Patanjali Foods Share Price Falls 17.78% YoY: What Went Wrong & What’s the Target

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As per recent share price movements in Patanjali Foods, the share price has been declining by 7.93% over the past month and by 17.78% over the past year. On the last trading day, Patanjali Foods opened at ₹530.50 before retreating to a low of ₹501.75. The year-to-date performance of Patanjali Foods has also declined by -8.42%, despite this significant market activity, the stock underperformed its sector. The identities of the participants in this transaction remain undisclosed, contributing to market speculation and short-term volatility. The last traded price remained above the five-day moving average but was below the 20-day, 50-day, 100-day, and 200-day moving averages. 

Key Reasons Behind Patanjali Foods’ Share Price Fall 

There are several reasons behind the Patanjali Foods share price fall, such as broader sector weakness, underperformance of fundamentals, valuation & technical concerns, low investor confidence, and short-term technical moves.

Below are the reasons for Patanjali Foods share price fall: 

• Broader sector weakness: Within the edible oil sector, Patanjali Foods’ performance lagged behind the sector’s one-day return of -0.44%, while the Sensex recorded a positive return of 0.40% on the same day. This pattern suggests that, while short-term momentum has also put downward pressure on. 
• Underperformance of fundamentals: Investor sentiment has also lagged fundamentals, even as solid earnings are growing, leading to a decline in the share price. For example, revenue declined by 17% in its quarterly report, which negatively impacted the Patanjali Foods share price. 
• Valuation & Technical Concerns: Even though the market (BSE500) has generated returns of 9.00% over the last year, the stock has underperformed, delivering negative returns of -12.62%.
• Low Investor confidence: Patanjali Foods is a separately listed entity, so any negative or false information spread in the market may impact its regulatory environment. The higher turnover in Patanjali Foods underscores the stock’s performance and leads to low investor participation. 
• Short-term technical moves: Some short-term moves may reflect trading flows and profit-booking rather than changes in the long-term business value. For example, a drop of approximately 2% or being among the top losers on midcap indices may lead to a fall in the Patanjali Foods share price.

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Patanjali  Foods: Performance Analysis

The stock is trading at a fair value relative to its peers’ historical valuations, so over the past year, the stock has generated a return of -12.62%, its profits have risen by 43.4%, and the company’s PEG ratio is 0.9. In falling markets, high promoter-pledged shares put additional downward pressure on the stock prices. Liquidity remains adequate for sizeable trades, with the stock’s average traded value over five days supporting trade sizes of approximately ₹2.34 crores based on a 2% threshold. 

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How has Patanjali Foods Performed Recently? 

 Despite the recent share decline, Patanjali Foods exhibits strong fundamental attributes. This disparity is reflected in the stock’s performance over the past year, where it has delivered a negative return of over 14% despite profit growth of more than 40%. The price-to-earnings-to-growth (PEG) ratio of 0.9 suggests that the market may be pricing in growth expectations that are not currently translating into share price gains. Additionally, the company maintains a conservative debt profile, with a low Debt-to-EBITDA ratio of 0.62 times, underscoring its ability to comfortably service its obligations.

Patanjali Foods: A Future Outlook 

Technical indicators reinforce this bearish sentiment, with the stock trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Despite the negative trends, the company’s valuation metrics indicate some relative attractiveness. The enterprise return on capital employed ratio is 2.9, and the ROCE is 29.2, suggesting the stock is trading at a discount relative to its peers’ historical averages. The stock’s volatility highlights the 52-week low, and reduced trading volume further reflects the prevailing mood among shareholders. 

Patanjali Foods: Share Price Target

The Patanjali Foods has an average share price target of ₹570.10. The consensus estimate represents an upside of 2.10% from the last price of ₹530.60. View 12 reports from 10 analysts offering long-term price targets for Patanjali Foods Ltd. According to Wall Street analysts, the average one-year price target for Patanjali Foods is ₹540.10, with a low forecast of ₹500.20 and a high forecast of ₹550.12. 

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Patanjali Foods: Analysts’ Rating 

• The average 12-month Patanjali Foods share price target is ₹570.10, and the consensus rating is Hold (mix of Buy, Hold, & Sell). 
• The analyst’s target range is between a high of ₹550.90 and a low of ₹410.10. 
• According to some analysts, some concerns remain with a ‘Reduce’ call on the Patanjali Foods share price target of ₹550.10. 
• The analyst’s sentiment is mixed; there have been recent bullish calls (ICICI, JM), but also cautious ones (Motilal Oswal, Nuvama).

Also Read: Why is HCC Share Price Falling?

What is the Right Time to Buy the Patanjali Foods Shares? 

According to analysts, the Patanjali Foods share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all relevant factors before investing in Patanjali Foods. There are some factors to consider before investing in Patanjali Foods company shares.

1. Strong Fundamentals

Investors should review the Patanjali Foods company’s fundamentals before making an investment. If a company has strong fundamentals, high profitability, and effective management, then investors should consider investing in it.    

2. Financing Partnerships

Financing partnerships bridge the gap between customers and financial institutions, facilitating the distribution of a wide range of products and generating positive sales revenue for many consumers.   

3. Growth in the FMCG Sector

India’s FMCG sector is growing steadily on the back of rising incomes and strong demand for everyday and premium products. Urbanisation, increased spending by the middle class, and deeper rural reach by key drivers behind this trend. 

4. Highly Volatile

Prices are highly volatile, leading to significant price changes that have a substantial impact on Patanjali Foods’ stock prices. Investors must review the market structure before investing in Patanjali Foods’ company shares. 

Conclusion 

Patanjali Foods Ltd’s activity highlights the dynamic nature of mid-cap stocks, edible oil equities and the importance of monitoring both price action and volume metrics to gauge market sentiment. Even though the market (BSE500) has generated returns of 9.00% over the last year, the stock has hugely underperformed, generating negative returns of -12.62%. The price-to-earnings-to-growth (PEG) ratio of 0.9 suggests that the market may be pricing in growth expectations that are not currently translating into share price gains. The stock’s underperformance relative to its sector and the broader market may reflect concerns over near-term fundamentals or external factors. 

FAQs

What are the key reasons behind the Patanjali Foods share price fall? 

Ans. There are several reasons behind the Patanjali Foods share price fall, such as broader sector weakness, underperformance of fundamentals, valuation & technical concerns, low investor confidence, and short-term technical moves. Investor sentiment has also lagged fundamentals, even as solid earnings growth is underway, leading to a decline in the share price. For example, revenue declined by 17% in its quarterly report, which negatively impacted the Patanjali Foods share price.

What are the factors that affect Patanjali Foods’ share? 

Ans. According to analysts, the Patanjali Foods share price is determined by market factors. The share price has decreased due to internal company factors, as discussed above. Therefore, investors must review all relevant factors before investing in Patanjali Foods. There are several factors to consider before investing in Patanjali Foods’ shares. Prices are highly volatile, leading to significant price changes that have a substantial impact on Patanjali Foods’ stock prices. 

What is the Patanjali Foods share price target? 

Ans. The Patanjali Foods has an average share price target of ₹570.10. The consensus estimate represents an upside of 2.10% from the last price of ₹530.60. View 12 reports from 10 analysts offering long-term price targets for Patanjali Foods Ltd. According to Wall Street analysts, the average one-year price target for Patanjali Foods is ₹540.10, with a low forecast of ₹500.20 and a high forecast of ₹550.12. 

What are the future anticipations of the analysts on Patanjali Foods? 

Ans. he enterprise return on capital employed ratio is 2.9, and the ROCE is 29.2, suggesting the stock is trading at a discount relative to its peers’ historical averages. The stock’s volatility highlights the 52-week low, and reduced trading volume further reflects the prevailing mood among shareholders. The price-to-earnings-to-growth (PEG) ratio of 0.9 suggests that the market may be pricing in growth expectations that are not currently translating into share price gains.       

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