INDIA—The FMCG company Patanjali Foods has reported a US$24.6 million net profit for the January-March quarter, compared to US$31.6 million in the same quarter last year, amid increasing expenses and low demand.
Patanjali’s performance mirrors the current challenging state of the food retail market.
Revenues from operations in the reported quarter increased 4% YoY from US$942.9 million to US$984.7 million.
Revenues from the company’s FMCG segment contributed 30% to total revenue, an increase from 19.5% reported in the previous year.
In an official statement, Patanjali Foods said, “With a focus on the dynamic interplay between traditional sales channels, the rise of e-commerce, and the emergence of D2C platforms, the company can operate efficiently in the ever-changing market scenario.”
The company also attributes this increase in operational revenue to its expansion efforts.
Patanjali has expanded its reach to 27 countries, opening locations in Singapore and Australia.
Export revenues increased from US$6.9 million in the previous quarter to US$38.6 million in the reported quarter.
Patanjali attributed this contribution to the expansion of e-commerce and D2C operations.
The company also attributes this increase to advertising expenditure.
In the statement, Patanjali reports that its advertising expenditures started showing promise with an increase in sales volumes in the reported quarter.
This uptake comes after the company experienced significant backlash after the Supreme Court reprimanded India’s drug regulator for failing to take action against the company’s Divya Pharmacy unit for making false claims of curing chronic diseases.
The pharmacy unit and Patanjali, the parent company, have expressed optimism about their commitment to sound advertising.
However, the company’s total expenses increased by 6% to US$963.9 million.
High prices of everyday consumer goods like flour, meat, and eggs slowed down demand, especially in rural India.
Consumers are forced to cut back on spending on essentials in a bid to maneuver through inflation.
The company’s edible oils wing is the worst hit by lower demand during the reported quarter.
Revenues from this wing declined by an estimated 9% to US$705.3 million in the reported quarter.
However, the company expressed optimism about demand correction in the year’s remaining months.
Patanjali’s shares closed 0.5% higher on the day the report was released, indicating optimism in the market.
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