ICICI Direct has given Buy recommendation for Patanjali Foods with a target price of Rs. 1750 in its research report issued on Sep 20, 2022
ICICI Direct’s research report on Patanjali Foods
Patanjali Foods (PFL) is one of the largest edible oil companies in India with oilseed extraction (mustard, soybean & others) & refining capacity of 3.9 million tonnes per annum (MTPA). This includes seven standalone coastal refineries for processing imported crude palm oil (CPO). PFL also has a sizable food business, which includes soya chunks & soya flour under ‘Nutrela’ brand. It acquired the biscuits, noodles and breakfast cereals business from Patanjali Ayurveda (PAL) in May-June 2021 and remaining foods business portfolio of PAL in July 2022, which includes Rs 4173 crore of sales through products under categories like cow ghee, edible oil, honey, Chyawanprash, atta, pickles, juices, jams & ketchup. The company also forayed into nutraceutical and wellness products in FY22.
Outlook
We value PFL at 40x FY24 earnings to arrive at a target price of Rs 1750/share.