PATANJALI Q1 FY26 earnings call.
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Revenue
₹8,766 Cr
verified against source
Revenue YoY
24%
reported change
EBITDA
Pending
latest reported figure
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Actual signal trajectory
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What the record says.
Patanjali Foods reported standalone Q1 FY26 revenue of Rs 8,900 crore with 24% YoY growth, though EBITDA margin compressed to 3.75% due to elevated raw material costs (butter +25-30%, sugar, milk) and inventory markdown post duty cut on edible oils. Edible oil segment (72% of revenue) grew 25% to Rs 6,685 crore but EBITDA margin was thin at 1.78% following May 2025 government duty reduction from 27.5% to 16.5% on crude palm/soy/sunflower oil, causing buyers to defer procurement. HPC delivered robust 18.7% EBITDA margin on Rs 639 crore revenue with Dant Kanti driving growth. Food & FMCG degrew 15% to Rs 1,661 crore (vs 9.42% margin in Q1 FY25) as government welfare schemes and duty-free yellow pea imports pressured staples demand. Management maintained FY26 guidance: edible oil 2-3% growth at 2-4% margins, FMCG 8-10% growth with double-digit EBITDA target, biscuits at double-digit growth. Long-term aspiration remains Rs 50,000 crore revenue (50/50 split) with 10% EBITDA margin. Key risk: government intervention in staples and commodity price volatility could continue weighing on margins in H2.
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Guidance to track
- Management reiterated 15% YoY growth target for the HPC portfolio with anticipated 200 basis point margin expansion in coming quarters, building on 18.7% Q1 margin.
- Confident of achieving 2-3% volume growth in edible oils with margins expected to move towards 4% (higher end) as duty cut normalizes pricing and improves domestic refining competitiveness.
- Management expects biscuits to grow at double-digit rates (10%+ YoY) going forward, leveraging differentiated positioning and strong consumer response in new markets.
- Long-term aspiration: Rs 50,000 crore revenue split 50/50 between edible oils and FMCG, with company-wide EBITDA expanding to 10% (approximately Rs 5,000 crore), delivering 8-10% FMCG margins and 4% edible oil margins.
Risks flagged
- Government procurement (~35-40% of rabi production) creates overflow of subsidized stocks in market, pressuring private trade margins. Weekly/15-day physical stock declarations required from companies, creating compliance burden and inventory risk if government suddenly releases stocks at lower prices.
- May 2025 duty cut from 27.5% to 16.5% on crude palm/soy/sunflower oil caused buyer deferral and inventory markdown losses in Q1. While viewed as long-term positive for refining competitiveness, near-term margin remains sensitive to commodity price swings.
- Urban demand remains under pressure with consumers opting for smaller packs and cheaper regional brands. Modern trade facing footfall decline from e-commerce competition. Recovery in urban markets, while showing early green shoots, remains tentative.
- Butter costs increased 25-30% YoY and ama/food (beverage raw material) rose 20% QoQ, impacting ghee and beverage margins. Price hikes implemented mid-quarter only partially offset costs; full benefit expected in Q2, but input cost volatility remains unmanaged risk.
Key quotes
- We have taken a very conscious choice that we will continue building the business selectively where it makes sense for us. But if it means a direct cash loss, if it means a very direct too much of exposure that we might have to the government's intervention then we'll be careful with that category.
- Our view is very clear that 200 basis point margin expansion that we'd like to attain in the FMCG we'd like to go upwards of in the double digit minimum EBITDA margin on the FMCG that we want to clearly establish.
- Our longer-term construct of margin is 8 to 10% that we're looking at on the FMCG side and very clearly we're looking at the margin construct on the edible oil between 2 and 4%. The company's aspiration is that we would like to grow our revenues to 50,000 crores of which 25,000 crore should come from FMCG, 25,000 crore from edible oil and the margin should expand towards the double digit EBITDA.
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