Patanjali Foods Stock: Analyst Sees 9% Revenue Growth, Maintains Buy

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AuthorIshaan Verma|Published at:
Patanjali Foods Stock: Analyst Sees 9% Revenue Growth, Maintains Buy
Overview

Patanjali Foods management forecasts an upbeat outlook with sequential demand upticks from December. Edible oil prices are firming 5-8% driven by global supply constraints. The company's strong brand equity and market leadership in edible oils support double-digit sales growth. Analysts maintain a BUY rating with a price target of ₹700, projecting 9% revenue CAGR.

Upbeat Demand Forecast

Patanjali Foods' management has provided an upbeat outlook, projecting sequential demand growth in the fourth quarter of fiscal year 2026. This optimism is underpinned by an observed uptick in consumption from December, showing particular strength in rural markets, with urban centers also responding positively.

Edible Oils Face Price Support

The company's dominant edible oils segment, representing over 70% of sales and 40% of EBITDA, is poised for renewed price strength. Following price adjustments after a September 2024 import duty hike, Patanjali Foods anticipates a further 5-8% increase across various oils, including palm, soya, and sunflower. This is attributed to global supply constraints stemming from the ongoing Russia-Ukraine conflict, adverse weather in South America, and land reforms in Indonesia.

Leveraging Market Leadership

Despite rising input costs in the edible oils sector, Patanjali Foods, the second-largest player with leadership in palm oil, has demonstrated significant pricing power. Its ability to maintain double-digit sales growth through a prior cost-upcycle, by leveraging strong brand equity, underpins a positive analyst view.

Analysts Reiterate Buy Call

Analysts have reiterated their BUY recommendation for Patanjali Foods, setting a price target of ₹700. This valuation is based on 38 times projected earnings for September 2027, representing a 20% discount to its fast-moving consumer goods peers. Projections include a 9% revenue and 18% earnings per share compound annual growth rate for FY25-FY28.

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