### 2. *Profit Margins*:
- *EBITDA*: Q2 FY25 EBITDA was ₹493.86 Cr, up by 17.8% YoY from ₹419.20 Cr in Q2 FY24. EBITDA margin increased to 6.06%, reflecting a 70-bps improvement.
- *PAT (Profit After Tax)*: PAT for Q2 FY25 was ₹308.97 Cr, growing by 21.4% from ₹254.54 Cr in Q2 FY24. PAT margin improved to 3.8% in Q2 FY25 compared to 3.2% in Q2 FY24.
### 3. *Profitability, Leverage & Liquidity Ratios*:
- *Profitability Ratios*:
- *Gross Profit Margin*: Rose from ₹1,021.26 Cr in Q2 FY24 to ₹1,292.81 Cr in Q2 FY25, driven by improved pricing strategies in the edible oils segment.
- *Leverage Ratios*:
- *Debt-to-Equity Ratio*: At approximately 0.11, given total Borrowing of ₹111,557 Lakh and equity of ₹1,083,574 Lakh.
- *Liquidity Ratios*:
- *Current Ratio*: Approximately 2.77, with current assets at ₹854,878.82 Lakh and current liabilities at ₹307,162.17 Lakh.
### 4. *Valuation Ratios* (Stock Price: ₹1770):
- *Earnings per Share (EPS)*: For Q2 FY25, EPS was 8.54.
- *Price-to-Earnings Ratio (P/E)*: Estimated at 64.4x (₹1770 / 27.47 trailing EPS over four quarters).
- *Price-to-Book Ratio (P/B)*: Estimated at 5.9x (₹1770 / ₹301 per share book value).
### 5. *Industry Overview*:
- The FMCG sector faces seasonal demand challenges due to weather impacts. However, Patanjali's rural demand growth surpasses urban, supporting segment stability amidst overall sluggishness in FMCG.
### 6. *Peer Comparison*:
- Patanjali competes with players like HUL and Nestle, which have shown resilience in urban markets but comparatively lower rural growth. Patanjali's aggressive rural market push and brand collaborations provide a competitive advantage in the health and wellness niche. For Edible Oil Adani Wilmar and Marico are direct competitors.
### 7. *Outlook for Patanjali*:
- *Near Term*: Expected volatility in edible oils may impact margins slightly; however, FMCG revenue should stabilize as seasonal impacts recede.
- *Long Term*: Patanjali’s expansion into new product lines (nutraceuticals, personal care) and rural distribution channels promise growth. Recent approvals to acquire PAL’s Home & Personal Care Business should further diversify revenue streams and enhance competitive positioning.
### 8. *Disclosure*:
- We are not a tip provider, we should check the data and invest accordingly if we feel confident.
