Patanjali Foods Q2 FY27 Earnings Call: Record H1 Revenue At Rs. 22,660 Cr, Edible Oil Duty Cut Absorbed

Record H1 Revenue, But Q2 Margins Compress

• Q2 FY27 revenue of Rs.11,323 crore, up 16% YoY — operating EBITDA of Rs.426 crore (3.76% margin) and PBT of Rs.449 crore (3.59% margin).
• H1 FY27 revenue was the company's highest ever at Rs.22,660 crore, up 22% YoY — operating EBITDA of Rs.969 crore (4.28% margin) and PBT of Rs.862 crore (3.79% margin).
• Festive calendar shifted later in FY 2026-2027 — MD Sanjeev Asthana said pre-festive demand moved from Q2 into Q3 FY27; urban demand described as relatively resilient, rural demand as "relatively muted."
• Macro headwinds intensified — CPI inflation rose from ~4.45% in July to 6.09% in October (highest under the new series), food inflation at 8.94%, and the monsoon ended with a 13% rainfall deficit, the weakest since 2015.
• RBI analysis cited — management referenced RBI analysis showing non-farm rural activity growing at close to 6%.
• Commodity inflation flagged as persistent — wheat, sugar, milk, soybean and crude-linked imports plus freight costs to continue in the near term; management managing via sourcing, mix and calibrated pricing.

Duty Cut Absorbed in Q2; Record Segment Revenue at Thinner Margin

• Government cut effective import duty on crude palm and crude soybean oil from 16.5% to 11% — and on crude sunflower oil from 16.5% to 5.5%, effective 24 September; the company said it will pass the benefit to consumers.
• 100% of the duty-cut impact was accounted for in Q2 FY27 — no inventory loss spilling into the next quarter; impact was marginal as much of the long-only position was afloat or in bonded warehouses as non-duty-paid stock.
• Edible oil EBITDA margin fell from 5.22% in Q1 FY27 to 3% in Q2 FY27 — EBITDA dropped from Rs.444 crore to Rs.256 crore, partly attributed to the duty change's immediate impact on domestic prices.
• Record edible oil segment revenue of Rs.8,532 crore in Q2 FY27, up 22% YoY — H1 FY27 segment revenue of Rs.17,037 crore, up 25%, at a 4.11% margin.
• H1 FY27 edible oil volumes of 10.39 lakh tons vs 9.4 lakh tons in H1 FY26 — a 10.5% volume increase (~99,000 tons); Q2 FY27 volumes of 5 lakh tons vs 5.39 lakh tons in Q1 FY27 and 4.82 lakh tons in Q2 FY26.
• Government also standardized edible oil pack sizes with a 3-month transition period — management said the financial impact is none as packaging inventory was fully used up; industry anticipates demand may rise with smaller standardized packs, though the actual impact is still to be seen.
• Oil palm plantation revenue of Rs.742 crore in Q2 FY27 — cultivated area at 1,27,000 hectares against 6.63 lakh hectares allocated, with ~34% in prime yielding phase, 8% young and 57% immature (up to 3 years).

Biscuits and Skincare Strong; Staples Deliberately Shrunk

• FMCG Q2 FY27 revenue of Rs.2,923 crore — 26% of revenue and 45% of EBITDA excluding unallocable income, at a 7.57% EBITDA margin; H1 FY27 FMCG revenue of Rs.5,861 crore, up 15%, at a 7.01% margin.
• Record biscuits revenue of Rs.638 crore in Q2 FY27, up 28% YoY — at an 11.91% EBITDA margin; volumes rose from 49,000 tons in Q1 FY27 to 54,833 tons in Q2 FY27, cited as 9.91% volume growth with no price increase taken.
• Skincare revenue rose from Rs.165 crore in Q1 FY27 to Rs.187 crore in Q2 FY27 — 13.76% sequential and ~25% YoY, largely volume-led, with one category taking a price increase amid competitive pressure.
• Staples revenue deliberately reduced from Rs.1,110 crore in Q1 FY27 to Rs.838 crore in Q2 FY27 — the company chose not to push volumes at any cost given commodity inflation and limited ability to pass on prices; staples EBITDA improved from a loss of Rs.59 crore to Rs.15.61 crore (1.86% margin).
• Ethnic foods revenue up ~14% from Rs.460 crore in Q1 FY27 to Rs.525 crore in Q2 FY27 — EBITDA margin up from 1.89% to 3.19% (Rs.16.78 crore); Asthana described this as unsatisfactory.
• Total foods EBITDA of Rs.32 crore in Q2 FY27, a 2.37% margin — management's target for the overall food margin is 8 to 10% (period unspecified).
• HPC (non-food) Q2 FY27 EBITDA of Rs.122 crore on revenue of Rs.713 crore — a 17.11% margin; home and personal care revenue of Rs.714 crore, up 11% YoY.

Dant Kanti Holds Ground in an Intensifying Category

• Competitive intensity in dental care has increased — Asthana said the category leader and other players are stepping up new launches, pricing and variants.
• Dant Kanti revenue of Rs.378 crore in Q2 FY27, up ~16% QoQ from Rs.325 crore in Q1 FY27 — YoY growth versus Q2 FY26 of about 5.5% plus; extension into toothbrushes and new variants is helping it stay competitive.
• Herbal toothpaste is about one-third of the overall toothpaste market — Ashutosh (ICICI Securities) cited ~32-33%; Asthana said the company's growth was nearly 16% versus Q1, with the segment expected to grow 10 to 12%.
• Segment consolidating around 2 or 3 players — Asthana noted the largest player exited the segment about a year and a half ago, making it more competitive while the overall market continues to expand.
• No acquisitions currently on the cards — the company is evaluating acquisitions selectively for distribution or portfolio strengthening, but sellers' price expectations have exceeded the opportunity value; internally focused for about 2 years since the last HP acquisition from the parent.

Rs.185 Crore Lease Payment to Parent; Refund Tailwind Ends

• Rs.185 crore paid for transfer of MP land lease rights from Patanjali Airways Limited (the parent) — questioned by Systematix analyst Abhishek Mathur against Rs.800 crore of cash and equivalents on the books.
• Indore plant is being shifted because its land has become urban and residential — CFO Kumar Rajesh said this could draw Pollution Control Board notices; the parent had originally taken the 42.5-acre land from MPSIDC, and the lease rental is "very minimal."
• Treasury income impact will be limited compared with the lease rental — per CFO Kumar Rajesh.
• Q2 FY27 included the final instalment of a tax refund relating to carried-forward losses from the pre-CIRP period — CFO Kumar Rajesh said no further refunds of past-period taxes are expected; only nominal refunds may be received in the course of operations, not expected to be major.

H2 FY27 Expected Better; Food Margin Recovery Hoped Next Quarter

• H2 FY27 expected better than H1 — Asthana said festive season gained momentum in October and November FY27 to date, a positive lead for the wedding season and winter demand in H2 FY27.
• HPC expected to grow about 15% in FY 2026-2027 — with the second half better than the first half as demand typically picks up.
• Food margins hoped to start improving in the quarter after the current one — citing recent price increases and early volume pickup in ethnic foods.
• October 2026 demand was quite positive but largely festival-led — management hoped there would be no volume impact from pack standardization, with any impact expected to be positive.
• Biscuit growth typically 8 to 10%, largely volume-led — demand driven by latent demand and deeper reach, with direct reach of upwards of 3 lakh outlets and indirect distribution estimated at about 1.5 times that; skincare and HPC growth also expected to be largely volume-led.