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Systematix Report
Systematix estimates a revenue and EPS CAGR of 10% and 17%, respectively, over FY25–FY28E. The brokerage maintains its Buy rating on Patanjali Foods with an unchanged target price of Rs 660. The valuation is based on 36x December‑2027E EPS, implying a ~15% discount to the FMCG peers' FY28E average multiple.
While costs have started looking up, Patanjali Foods as the no.2 player in edible oils, has leveraged its pricing power and brand equity in maintaining double-digit sales' growth despite sharp pricing in the earlier cost-upcycle.
The favorable turn in foods' growth across biscuits, staples and ethnic foods since Q3 FY26 is a key positive; the brokerage believes growth is being driven by -
- Patanjali Foods' expanding distribution network (c.2mn+ direct reach, c.4mn+ total reach) and
- launch of premium variants – expect FY25-FY28E sales' CAGR of 7.5%.
Across foods and home and personal care segments, Patanjali Foods has created a meaningful place in key categories like milk biscuits, cow ghee, honey, toothpaste and hair oils. While near-term margin outcomes remains a monitorable, with the revenue contribution of FMCG products estimated to expand from 7% in FY22 to c.32% in FY28E, the brokerage expects Patanjali Foods to garner superior blended margins over FY26E-FY28E, with c.64% Ebitda contribution from higher-margin businesses (resulting in overall FY26E-FY28E operating profit margin expansion of 170bps), boosted by HPC business addition (margins picking up by 10pp over the past year in the segment).
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