Patanjali Foods shares up 8% in a month; here's what analysts say

Shares of Patanjali Foods Ltd have climbed nearly 8 per cent in the past one month. The stock was last seen trading 0.42 per cent up at Rs 1,260. At this price, it has gained 8.10 per cent in a month and 18.74 per cent in the last one year.

Patanjali Foods recently said that US-based firm GQG Partners along with other investors bought 2,15,64,571 shares or 5.96 per cent stake in the company. The shares were bought through the stock exchange settlement process by the way of offer for sale (OFS). Patanjali Foods concluded a 7 per cent stake sale last week. With this, the promoter group's stake in the company fell to 73.82 per cent from 80.82 per cent earlier, meeting the minimum shareholding norms.

Patanjali Foods had fixed a floor price of Rs 1,000 per share for the OFS by promoter Patanjali Ayurved. The company was looking to offload up to 25,339,640 equity shares of face value of Rs 2 each, representing 7 per cent of the total paid-up equity share capital. The company had suggested that it could sell up to 7,239,897 additional shares, representing 2 per cent of the total paid-up equity share capital in the event oversubscription. But it did not exercise it.

Here's what technical analysts said:

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "A decisive move beyond Rs 1,250 could open up the next leg of rally towards Rs 1,300 on an immediate basis."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, suggested Rs 1,310-1,330 levels as next upside targets for the stock.

Milan Sharma, Founder and MD of 35North Ventures, said, "Patanjali is well poised in its segment, and the OFS was done to meet the regulatory norms. This is an opportunity to buy the shares as the long-term outlook on the stock remains positive, looking at future growth potential and last few quarterly financial performance."

Ganesh Dongre, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Traders can hold this stock with a stop loss placed at Rs 1,150 for the target price of Rs 1,300 in a one or two-month period."

Vaibhav Kaushik, Research Analyst at GCL Broking, said, "The stock has a target price of Rs 1,670 till Diwali this year."

On the other hand, AR Ramachandran from Tips2trades said, "The stock looked overbought and bearish."

Ravi Singh, Vice-President and Head of Research at Share India, said, "The stock price may witness some correction soon. The counter may touch Rs 1,100."

The counter's 14-day relative strength index (RSI) came at 70.20. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 51.24 against a price-to-book (P/B) value of 4.88. The scrip has a one-year beta of 0.99, indicating average volatility.

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