval to buy into Magma General Insurance is separate from Patanjali Foods and will not affect the listed company’s balance sheet. For the June quarter, the company reported consolidated revenue of ₹11,337.45 crore, up 29% from a year earlier, marking a fourth straight record quarter, while profit after tax rose to ₹335.73 crore from ₹180.36 crore.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
