PATANJALI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.6

📊 Core Financials Analysis

Profitability

ROE: 12.1% and ROCE: 15.6% — moderate returns, acceptable but not industry-leading.

EPS: ₹11.2 — decent, though not high enough to justify the current valuation.

PAT Qtr: ₹180 Cr vs ₹359 Cr — sharp decline (-31.4%), indicating earnings volatility.

Balance Sheet & Cash Flow

Debt-to-equity: 0.07 — very low leverage, a strong positive.

Dividend Yield: 0.55% — modest, not a major income generator.

Cash flows are likely stable, but the drop in PAT raises caution on sustainability.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 54.1 Highly overvalued vs industry PE of 29.3

P/B Ratio ~5.77 Elevated for a mid-ROE business

PEG Ratio 3.11 Overvalued relative to growth

Intrinsic Value ₹520–₹560 (est.) Current price ~8–15% above fair value

🧠 Business Model & Competitive Edge

Company Profile: Patanjali Foods Ltd (formerly Ruchi Soya) operates in edible oils, oleochemicals, and packaged foods.

Segments

Edible oil refining and palm plantation.

Oleochemicals and value-added food products.

Strengths

Strong brand recall under Patanjali umbrella.

Diversified product base and distribution network.

Challenges

Earnings volatility and margin pressure.

Promoter pledging (37.8% of holding) raises governance concerns

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Analysts have revised earnings forecasts downward recently

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📈 Technical & Sentiment Overview

RSI: 55.2 — neutral to mildly bullish.

MACD: 0.08 — flat momentum, no clear trend.

DMA 50 & 200: Price slightly above both — consolidation phase.

Volume: Above weekly average — active trading interest.

FII/DII Holding: Mixed — FII reduction, DII increase.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹540–₹570 — closer to intrinsic value and technical support.

Holding Strategy

Suitable for medium-risk investors seeking FMCG exposure.

Monitor earnings consistency and promoter actions.

Long-term potential hinges on margin expansion and brand monetization.

Patanjali Foods is a brand-rich but valuation-heavy play. If you're bullish on India's health-conscious FMCG wave and can tolerate short-term volatility, it may be worth a watchlist spot. Want to compare it with Marico or Dabur next?

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