Patanjali Foods shares gained 35% in six months, how strong is the uptrend?

Shares of Patanjali Foods Ltd are expected to a reach Rs 1,950 mark in a year, according to Axis Securities. Patanjali Foods shares gained 1.60% to Rs 1,672.95 today against the previous close of Rs 1646.50 on BSE. Shares of Patanjali Foods opened higher at Rs 1457.95 on BSE. Patanjali Foods shares have gained 40.76% in a year and risen 5.73% since the beginning of this year.  The stock has risen 35% in six months. Total 3886 shares changed hands amounting to a turnover of Rs 64.42 crore on BSE. Market cap of the firm rose to Rs 60,009 crore. 

Patanjali Foods shares have a beta of 0.9, indicating low volatility in a year.

In terms of technicals, the relative strength index (RSI) of the Patanjali Foods stock stands at 61.4, 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. 

Commenting on the technical aspect of the stock,  Axis Securities said, "The quarterly chart reveals a higher high-low formation, signaling strong upward momentum. The stock has entered a larger consolidation phase, forming an ascending triangular pattern since mid of 2021. Breaking above the consolidation at Rs 1500 this month, it is poised for an uptrend following the pattern breakout."

"The monthly strength indicator RSI is in a bullish mode and holding above its reference line indicating positive bias. We expect the stock to sustained upward momentum following the breakout, we project a target range of Rs 1835-1950 for the stock," added the brokerage.

On the fundamental outlook, the brokerage said, "Patanjali oil business was impacted on account of volatility in commodity prices. However, management expects oil business is likely to see profitability in H2FY24 and has maintained its EBITDA margins guidance of 2-4% in the long term. Food and FMCG businesses continue to remain strong on back of distribution expansion and new product launches. Long-term growth drivers for the firm are premiumisation, distribution expansion and foray into new categories."

The stock of the Baba Ramdev-led firm reported a 126% rise in net profit for the quarter ended September 2023. Net profit rose to Rs 254.5 crore for the quarter ended September 2023 against a net profit of Rs 112.3 crore in the year-ago period.  

Patanjali Foods shares gained 1.64% to Rs 1479  today compared to the previous close of Rs 1455.05 on BSE.

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Revenue in Q2 fell 8.1 per cent to Rs 7,821.9 crore against Rs 8,514.1 crore in the year-ago period. The food and FMCG segment logged a revenue of Rs 2,487.62 crore in Q2, clocking a 5.4 per cent rise from the year-ago period. Revenue in the edible oils segment reported a degrowth of 13.38 per cent to Rs 5,421.45 from Rs 6,259.41 in the year-ago period.

“The edible oil segment faced an ongoing pricing pressure during Q2 mainly due to excessive imports that led to elevated inventory levels, impacting both revenue and margins,” said the company.

The company achieved export sales of Rs 41.65 crore during the quarter. The products are exported to 23 countries.

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