Patanjali Foods: Street’s optimism in assigning high FMCG valuation multiples was misplaced

Patanjali targets FY27 volume growth of 3-5% in edible oils, 8-10% in foods, and 15% in home care. However, ICICI Securities cut its EPS estimate by 14%, forecasting ongoing earnings pressure due to rising input costs and stagnant profitability in the edible oils segment.

The Patanjali Foods stock, at its peak price of ₹670.33 on 16 April 2025, commanded a market capitalization of almost ₹73,000 crore. Given FY25’s net profit of ₹1,283 crore, it was valued at a price-to-earnings ratio of 57x, reflecting optimism in assigning a high FMCG valuation multiple to Patanjali.

 

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