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00:00Welcome back you watching the small and mid cap show, well now we are joined by Mr. Sanjeev
00:14Asthana who is the CEO of Patanjali Foods, Patanjali Foods came out with its Q1 FY25
00:19results recently.
00:20Mr. Asthana welcome to NDTV Profit, my first question to you is you know Q1 FY25 net profit
00:28is up 200%, however revenue has seen a 7% downward trend, you know give us some color
00:34as to how the quarter has gone by and you know how does FY25 look forward?
00:40So two parts, one is that on the edible oil front, so I think you know it's very gratifying
00:48that we've turned the corner and the results have been you know pretty much in the run
00:55rate of what we are always aspiring that they should be upwards of 4% margin and we
01:00are quite pleased about it, our volumes were marginally down in this quarter on the edible
01:05oil side but that's very to be expected because typically this is a very low season, the demand
01:12side is exceedingly low and in this particular window we don't tend to do high volume, so
01:17we are pretty confident that this will go, the margins have improved substantially.
01:21On the FMCG side, you know the revenues went down a bit and partially due to excessive
01:28heat that we witnessed in the northern part of the country and several other places but
01:34that we are expecting should start to stabilize.
01:36So broadly if you ask me how the results have been, I would say that very balanced you know
01:41both on the FMCG and the edible oil side, going forward in the next two quarters I believe
01:50that it will be at a normal run rate and the last quarter should substantially improve,
01:54so pretty much our guidance for the whole year is that we should expect superior performance
02:00compared to the last year and one major event that will happen is our HPC business that
02:05we are going to be acquiring and hopefully once the regulatory approvals and the shareholders
02:11approvals are in, so at least anywhere between five to six months during this financial year
02:17we should be able to take those revenues and the profitability and so I think end of the
02:21year we should be in a substantially better position.
02:23Right, Mr. Asana you know as you rightly mentioned your margins have significantly improved,
02:29so going forward I want to understand that will you be able to you know sustain the margins
02:34at the same level that is around 5.7% or do you see an upside from here and if yes what
02:40will be the levers for the same?
02:42So certainly two parts which I just mentioned that one is the natural sort of margin you
02:48know addition that we have on account of the HPC acquisition but overall also I am expecting
02:54our margins to start improving you know as we consolidate the you know the entire FMCG
03:01food portfolio with the HPC portfolio and second is on the edible oil side if I am not
03:06expecting any significant volatility, so we should tend to you know go on this side of
03:10improvement only, so net-net I would imagine that we should be closer to 6.5% margin you
03:17know by the end of the year which should you know which will set us on the stated objective
03:22that we had that in five years time we want to go towards a double-digit EBITDA on a blended
03:28basis between edible oils and all the FMCG portfolio that we have.
03:32Understood and how quickly do you see yourself you know going to that double-digit EBITDA?
03:40So maybe in three years time, so every year our target was that we keep improving by 100
03:44basis points every year, so we clearly are seeing the stability on the edible oil side,
03:48we are doing better than expected on the FMCG portfolio with HPC getting added I think we
03:54should be pretty much getting there between three and four years time.
03:58Understood and you know with respect to signs of rural recovery you know the entire FMCG
04:02space right now is seeing signs of rural recovery, have you also observed the same and what kind
04:09of green shoots are you seeing there?
04:11No so rural markets have you know been consistently improving over last two quarters, I am expecting
04:18with all the support that the government has provided through the MSP increases you know
04:23with the more money post the harvest that the farmers have, the demand side should start
04:27to pick up for sure, we are also expecting that the budget that will be unveiled tomorrow
04:33should be supportive of the you know the in terms of the more money being placed in the
04:38hands of the rural sort of areas both the farmers and the non-farm part of it through
04:44better schemes and you know more sort of economic activity getting generated.
04:49So certainly I think the firmness of the rural recovery should get established better and
04:54we should be going to a period where we should see substantial progress on the rural demand
04:58side and I think it should augurs very well for the FMCG companies.
05:02Right and Mr. Asana you know one last quick question you know in FY24 your revenue stood
05:10at roughly 31,700 odd crores, you know FY25 what is the kind of number revenue target
05:17that you have and at the same time what is the kind of bottom line that you are targeting?
05:24So I will just explain that the revenue on the edible oil side we do not chase per se
05:29because that is subject to the per unit price internationally on the edible oil side.
05:34So I would say that if we can grow our volume by anywhere between 4 and 6 percent it should
05:38be quite satisfactory for us for the edible oil side and on the FMCG side our growth aspiration
05:45are between 12 to 15 percent year on year.
05:48So if we can achieve that 12 to 15 percent growth on year on year we'll be good and on
05:54the income side anywhere between depending on the timing of the HPC business I think
05:59we should be anywhere between closer to 1800 to 2000 crores of EBITDA this year.
06:04Understood, well Mr. Asana thank you so much for giving us those insights on Patanjali
06:08food and taking our time and speaking with us at NDTV Profit.
06:11Well with that it's all that we have on the show for now, stay tuned for more news and
06:15updates on NDTV Profit.