Patanjali Ayurved’s Profit Rose Nearly 40% In FY20, Says Brickworks

The ayurveda product maker’s revenue increased 6% year-on-year to Rs 9,024.2 crore, while profit jumped nearly 38.8% to Rs 485 crore, according to Brickworks Ratings.

Operating profit rose 9% over a year ago to Rs 944.6 crore, the Brickworks said in a report, while affirming the ratings on the company’s short-term commercial paper.

The rating agency said while Patanjali’s operations were hit for about a week in March during the start of the national lockdown announced by the government, sales wasn’t impacted as its products were categorised as essentials goods.

“The company reported high sales during Q1 FY21 due to aggressive buying by consumers during the lockdown period as demand for its hygienic, personal care and other medicinal products grew significantly,” the report said. “Patanjali has also received an approval for manufacturing hand sanitisers in bulk quantities.”

Patanjali Ayurved is yet to respond to queries emailed by BloombergQuint.

Hindustan Unilever Ltd.’s revenue climbed up 1.6% year-on-year to Rs 38,273 crore in FY20, while net profit increased by 11.6% over a year ago to Rs 6,738 crore. Dabur India Ltd.’s revenue increased by 2% in the previous financial year to Rs 8,703.6 crore while profit was flat at Rs 1,447.92 crore. Marico Ltd.’s revenue growth was flat in FY20 at Rs 7,439 crore while its profit contracted by 7.8% to Rs 1,043 crore.

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The company had opted for a three-month moratorium on its interest and term loan payments till May, which was paid a month later, the rating agency said citing information from lenders. Patanjali has since not opted for further extensions on moratorium offered under Covid-19 regulatory package.

Patanjali acquired Ruchi Soya Industries Ltd. under the insolvency and bankruptcy code in December last year. The company has proposed to sell stake in Ruchi Soya in 2021-22. The funds raised will be used to improve its financial and operational credit metrics, the rating agency said. Its ratings also factors in Patanjali’s commitment that no further cashflow from the company will be used to fund Ruchi Soya.

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Debt rose nearly fourfold to Rs 2,000 crore in the four years through March 2020 as it ramped up investments in its units. It invested nearly Rs 900 crore at its unit in Tezpur, which generated revenue of Rs 216 crore for the nine months ended December 2019.

Brickworks has an AA-/ stable rating on the Patanjali Ayurved’s non-convertible debentures.