Patanjali Foods forecasts 10–12% growth in HPC segment, 6–8% in foods this fiscal

Patanjali Foods, the Indore-based FMCG company, expects solid growth across its portfolio in the current financial year, led by sustained momentum in the home and personal care segment and a gradual recovery in the foods business, as reported by CNBC-TV18.

Sanjeev Asthana, chief executive officer of Patanjali Foods, said to CNBC-TV18 that the company expects annualised growth of around 12–15 per cent in home and personal care, adding that compared with November last year, when the business was taken over, growth should reach closer to 10–12 per cent on a like-for-like basis by the end of the financial year.

Asthana said the company is already seeing an improvement in demand following GST cuts, particularly in rural markets, where the home and personal care segment has shown early signs of recovery and improving momentum. He added that urban demand has been slower to respond but is expected to pick up with a lag. According to him, the demand environment should strengthen meaningfully in the second half of the year, with clear improvement expected in the third and fourth quarters. While the initial impact of the GST cuts may taper off over time, it is likely to leave the business on a structurally higher growth base of around 300–400 basis points.

The foods business has remained relatively subdued, largely due to weak urban demand, but management remains confident of a recovery. Asthana said food growth has typically been in the 8–10 per cent range, but given the continued softness in urban markets, the company now expects food volumes to grow around 6–8 per cent by the end of the financial year, broadly in line with its original guidance, as per CNBC-TV18.

Patanjali Foods is also continuing with its longer-term strategy to raise the share of FMCG in its overall revenue mix. Asthana reiterated that the company aims to make FMCG account for nearly 50 per cent of total revenue over the next three years, supported by faster growth relative to the edible oil business, CNBC-TV18 reported.

On edible oils, Asthana said the first half of the year was flat due to lower prices and some contraction in demand, but performance has improved in the second half. He informed that the pickup in the third quarter has been strong and expectations for the fourth quarter are also positive. For the full year, the company expects around 3 per cent growth in edible oil volumes, with annual growth stabilising at about 3–4 per cent going forward.

Margins in the edible oil business are expected to remain stable. Asthana stated that margins were around 3.5 per cent in the first half and should move closer to 4 per cent for the full year. Patanjali Foods currently holds close to a 10 per cent market share in edible oils and expects industry consolidation to favour larger players.

A key long-term growth driver for the company is its oil palm plantation business. Asthana said Patanjali Foods has crossed 110,000 hectares under plantation and expects earnings before interest, taxes, depreciation and amortisation from this segment to exceed ₹300 crore this year. He added that the business should grow at 10–15 per cent annually and help reduce dependence on imports over time.

At a blended level, Asthana said Patanjali Foods expects margins to improve steadily, reaching around 6 per cent and adding roughly 100 basis points each year. He reiterated the company’s longer-term target of achieving ₹50,000 crore in revenue and ₹5,000 crore in EBITDA over the next three to four years.