Patanjali Foods' Q2 Edible Oil Revenue Fell On Global Price Decline, Says CEO
In terms of prices of edible oils, the worst is behind, and it's likely to rise in next two quarters, Sanjeev Asthana says.
Patanjali Foods Ltd. witnessed a sequential fall in its revenue from edible oil sales as domestic prices softened, following a decline in global prices, according to Chief Executive Officer Sanjeev Asthana.
As India imports a large portion of edible oil, any changes in the global prices affect domestic price to some extent, Asthana told BQ Prime. Hence, Patanjali Foods' revenue declined in the July-September quarter, even though sales volume was marginally up, he said.
Palm oil futures in Bursa Malaysia Derivatives Exchange have declined 4.64% during the second quarter, he said.
Patanjali Foods' revenue from edible oil fell to Rs 5,421.5 crore during the quarter ended September as against Rs 5,890.73 crore in the previous quarter.
In terms of prices of edible oils, the worst is behind and it's likely to rise in the next two quarters due to international reasons, the CEO said.
In terms of passing on the price rise to consumers, he said, "Typically, if there is an uptick partially, it can be passed on to consumers... It's a pretty real time basis."
New launches in the food and fast-moving consumer goods segment drove growth in the quarter, Asthana said. New launches are likely to continue in the segment, he said.
Patanjali Foods' revenue in the segment went up Rs 2,487.6 crore, and it contributed 31.8% to its total revenue.
The FMCG player is aiming to reach and maintain an Ebitda margin of 16-18% in the food and fast-moving consumer goods segment, and 2-4% in the edible oil segment, Asthana said.
The company developed 4,500 hectares of palm oil plantation pan India during Q2, and the total area under plantation is 68,498 hectares. The impact of palm oil plantation would be seen in four to five years, according to Asthana.
