Patanjali Foods shares hit record high; industry-leading growth likely, says this brokerage
Shares of Patanjali Foods opened higher at Rs 1819.95 on BSE. Patanjali Foods shares have gained 44% in a year and risen 19.59% since the beginning of this year.
- Aug 21, 2024,
- Updated Aug 21, 2024 10:04 AM IST
Shares of Patanjali Foods Ltd hit a record high in early deals on Wednesday amid negative sentiment in the broader market. Patanjali Foods shares gained 3.42% to a high of Rs 1875 today against the previous close of Rs 1812.95 on BSE. Shares of Patanjali Foods opened higher at Rs 1819.95 on BSE. Patanjali Foods shares have gained 44% in a year and risen 19.59% since the beginning of this year. Total 7365 shares changed hands amounting to a turnover of Rs 1.37 crore on BSE. Market cap of the firm rose to Rs 67,852 crore.
Patanjali Foods shares have a beta of 1.3, indicating high volatility in a year.
In terms of technicals, the relative strength index (RSI) of the Patanjali Foods stock stands at 65.4, signaling it's trading in the neither in the overbought nor in the oversold zone. Patanjali Foods stock is trading higher than the 5 day, 20 day, 50 day and 100 day, 150 day and 200 day moving averages.
Brokerage Systematix is bullish on the stock and assigned a price target price of Rs 2259. It expects the company to deliver industry-leading growth in the FMCG space.
“Patanjali Foods’s strong brand equity and distribution network should boost its aggressive forays into emerging categories like nutraceuticals, spices, HPC, etc. We expect Patanjali Foods’ industry leading distributionled growth in core categories and robust margins in new premium categories to drive 10.3%/41.3%/48.9% CAGR in revenue/EBITDA/PAT, respectively, over FY24-27E. We initiate coverage with a BUY rating and target price of Rs 2,259 valuing the company at 40x FY26E P/E, at 20% discount to FMCG sector average,” said Systematix
“We are optimistic the firm would comfortably cross Rs 40,000 crore revenue and 8.5% margin by FY27, with the revenue contribution from the FMCG business surging to 41% in FY27E from 30% in FY24. We expect the company to deliver industry-leading growth in the FMCG space, led by a combination of portfolio and distribution expansion. Margins and return ratios would continue to improve as contribution from FMCG and premium products keep rising,” added Systematix.
Detailing the key risks to the business, the brokerage said volatility in edible oil prices, integration issues with the HPC business and execution issues (including regulatory approvals) on the stated growth and margin agenda can pose risk to its call.
In the June 2024 quarter, net profit nearly tripled to Rs 263 crore against Rs 88 crore in the last year quarter. However, revenue from operations declined 8% year-on-year to Rs 7,173 crore in the June quarter compared with Rs 7,767 crore a year ago.
Shares of Patanjali Foods Ltd hit a record high in early deals on Wednesday amid negative sentiment in the broader market. Patanjali Foods shares gained 3.42% to a high of Rs 1875 today against the previous close of Rs 1812.95 on BSE. Shares of Patanjali Foods opened higher at Rs 1819.95 on BSE. Patanjali Foods shares have gained 44% in a year and risen 19.59% since the beginning of this year. Total 7365 shares changed hands amounting to a turnover of Rs 1.37 crore on BSE. Market cap of the firm rose to Rs 67,852 crore.
Patanjali Foods shares have a beta of 1.3, indicating high volatility in a year.
In terms of technicals, the relative strength index (RSI) of the Patanjali Foods stock stands at 65.4, signaling it's trading in the neither in the overbought nor in the oversold zone. Patanjali Foods stock is trading higher than the 5 day, 20 day, 50 day and 100 day, 150 day and 200 day moving averages.
Brokerage Systematix is bullish on the stock and assigned a price target price of Rs 2259. It expects the company to deliver industry-leading growth in the FMCG space.
“Patanjali Foods’s strong brand equity and distribution network should boost its aggressive forays into emerging categories like nutraceuticals, spices, HPC, etc. We expect Patanjali Foods’ industry leading distributionled growth in core categories and robust margins in new premium categories to drive 10.3%/41.3%/48.9% CAGR in revenue/EBITDA/PAT, respectively, over FY24-27E. We initiate coverage with a BUY rating and target price of Rs 2,259 valuing the company at 40x FY26E P/E, at 20% discount to FMCG sector average,” said Systematix
“We are optimistic the firm would comfortably cross Rs 40,000 crore revenue and 8.5% margin by FY27, with the revenue contribution from the FMCG business surging to 41% in FY27E from 30% in FY24. We expect the company to deliver industry-leading growth in the FMCG space, led by a combination of portfolio and distribution expansion. Margins and return ratios would continue to improve as contribution from FMCG and premium products keep rising,” added Systematix.
Detailing the key risks to the business, the brokerage said volatility in edible oil prices, integration issues with the HPC business and execution issues (including regulatory approvals) on the stated growth and margin agenda can pose risk to its call.
In the June 2024 quarter, net profit nearly tripled to Rs 263 crore against Rs 88 crore in the last year quarter. However, revenue from operations declined 8% year-on-year to Rs 7,173 crore in the June quarter compared with Rs 7,767 crore a year ago.