Patanjali Foods Limited

Consumer Defensive — Packaged Foods · NSE

₹367.30+₹1.65 (+0.45%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Patanjali Foods Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Patanjali Foods Limited engages in the processing of oil seeds and refining crude oil for edible use in India, Africa, Europe, Australia, and internationally. The company operates through three segments: FMCG; Edible Oils; and Wind Turbine Power Generation.

IndustryPackaged Foods

SectorConsumer Defensive

Employees7,387

Annual revenue₹40,142 Cr

How does it make money?

Turns over ₹40,142 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 7,387 employees supports ₹5.43 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.43 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE51.0%

What is the outlook?

4 analysts covering the stock expect revenue to grow about 6.6% and earnings to grow about 20.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+6.6%

Est. earnings growth+20.2%

Analysts4

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +28% while net margin moved +59% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+28%

Margin effect+59%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

• ROCE of 11.2% is adequate but not distinctive
• ROCE has been broadly stable
✗ EBITDA margin of 4.7% is thin — little cushion if costs rise
✗ Net margin of 4.6% is slim
• Revenue has compounded at 8.7% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

73/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

20.3x

3Y Median

57.1x

40 monthly readings · mean 58.0x · range 20.7x–91.9x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 64% below its 3y median of 57.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 61% below the peer median of 51.7x.

vs. its own history

Cheap

57.1x median over 40 months · -64%

vs. sector peers

Cheap

51.7x median of 4 peers · -61%

vs. generic bands

Fair

15x–35x

EV/EBITDA

22.4x

PEG

0.75

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 9.0% to 13.9%.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 92% over 3 years, from ₹1,454 Cr to ₹2,789 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,307 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 51% against revenue up 28% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 79% against revenue up 28% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 64% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 61% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 51% against revenue up 28%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 3%✓ 4.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1,307 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 8.7% CAGR
Latest reported year was 27.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 11.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹39,966 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

20.3x

Fair

Fairly valued against the generic band

P/B Ratio

3.05x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹18.11

Profitable

Profitable on a per-share basis

ROE

13.9%

Moderate

Moderate capital efficiency

ROCE

11.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

27.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

86.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.10%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,307 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

20.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

4.3%

Weak

Thin margins leave little room for error

Net Margin

4.6%

Average

Average bottom-line conversion

Current Ratio

2.14

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.19

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

374.6 / 359.1

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹31,268 Cr	₹31,659 Cr	₹33,739 Cr	₹40,142 Cr	+8.7%
EBITDA	₹1,376 Cr	₹1,334 Cr	₹1,998 Cr	₹1,885 Cr	+11.1%
EBITDA Margin	4.4%	4.2%	5.9%	4.7%	—
PAT (Net Profit)	₹886 Cr	₹765 Cr	₹1,301 Cr	₹1,814 Cr	+27.0%
EPS	₹8.18	₹7.05	₹11.97	₹16.67	+26.8%
ROE	9.0%	7.5%	11.4%	13.9%	—
ROCE	12.2%	11.1%	15.7%	11.2%	—
Total Debt	₹1,454 Cr	₹1,049 Cr	₹788 Cr	₹2,789 Cr	+24.2%
Free Cash Flow	-₹438 Cr	₹1,646 Cr	₹53 Cr	-₹1,307 Cr	—

🟢 Revenue has grown at 8.7% a year over 3 years.

🟢 EBITDA has grown at 11.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 4.7% over 3 years.

🟢 PAT (Net Profit) has grown at 27.0% a year over 3 years.

🟢 EPS has grown at 26.8% a year over 3 years.

🟢 ROE has risen from 9.0% to 13.9% over 3 years (+4.9 pts).

🔴 ROCE has fallen from 12.2% to 11.2% over 3 years (-1.0 pts).

🔴 Total Debt has grown at 24.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹18,802 Cr

Total Liabilities

₹5,706 Cr

Cash & Equivalents

₹616 Cr

Operating Cash Flow

-₹333 Cr

Capex

-₹974 Cr

Shareholding (proxy)

Institutional Holding

18.0%

Insider Holding

69.5%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹4.05

Ex-Dividend Date

21 Aug 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹532.5

+45.0% vs CMP

Target Range

₹490 – ₹580

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

5 mixed1 general

Patanjali Foods (BSE:500368) Stock Forecast & Analyst Predictions

Simply Wall Street, 07 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Patanjali Foods Ltd - Shares decline 17% intraday - Read details

India Infoline, 15 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Why Patanjali Foods Share Price is Falling

Equitymaster, 15 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Patanjali Foods share price rises 5% today. What is driving the rally in the FMCG stock?

Livemint, 16 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Patanjali Foods Issues Statement After Shares Slide Over 17% — Here's What The Company Said

NDTV Profit, 15 Jul

PATANJALI Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑