Patanjali Foods Limited
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Revenue for Q1 FY26 at approximately INR8,900 crores, up 24% YoY.
- Edible Oil segment revenue grew ~25% YoY to INR6,685 crores; branded edible oil sales contributed 72%.
- Oil palm plantation business revenue doubled to INR592 crores; cultivated area at 92,133 hectares.
- HPC segment delivered revenue of INR639.02 crores with 18.7% EBITDA margin (vs 15.7% in Q4 FY25); Dant Kanti exported to 9 countries.
- Biscuits vertical grew 8.24% YoY; Doodh biscuits revenue at INR304 crores (+15% YoY).
- Nutraceuticals segment grew 37.6% YoY and turned EBITDA positive.
- New SKUs launched at attractive price points to boost demand.
Key Negatives
- Overall demand remained muted; urban demand under pressure.
- Profitability impacted by elevated raw material costs (butter, milk, sugar) and reduction in import duties on palm, soya, and sunflower oil.
- Food and other FMCG segment revenue degrew 15% YoY; EBITDA margin dropped to 5.23% (from 9.42% in Q1 FY25).
- Modern trade under pressure due to lower footfalls and competition from e-commerce/quick commerce.
- Staples segment faced margin pressure due to government interventions and high inventory costs.
Forward Guidance
- Capex plans: Not disclosed.
- New products/segments: Pipeline of 10–12 SKUs focused on body wellness; new launches in medicated juices and dental care.
- Expected client wins/losses: Not disclosed.
- Revenue/margin outlook: FMCG segment to grow 8–10%, HPC to grow 15% with 200 bps margin expansion; edible oils to grow 2–3% with margin guidance of 2–4% (targeting closer to 4%).
- Other strategic initiatives: Continued focus on affordable/smaller packs, rural expansion via Gramin Mitra and Arogya Kendras, omnichannel strategy, and brand building.
2 · Q&A Highlights
Q 1 (Composite): How is Patanjali evolving its brand and product portfolio to win in premium urban categories and wellness/ayurveda segments?
A (Management):
• Targeting 50% revenue from FMCG in 5 years; focus on wellness, health, and nutrition positioning.
• Consistent brand narrative and new product development aligned with wellness/ayurveda.
• Confident of achieving 50-50 revenue split between FMCG and edible oils.
Q 2 (Composite): How does management evaluate ROI on media spend, channel expansion, and innovation for FMCG growth?
A (Management):
• Media spend aimed at immediate sales uplift; branded sales in edible oil now above 72%.
• Long-term margin target: 8–10% for FMCG, 2–4% for edible oils, double-digit EBITDA at company level.
• Aspiration: INR50,000 crore revenue (half FMCG), INR5,000 crore EBITDA.
Q 3 (Composite): What is the impact of new-age/regional players on Patanjali’s market share?
A (Management):
• Some local/regional share loss in select SKUs, but no significant impact overall; unique positioning and loyal customer base.
• Attracting new, younger consumers interested in wellness and ayurveda.
Q 4 (Composite): What are the signs of urban demand recovery and expected contribution to topline/margins?
A (Management):
• Early signs of urban recovery due to easing inflation and policy measures; food segment expected to benefit most.
• FMCG segment to grow 8–10%, HPC 15%, edible oils 2–3%; willing to sacrifice low-margin staples for overall margin improvement.
Q 5 (Composite): What is the D2C (Direct-to-Consumer) share and future plans for inorganic growth?
A (Management):
• D2C currently below 1% of revenue; total non-traditional channels (modern trade, e-commerce, quick commerce, D2C) at 12.5%.
• D2C growing at ~40% on a small base, focus on nutraceuticals.
• Open to acquisitions if pricing and brand fit are right, but nothing imminent.
Q 6 (Composite): What is the outlook for biscuits, high-margin foods, and staples?
A (Management):
• Biscuits expected to grow at double digits; strong consumer response.
• Ghee and premium HPC products (e.g., Dant Kanti, skin care) to drive margin expansion.
• Staples revenue at INR616 crores; cautious approach due to government intervention and margin volatility.
Q 7 (Composite): What is the margin and growth outlook for edible oils and staples?
A (Management):
• Edible oil margin guidance maintained at 2–4%, targeting closer to 4% for FY26.
• Edible oil volume growth expected at 2–3%.
• Staples to remain in INR600–1,000 crore revenue band, but focus on profitability over volume.
3 · Other Key Numbers
- Q1 FY26 revenue: INR8,900 crores (24% YoY growth)
- EBITDA margin: 3.75%
- PAT margin: 2.02%
- Edible oil segment revenue: INR6,685 crores; branded edible oil sales: 72%
- Oil refining capacity (end FY25): 33.36 lakh tons; utilization: 44.85%
- Oil palm plantation revenue: INR592 crores; cultivated area: 92,133 hectares; 43.4% in prime yielding age
- HPC segment revenue: INR639.02 crores; dental care: INR332.18 crores; skin care: INR157.21 crores; home care: INR91.61 crores
- Food and other FMCG revenue: INR1,660.67 crores (down 15% YoY)
- Biscuits revenue: INR451 crores; EBITDA: INR41 crores (9.2% margin)
- Doodh biscuits revenue: INR304 crores (+15% YoY)
- Nariyal products revenue: INR50 crores
- Textured soya proteins revenue: INR139.69 crores
- Ghee revenue growth: 23% YoY
- Nutraceuticals revenue: INR17 crores; turned EBITDA positive
- Nutrela revenue: INR140 crores; EBITDA: INR20 crores (14.5% margin)
- Staples revenue: INR616 crores; EBITDA: flat
- Ad spend: 0.72% of revenue from operations; INR64 crores on ATL in Q1
- Modern trade, e-commerce, quick commerce, D2C: 12.5% of total revenue; e-commerce: 4%, quick commerce: 1.5%, D2C: ~1%
- Export: Dant Kanti to 9 countries in Q1 FY26
All figures as stated in the call.