Patanjali Foods has seen its stock price jump by more than 25% over the past three months. The brokerage firm, Systematix Institutional Equities, has given the stock a ‘BUY’ rating, with a target price of ₹2,259. This suggests a potential increase of 25% from Tuesday’s opening price of ₹1,800.05 on the BSE.
Systematix believes Patanjali Foods could surpass ₹40,000 crore in revenue by FY27, with an 8.5% profit margin. The report also notes that the company’s FMCG business is expected to contribute 41% of revenue by FY27, up from 30% in FY24.
The brokerage values the company at 40 times its estimated earnings for FY26, which is a 20% discount compared to other FMCG companies trading at an average of 50 times their earnings for the same period.
Systematix expects strong growth for Patanjali Foods in the FMCG sector, driven by expanding product lines and a growing distribution network. They also foresee better profit margins and returns as the company focuses more on FMCG and premium products.
However, the brokerage warns that fluctuations in edible oil prices, challenges in integrating new business segments, and potential regulatory hurdles could pose risks to their forecast.
Patanjali Foods Stock Performance
On Monday, Patanjali Foods’ stock hit a 52-week high at ₹1,844 on the BSE. The stock touched an intraday high of ₹1,812.85 and a low of ₹1,787. Ruchit Jain, Lead Research Analyst at 5paisa, noted that the stock is currently in an uptrend, forming a higher top-higher bottom pattern. The 40-day exponential moving average (DEMA) at 1650 is seen as strong support in the near term, and traders are advised to buy on dips.
Key Growth Factors
Systematix highlights several factors driving Patanjali Foods’ growth:
- Leading the market in branded textured soy protein.
- Strong synergies with its food and HPC portfolio.
- The reputable Patanjali Group as a promoter.
- Expanding the high-margin premium food portfolio through the Nutrela brand.
- Rapid growth in the nutraceuticals segment.
- Presence in mass, value, and premium market segments.
Patanjali Foods is a large multinational company focusing on FMCG and Fast Moving Health Goods (FMHG). It operates 25 processing plants across India and has access to 43 contract manufacturing units. The company is involved in both upstream and downstream operations, particularly in the palm and soy value chains, offering a wide range of products that cater to different customer preferences and income levels in the retail market.
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