Patanjali Foods climbs to new record high; Systematix sees further 24% upside

Patanjali Foods stock has rallied 44 percent in the last one year compared to 27 percent rise in Nifty during this period.

Shares of Patanjali Foods gained over 3 percent to hit a fresh record high on August 21. There is interest in the stock as Systematix has initiated coverage on it with a 'Buy' rating and a target price of Rs 2,259, implying a potential upside of 24 percent from the previous closing price.

In its coverage initiation, the brokerage highlighted Patanjali Foods' aggressive palm oil plantation strategy within its edible oils business. "Patanjali is poised to leverage the strong premiumisation drive in its foods business, it said.

The brokerage also emphasised the upcoming addition of a high-margin HPC (Home and Personal Care) segment, which is expected to create multiple synergies. "There is a large distribution expansion opportunity, especially in alternate channels," Systematix said.

Follow our market blog to catch all the live action

Furthermore, the company has taken several steps to boost its credibility and demonstrate its commitment to stakeholders. Analysts at Systematix, project a Sales, EBITDA and PAT CAGR of 10.3 percent, 41.3 percent and 48.9 percent, respectively over FY24-27.

Patanjali Foods reported that its net profit had nearly tripled to Rs 263 crore in Q1FY25. The same stood at Rs 88 crore in the same quarter last year. Its revenue from operations, however, declined 8 percent year-on-year (YoY) to Rs 7,173 crore in the June quarter, compared with Rs 7,767 crore a year ago.

At 10:20 am, Patanjali Foods shares were trading 3.4 percent higher at Rs 1,884.55 on the National Stock Exchange (NSE). So far this year, the stock has gained 20 percent, beating benchmark Nifty's returns of around 13 percent during this period. In the 12 months gone by, the counter has rallied 44 percent compared to 27 percent rise in Nifty.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.