Jefferies Sees 39% Upside for Patanjali Foods with Rs 560 Target Price
Jefferies has maintained its 'Buy' rating on Patanjali Foods, predicting a 39% upside from the current price. The brokerage firm set a target price of Rs 560 for the company's shares, which closed at Rs 402.75 on September 22.
The management of Patanjali Foods acknowledged near-term rural weakness but remains confident in its full-year guidance. Despite disruptions in sunflower oil supply and commodity inflation, the company maintained its growth projections:
Edible oil: 4% volume growth
Foods: 8-10% growth
FMCG and home and personal care: 15% growth
The key to Patanjali Foods' investment case is its three-tier structure, with edible oil being the large, low-margin base that generates scale and distribution reach. The company's management remains confident in achieving higher-end margins in edible oil and sustaining 18-20% margins in FMCG and HPC.
The brokerage firm will be watching several key indicators, including the festive season recovery, edible oil margin against commitment, FMCG and HPC growth, and rural demand indicators into the second half.