Systematix backs Patanjali Foods' strong sales, pricing edge; sees 36% gain

Patanjali Foods share price today: Brokerage firm Systematix Institutional Equities has maintained its 'Buy' rating on Patanjali Foods, citing the company’s strong brand equity and pricing power that have helped sustain double-digit sales growth despite rising costs.

 

According to the brokerage, the positive momentum in the foods segment, including biscuits, staples, and ethnic foods, since Q3FY26 is driven by PFL’s expanding distribution network of over 2 million direct and 4 million total reach, as well as the launch of premium variants. Across foods and HPC segments, Patanjali has established a significant presence in categories like milk biscuits, cow ghee, honey, toothpaste, and hair oils.

 

 

Systematix Institutional Equities expects the FMCG revenue contribution to rise from 7 per cent in FY22 to around 3 per cent by FY28E, leading to superior blended margins with roughly 64 per cent Ebitda coming from higher-margin businesses and an overall operating margin expansion of 170 basis points over FY26E-FY28E. The brokerage projects FY25-FY28E revenue/EPS CAGR of 10 per cent/17 per cent and maintains a target price of ₹660, valuing the stock at 36x December-2027E EPS, about 15 per cent below FMCG peers’ FY28E average.

 

The target implies a potential upside of 36 per cent from Tuesday, March 17, closing price of ₹486 on the NSE. Around 10:30 AM, shares of Patanjali Foods were trading at ₹489, up 0.5 per cent. In comparison, the benchmark NSE Nifty 50 was quoting at 23,721.50 levels, up by 140.35 points or 0.6 per cent. The company has a total market capitalisation of ₹53,242 crore. 

Here's why Systematix is bullish on Patanjali Foods:

Edible oil costs pass-through

According to analysts, during a recent visit to its Haridwar facility, Patanjali Foods (PFL) management expressed cautious optimism, noting that the ongoing West Asia conflict has not affected spot edible oil prices, which account for about 70 per cent of revenue, nor disrupted LPG, LNG, or PNG supplies. However, Chicago vegetable oil futures have risen, showing a high correlation with crude oil, which is up roughly 12 per cent Q-o-Q in Q4 2026. 

 

The company management expects edible oil and refined palm oil-based biscuit prices to trend higher. Cost inflation in edible oils is largely passed through; in H2 2025, following a sharp import-duty hike, PFL increased prices by over 20 per cent while maintaining stable volumes and margins around 4.5-5.5 per cent, the brokerage said in its note.

Rising FMCG input costs

According to Systematix, in Patanjali Foods’ FMCG segment, packaging costs have increased by 30 per cent (HDPE, LDPE, polypropylene), though packaging accounts for only roughly 8 per cent of FMCG sales. Costs of crude derivatives, such as linear alkyl benzene (LAB), a key input for detergents and soaps, have surged nearly 100 per cent, prompting the company to plan a price hike in detergents next month. Analysts believe that sustained high raw material and packaging costs could require a revision of earlier margin guidance, which targeted 8-10 per cent for foods (up from 7 per cent in 9M26) and 25 per cent for HPC.

Haridwar plant capacity & operations

The Haridwar manufacturing facility is spread across 350 acres with 28 units producing F&B and HPC products (excluding biscuits and edible oils), ayurvedic medicines, and packaging materials (mono-cartons, corrugated boxes). With an 80,000 MT/month production capacity, the plant runs at 70-75 per cent utilisation in peak season, contributing about 33 per cent of Patanjali’s overall sales. It employs roughly 20,000 people in-season and 12-13,000 off-season, with 60 per cent of the facility currently utilised, leaving sufficient scope for expansion as demand scales, the brokerage said.

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