Patanjali Foods and Four Other Stocks Plummet Up to 15% – Here’s What Led to the Crash
Patanjali Foods : The Indian stock market witnessed a sharp sell-off on Friday, with several stocks, including Patanjali Foods, IREDA, Tata Technologies, Titagarh Rail, and IIFL Finance, tumbling by up to 15%. The broader market also faced volatility due to multiple factors, causing investor panic.
Stock Market Overview
The Nifty 50 Index opened lower at 22,433 and further declined to an intraday low of 22,220.5, reflecting a 1.4% drop in the morning session. The market downturn was driven by weak earnings from Indian banks, rising US bond yields, MSCI index rejig, and foreign institutional investors (FIIs) shifting their investments from India to China.
Patanjali Foods Faces a Sharp Decline
Patanjali Foods Ltd, a major player in the FMCG sector, experienced a steep 13.4% fall in early trade, hitting an intraday low of ₹1,570 per share. By 1:00 PM, the stock slightly recovered, trading at ₹1,640 per share, still down 9.6% from its previous closing price of ₹1,812.6.
Short-Term vs. Long-Term Returns
- 1-Month Return: -13%
- 6-Month Return: -17.43%
- 3-Year Return: +106%
- 5-Year Return: +2,517%
Despite short-term losses, the long-term returns remain strong, reflecting the company’s consistent growth.
Why Did Patanjali Foods Crash Over 13%?
The sharp decline in Patanjali Foods’ stock price was triggered by its inclusion in the Futures and Options (F&O) segment. When a stock enters the F&O segment, trading volumes increase significantly, often leading to higher volatility. On Thursday, 16 stocks exited the F&O segment, while Patanjali Foods was added at the beginning of the March series.
Other New F&O Entrants That Crashed
Several other newly added F&O stocks also witnessed sharp declines:
- IREDA: -8%
- Tata Technologies: -7%
- Titagarh Rail: -6%
- IIFL Finance: -4%
Recent Updates on Patanjali Foods
On February 19, 2025, Patanjali Foods clarified that the Income Tax Department’s ₹186 crore demand was quashed by the NCLT and later dismissed by the Bombay High Court. The Supreme Court also rejected the appeal, confirming that there was no financial impact on the company.
Financial Performance – Q3 FY25
Despite the stock decline, Patanjali Foods reported strong earnings in Q3 FY25:
| Financial Metric | Q3 FY25 | Q3 FY24 | YoY Growth |
|---|---|---|---|
| Revenue from Operations | ₹9,103.13 Cr | ₹7,910.70 Cr | +15.07% |
| Operating Profit (EBITDA) | ₹581.24 Cr | ₹390.63 Cr | +49% |
| Profit After Tax (PAT) | ₹370.93 Cr | ₹216.54 Cr | +71.3% |
| Export Sales | ₹67.27 Cr | – | – |
The company also expanded its export footprint across 29 countries during the quarter.
About Patanjali Foods Ltd
Patanjali Foods is a leading FMCG company specializing in edible oils, food & FMCG, and nutraceuticals. It operates popular brands like Nutrela, Mahakosh, and Patanjali, with a strong market presence in India and internationally.
Key Financial Ratios of Patanjali Foods
| Metric | Value |
|---|---|
| Market Cap | ₹63,731 Cr |
| Current Price | ₹1,761 |
| 52-Week High / Low | ₹2,030 / ₹1,170 |
| Stock P/E | 55.5 |
| Book Value | ₹299 |
| Dividend Yield | 0.45% |
| ROCE (Return on Capital Employed) | 11.1% |
| ROE (Return on Equity) | 7.63% |
| Face Value | ₹2.00 |
| Promoter Holding | 69.5% |
| P/E to Book Value | 5.88 |
| Debt to Equity | 0.10 |
| Industry P/E | 22.4 |
| Graham Number | ₹462 |
| Intrinsic Value | ₹718 |
| RSI (Relative Strength Index) | 38.5 |
| Earnings Per Share (EPS) | ₹31.7 |
| PEG Ratio | 0.95 |
| 200-Day Moving Average | ₹1,733 |
| 3-Year Free Cash Flow | ₹1,906 Cr |
| 5-Year Free Cash Flow | ₹2,047 Cr |
| Debt | ₹1,117 Cr |
Market Outlook – Should Investors Be Concerned?
The stock’s sharp decline was mainly due to technical factors related to its F&O inclusion, rather than weak financial performance. Patanjali Foods has strong fundamentals, impressive long-term growth, and a diversified product portfolio, making it an attractive bet for long-term investors.
However, short-term volatility may continue, and investors should monitor market trends and global economic factors before making investment decisions.
Conclusion
The stock market crash on Friday was fueled by a combination of weak earnings, rising US bond yields, and F&O-related volatility. While Patanjali Foods and other stocks suffered significant intraday losses, long-term fundamentals remain strong. Investors should stay cautious in the short term but look at the bigger picture before making hasty investment decisions.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.