Patanjali Foods shares fall by over 16% in 2 weeks : The Tribune India

Patanjali Foods shares fall by over 16% in 2 weeks

The slide has brought share prices to a year-long low of Rs 700 as against a high of Rs 1,495 four months back

Patanjali Foods shares fall by over 16% in 2 weeks

Baba Ramdev. File photo



Tribune News Service

New Delhi, February 4

In the slipstream of the bigger crash of Adani Group stocks, the shares of Patanjali Foods over the last two weeks have slid by over 16 per cent with the circuit breaker being applied on two trading days.

The slide has brought the share prices to a year-long low of Rs 700 as against a high of Rs 1,495 four months back. This is in stark contrast to the situation on September 20 last year when the upper circuit breaker was applied to the shares of Adani Wilmar and Patanjali, which are in the same business.

Analysts cite two reasons for the fall, both related to market conditions. The first is said to be the underwhelming quarterly results for December. Patanjali Foods said its revenue during the quarter rose 26 per cent on a year-on-year basis which was not what the market had expected. The drag due to lower rural demand estimated at 7% led to gross profits declining by over 12% and margins contracting to 2.1% from 4.6% in the same quarter last year. These figures set the shares on a downward trend. What may have accentuated matters was the Centre’s decision to discontinue the import of crude soybean oil under the tariff rate quota (TRQ) from April 1, 2023.

Under TRQ, Patanjali and companies in the business could import a specified volume of the oil at nil duty. Patanjali as well as its competitors have been deprived of the opportunity of importing part of the oil at nil duty which would drive the input cost higher and impact consumption in this segment. The crash of Adani Wilmar stocks may also have been partly due to this reason.

#gautam adani

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