Ramdev-owned Patanjali Foods has clocked profit in the second quarter (Q2) ended September 30 which is more than double as a cut in expenses outpaced falling revenue, dragged by lower edible oil prices, as news agency Reuters reported. The profit of Ruchi Gold oil maker jumped to Rs 255 crore ($30.63 million) in Q2 from Rs 112 crore a year earlier.
Patanjali's total expense dropped more than 10 per cent to Rs 7,511 crore as raw material costs declined 23 per cent. Meanwhile, the slide in spends helped offset a 8 per cent decline in Patanjali's revenue from operations to Rs 7822 crore.
Revenue from edible oils, which accounted for 69 per cent of its topline in the quarter, dropped over 13 per cent. India's record edible oil imports and weaker global oil prices have weighed on edible oil companies. Last week, Fortune-maker Adani Wilmar posted a loss for the quarter.
Patanjali's revenue rose about 5.5 per cent in the company's food business, which makes Patanjali-branded biscuits and the "Nutrela" line of products from wheat flour to honey.
Sanjeev Asthana, CEO, Patanjali Foods, said in a statement he is optimistic that the festival season and increase in consumer spends will drive growth in the next quarter.
The company in a release said, “The edible oil segment faced an ongoing pricing pressure during Q2 mainly due to excessive imports that led to elevated inventory levels, impacting both revenue and margins.The price trend observed in Q2 remained consistent with that of Q1, displaying divergent price fluctuations between the physical and futures markets. The prices of edible oil continue to have a cooling effect."
Consumer companies grappled with weak rural demand in the first two months of the July-September quarter due to peaking inflation and delayed monsoons. However, easing food prices and rains picking up in September helped them claw back, a NielsenIQ report showed.
At 1 pm, shares of Patanjali Foods on Thursday were trading at Rs 1,430 apiece, down 1.72 per cent on the BSE.