Systematix initiates coverage on Patanjali Foods with buy rating, sees 24% upside
Brokerage firm Systematix has initiated coverage on Patanjali Foods with a 'Buy' rating and a target price of Rs 2,259. This represents an upside potential of 24% from the previous closing price of Rs 1,828.50 per share.
In its coverage initiation, Systematix highlighted Patanjali Foods' aggressive palm oil plantation plan within its edible oils business. The brokerage firm noted, «Patanjali is poised to leverage the strong premiumisation drive in its foods business.»
The brokerage also emphasised the upcoming addition of a high-margin HPC (Home and Personal Care) segment, which is expected to create multiple synergies. «There is a large distribution expansion opportunity, especially in alternate channels,» Systematix added.
Additionally, it pointed out that Patanjali Foods has undertaken several steps to enhance its credibility and commitment to stakeholders. It forecast a Sales/EBITDA/PAT CAGR of 10.3%/41.3%/48.9%, respectively, over FY24-27.
At 11:37 am, the scrip was trading marginally lower at Rs 1,822 on BSE. On a year-to-date, the stock has surged 16%, while it has risen over 40% in the past year.
In Q1 FY25, Patanjali Foods reported that its net profit had nearly tripled to Rs 263 crore. The same stood at Rs 88 crore in the last year quarter. However, revenue from operations declined 8% year-on-year (YoY) to Rs 7,173 crore in the June quarter, compared with Rs 7,767 crore a year ago.
The company achieved EBITDA of Rs 435.08 crore in the first quarter, which soared 2x YoY, while EBITDA margins were at
