Target: ₹700
CMP: ₹543.90
Management of Patanjali Foods (PFL) issued an upbeat outlook – overall and across operating businesses – at a recent meeting. Highlighting a clear sequential demand uptick in Q4-26 that became visible from December post-GST cuts, management called out faster consumption growth in rural markets, with urban centres also responding positively.
In edible oils (70 per cent + of sales, 40 per cent of EBITDA), while we note most of the pricing growth (taken post-import duty hike in September-2024) would now have anniversarised, PFL flagged a fresh firming-up of prices by 5-8 per cent across oils (palm & soya 5-7 per cent, sunflower 7-8 per cent) on global supply constraints (driven by the Russia-Ukraine conflict, weather concerns in South America, Indonesia land reforms).
While costs have again started looking up in edible oils, we note PFL as the no.2 player in edible oils with market leadership in palm oil, has leveraged its pricing power and brand equity in maintaining double-digit sales’ growth despite sharp pricing in the earlier cost-upcycle – among key strengths supporting our positive view.
We keep our FY26E-FY28E estimates unchanged, and build FY25-FY28E revenue/ EPS CAGR of 9/18 per cent. We maintain our BUY rating with TP of ₹700, valuing the stock at P/E of 38x (unchanged, at 20 per cent discount to FMCG peers’ FY27E average) on September-2027E EPS.
Published on January 14, 2026
