FMCG stock in focus after signing MoU with Manipur Govt. for oil palm plantation program

An FMCG stock engaged primarily in the business of processing of oil-seeds and refining of oil, is drawing significant attention after signing a Memorandum of Understanding (MoU) with the Government of Manipur to implement an Oil Palm Plantation Programme, with aims to boost oil palm cultivation in the state, signaling a potential growth opportunity for the company in the agricultural sector.

Price Movement

During Thursday’s trading session, shares of Patanjali Foods Limited reached an intra-day high of Rs.1749.85 per share, rising 0.06 percent from its previous close of Rs.1,734.75 per share. However, the stock retreated later and is currently trading at Rs.1708.80 apiece. Over the past one year, the stock has delivered 30 percent returns.

What Happened

Patanjali Foods Limited has entered into a Memorandum of Understanding (MoU) with the Government of Manipur to launch an Oil Palm Plantation Programme as part of the National Mission on Edible Oils – Oil Palm (NMEO-OP), towards enhancing oil palm cultivation in the state, covering four districts in a phased approach.

According to the agreement, Patanjali Foods Limited will commence operations on April 1, 2025, covering 2,700 hectares of oil palm plantations in the first year, starting with three districts – Imphal East, Thoubal, and Kakching – with the Bishnupur district included in the second phase.

With this development, Patanjali Foods has expanded its oil palm plantation efforts to six states in the Northeast, where NMEO-OP is being actively implemented. For the fiscal year 2024-25, the company has already covered 10,000 hectares of oil palm plantations across the region and plans to extend this to 20,000 hectares in 2025-26.

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Product Portfolio

Patanjali Foods operates across diverse business segments, with a strong presence in edible oils, manufacturing a variety of oils such as mustard, soybean, sunflower, rice bran, sesame, groundnut, and coconut oil. The company also offers a wide range of food products, including dry fruits, ghee, honey, flour, sugar, salt, juices, beverages, biscuits, breakfast cereals, noodles, pickles, sauces, sweets, and tea.

Additionally, it deals in value-added soya products like soya flakes, lecithin, textured vegetable protein, grits, flour, and soybean meal. Patanjali Foods is also committed to renewable energy, focusing on wind power generation to reduce its carbon footprint.

Renowned Brands

Patanjali Foods is home to several iconic brands, including Nutrela, Mahakosh, Sunrich, Ruchi Gold, and Ruchi No.1, which are widely recognized in the market. The company also offers a range of products under the Patanjali brand, capitalizing on the strong brand presence of its parent company to enhance consumer appeal.

Financial Performance

According to its recent financial updates, Patanjali Foods Ltd reported consolidated revenue of Rs.9,103 crores in Q3 FY25, marking a 15 percent increase from Rs.7,911 crores in Q3 FY24. Additionally, the company saw a surge in net profit to Rs.371 crores, rising 71 percent from Rs.217 crores in the same period last year.

Important Accounting Ratios

The company has a Return on Capital Employed (ROCE) of 12.97 percent and a Return on Equity (ROE) of 9.18 percent. Its Price-to-Earnings (P/E) ratio stands at 54.67, lower than the industry average of 70.04. Furthermore, the company maintains a current ratio of 4.37, a debt-to-equity ratio of 0.01, and an Earnings Per Share (EPS) of Rs.31.74.

Written by – Siddesh S Raskar

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