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Patanjali's Q2 FY25 financials:

Lesson 74/223 | Study Time: 5 Min

Course: Top Quality Companies

### 1. **Sales Growth Analysis**:

- **Total Sales Growth**: Patanjali's revenue from operations in Q2 FY25 was ₹8,154.19 Cr, a 4.2% YoY increase from ₹7,821.89 Cr in Q2 FY24.

- **Segmental Growth**:

- **Edible Oils**: Segment revenue was ₹5,939.21 Cr in Q2 FY25, up 9.6% from ₹5,421.45 Cr in Q2 FY24. This segment contributed approximately 72.83% of the total revenue.

- **Food & FMCG**: The segment recorded a revenue of ₹2,303.66 Cr, which declined by around 7.4% from ₹2,487.62 Cr in Q2 FY24, contributing 27.90% of the total revenue.

### 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.

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