Summarising my initial thoughts on Patanjali Foods. Q2FY23 results, will incorporate the acquired foods division from Patanjali (transferred wef July 1st, 2022). Please see attachment
In my limited understanding, the key to the stock performing will be the company’s ability to
a) grow its high margin, high premium food portfolio profitably and increase its revenue share (currently foods share is 20%, including the acquired food brands from Patanjali), by removing distribution bottlenecks – expanding the network, and leveraging ‘Patanjali’ brand. Company aims to increase share of food portfolio to 50% in the next few years
b) improve margins by enhanced operating efficiency and increasing palm plantation acreage and output
c) grow exports
d) Increase market share, profits and margins in nutraceuticals
Key Question, I am trying to figure: is the company a FMCG major in the making – by increasing share of foods and nutraceuticals in business. Can it improve ROCEs such that the stock can re-rate
Disclosure: Taken a tracking position
Patanjali Foods.docx (394.9 KB)
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