Why ICICI Securities sees 15% upside on Patanjali Foods
ICICI Securities initiated an 'ADD' rating on Patanjali Foods with a target price of Rs 2,100, implying a 15 per cent upside from Tuesday’s closing price.
- Aug 6, 2025,
- Updated Aug 6, 2025 12:26 PM IST
Shares of Patanjali Foods Ltd declined 1.5 per cent in Wednesday’s trade, falling to a day’s low of Rs 1,804.45 apiece on BSE against its previous day's closing of Rs 1,833.70 apiece.
At 11:04 am, the stock was trading 0.82 per cent lower at Rs 1,818.75. The stock is now nearly 10 per cent off its 52-week high of Rs 2,030.
ICICI Securities initiated an 'ADD' rating on Patanjali Foods with a target price of Rs 2,100, implying a 15 per cent upside from Tuesday’s closing price. “We expect Patanjali’s performance to improve with the acquisition of FMCG businesses, which should help it in stabilising the overall performance,” the brokerage said.
“In our view, FMCG business profitability is much stable than oil due to lower volatility in raw material prices and better pricing power, thereby improving the visibility of Patanjali’s overall profitability,” ICICI Securities said.
ICICI Securities sees revenue, EBITDA and earnings growing at a CAGR of 11 per cent, 18 per cent and 21 per cent, respectively, over FY25–27, driven by an increasing contribution from the FMCG segment. The FMCG business, comprising foods and home & personal care (HPC), is expected to contribute 34 per cent of revenues and 62 per cent of profitability by FY27, up from 28 per cent and 44 per cent, respectively, in FY25.
On the dividend front, Patanjali Foods has declared a final dividend of Rs 2 per equity share of a face value of Rs 2 for FY25, the company said in an exchange filing dated August 4. . ICICI Securities also said that Patanjali’s edible oil business, despite short-term margin pressure, remains value accretive with RoCE potential of 15–20 per cent. The segment is expected to grow 4–5 per cent in volume terms, supported by premiumisation and palm oil cultivation.
Meanwhile, the company’s strategic acquisitions from Patanjali Ayurved including the food business in FY23 and the HPC portfolio in FY25 are expected to drive margin expansion and cash flow stability. The brokerage attributed this to “strong brand equity, distribution synergies, and a sharp focus on premiumisation.”
Shares of Patanjali Foods Ltd declined 1.5 per cent in Wednesday’s trade, falling to a day’s low of Rs 1,804.45 apiece on BSE against its previous day's closing of Rs 1,833.70 apiece.
At 11:04 am, the stock was trading 0.82 per cent lower at Rs 1,818.75. The stock is now nearly 10 per cent off its 52-week high of Rs 2,030.
ICICI Securities initiated an 'ADD' rating on Patanjali Foods with a target price of Rs 2,100, implying a 15 per cent upside from Tuesday’s closing price. “We expect Patanjali’s performance to improve with the acquisition of FMCG businesses, which should help it in stabilising the overall performance,” the brokerage said.
“In our view, FMCG business profitability is much stable than oil due to lower volatility in raw material prices and better pricing power, thereby improving the visibility of Patanjali’s overall profitability,” ICICI Securities said.
ICICI Securities sees revenue, EBITDA and earnings growing at a CAGR of 11 per cent, 18 per cent and 21 per cent, respectively, over FY25–27, driven by an increasing contribution from the FMCG segment. The FMCG business, comprising foods and home & personal care (HPC), is expected to contribute 34 per cent of revenues and 62 per cent of profitability by FY27, up from 28 per cent and 44 per cent, respectively, in FY25.
On the dividend front, Patanjali Foods has declared a final dividend of Rs 2 per equity share of a face value of Rs 2 for FY25, the company said in an exchange filing dated August 4. . ICICI Securities also said that Patanjali’s edible oil business, despite short-term margin pressure, remains value accretive with RoCE potential of 15–20 per cent. The segment is expected to grow 4–5 per cent in volume terms, supported by premiumisation and palm oil cultivation.
Meanwhile, the company’s strategic acquisitions from Patanjali Ayurved including the food business in FY23 and the HPC portfolio in FY25 are expected to drive margin expansion and cash flow stability. The brokerage attributed this to “strong brand equity, distribution synergies, and a sharp focus on premiumisation.”