Patanjali Foods’ margin slips as tax benefit masks 48.60% PBT fall
Costs outpaced revenue year on year, while a -122.35% tax rate lifted net profit despite weaker operating and pre-tax profit.
Filed 30 May 2026, 18:32 IST · after market close · Patanjali Foods Ltd (PATANJALI)
Key takeaways
- Consolidated operating margin fell 1.34 percentage points year on year to 3.99% as expenses grew 16.72%, faster than revenue at 15.10%.
- Net profit rose 46.15% to Rs 523.98 cr despite a 48.60% fall in pre-tax profit, helped by a -122.35% tax rate.
- The stock fell 7.95% over five sessions after the results, well beyond its 1.44% median absolute move after the past eight results.
Price around the results
Revenue grew, but operating profit declined
Consolidated revenue grew 15.10% year on year and 6.41% sequentially, but operating profit fell 13.75% from Q4FY25 as expenses rose faster than sales. Sequentially, revenue increased 6.41% while expenses rose 6.58%, leaving operating profit up only 2.53%. The company reported Rs 445.35 cr of operating profit on revenue of Rs 11,155.6 cr.
Margin pressure was compounded by a tax-led profit distortion
Operating margin narrowed 1.34 percentage points year on year and 0.15 percentage points sequentially, marking a second consecutive quarterly decline from 5.63% in Q2FY26 to 4.14% and then 3.99%. Interest expense rose 42.83% year on year, while other income was negative and equal to -47.63% of pre-tax profit. The tax line was a benefit of Rs 288.32 cr, producing a -122.35% tax rate and lifting reported net profit above pre-tax profit.
Patanjali remained near the bottom of its reported peer group
Patanjali Foods’ 3.99% operating margin was 12.76 percentage points below the 16.75% median for the 26 Fast Moving Consumer Goods peers that had reported the quarter. It ranked second from the bottom on this measure. Year on year, pre-tax profit fell 48.60% and EPS fell 51.36%, even as net profit rose because of the tax benefit.
The post-result decline was unusually large over five sessions
The stock fell 1.52% on the first trading day after the results and 7.95% over five sessions, with the five-day move lagging the market by 6.14 percentage points. Across the past eight results, the stock rose four times and fell four times, with a median absolute move of 1.44%. The near-term reaction was therefore ordinary on day one but unusually negative over five sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹11,156 cr | ₹10,484 cr | +6.41% | +15.10% |
| Other income | ₹-112 cr | ₹27 cr | — | — |
| Expenses | ₹10,710 cr | ₹10,049 cr | +6.58% | +16.72% |
| Operating profit | ₹445 cr | ₹434 cr | +2.53% | -13.75% |
| Operating margin (%) | 3.99% | 4.14% | — | — |
| Interest | ₹36 cr | ₹35 cr | +1.87% | +42.83% |
| Depreciation | ₹62 cr | ₹62 cr | -0.85% | -27.79% |
| Profit before tax | ₹236 cr | ₹364 cr | -35.30% | -48.60% |
| Tax | ₹-288 cr | ₹-229 cr | -25.79% | — |
| Net profit | ₹524 cr | ₹593 cr | -11.70% | +46.15% |
| EPS (₹) | ₹4.82 | ₹5.46 | -11.72% | -51.36% |
Operating margin of 3.99% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.52% | -0.82% |
| Next session | -1.02% | — |
| 5 sessions | -7.95% | -6.14% |
| 15 sessions | -8.32% | — |
| 30 sessions | -10.66% | — |
Volume on the results session was 1.51× its 20-day average.
What to watch
- Whether operating margin recovers from 3.99% after two consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue after the year-on-year gap of 16.72% versus 15.10%.
- Whether the tax rate moves away from the -122.35% level that materially lifted reported net profit.