Every once in a while, a brokerage puts out a call that makes you stop scrolling. This is one of those.
The global brokerage house Jefferies has given a ‘Buy’ call to a fast-moving consumer goods (FMCG) stock and sees room for it to rally close to 60% from current levels. Not 10%. Not 20%. Nearly 60%.
Naturally, the first question that comes to mind is – which stock?
The answer is Patanjali Foods (PFL). Also, if you look at its latest Q1 numbers, Patanjali Foods posted revenue growth of 29% year-on-year (YoY), while earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 69% YoY.
Let’s take a look at why the brokerage house is bullish on this stock and what is the rationale behind it –
Jefferies on Patanjali Foods: Target price and valuation
Patanjali Foods trades at 23 times its estimated earnings for the next year. This is a common way analysts compare how “expensive” a stock is relative to its profits.
Jefferies expects PAT to grow at a compound annual growth rate (CAGR) of 23% between FY26-29. It also expects return on capital employed (ROCE) to improve by about 590 basis points to 18% over the same period.
Based on a sum-of-the-parts (SOTP) valuation method, Jefferies has set a price target of Rs 560, implying that 59% upside.
Patanjali Foods Q1 number
Patanjali Foods delivered a strong first quarter of FY27. Revenue grew 29% year-on-year, while EBITDA jumped 69%. Profit After Tax (PAT) surged 86% during the quarter.
The performance was largely driven by the edible oils business. Revenue came in at around Rs 11,300 crore, nearly 20% above Jefferies’ estimate.
Jefferies added, “PFL reported strong revenue performance with ~27% YoY growth (20% ahead of Jefferies estimates) to Rs 11,300 crore.”
Edible oils do the heavy lifting
The edible oils business had its best quarter ever, touching Rs 8,500 crore in revenue, up 27% YoY. Mustard oil sales stood out, and prices across the category rose amid the West Asia conflict and broader commodity inflation. Earnings before interest and tax (EBIT) for this segment nearly quintupled YoY.
The plantations business grew 25% YoY, and the company expanded its cultivated land to 116,000 hectares, up from 111,000 hectares in March 2026. Management is now guiding for 3-5% volume growth in the edible oils business for FY27.
Foods and FMCG: Growing, but under pressure
The Foods & FMCG segment grew revenue by 28% YoY. The biscuits business had its strongest quarter yet, at Rs 560 crore, up 27% YoY, with margins improving to 15.4%.
But profitability across this segment took a hit. This was because input costs rose faster than the company could pass them on through pricing. Jefferies’ report noted that profitability “was impacted due to input cost inflation and is expected to recover over the coming quarters.”
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.