Patanjali Foods’ stock price falls over 4% after Supreme Court issues contempt notice.

Shares of FMCG company Patanjali Foods dropped by 4.13% to ₹1,555 each in today’s early trade, following a contempt notice issued by the Supreme Court to Ramdev-owned Patanjali Ayurved and its managing director, Acharya Balakrishna on Tuesday.

Patanjali Foods, an FMCG company, saw a 4.13% drop in its shares, trading at ₹1,555 each this morning. This decline followed the Supreme Court’s issuance of a contempt notice to Patanjali Ayurved and its managing director, Acharya Balakrishna. The notice was served due to their failure to uphold their commitment of refraining from making “misleading claims” in advertisements for their medicines.

The apex court has prohibited Patanjali from endorsing products purported to cure conditions like heart ailments and asthma. This decision followed the Indian Medical Association (IMA) providing evidence in court, citing a Patanjali ad in The Hindu newspaper and a press event where the company asserted complete cures for diabetes and asthma through yoga.

The court found Patanjali in violation of the previous court order, which prohibited Patanjali from issuing misleading advertisements and making misleading claims.

On the same day, Patanjali Foods clarified in a regulatory filing that the remarks made by the Supreme Court of India do not pertain to Patanjali Foods Limited. The company emphasized its status as an independent listed entity operating solely in the edible oil and food FMCG products sector.

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In the third quarter of the fiscal year 2023–24 (Q3FY24), Patanjali recorded a revenue of ₹7,910.7 crore from its operations, showing a slight uptick of 1.1% from the preceding quarter. The total income, encompassing various revenue sources, stood at ₹7,957.3 crore.

The company attained an EBITDA of ₹390.6 crore, with an EBITDA margin of 4.9%. This marks a decrease from 5.3% in the previous quarter (Q2FY24) and 5.1% in the corresponding quarter of the prior year.

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The net profit for the quarter was ₹216.5 crore, down from ₹254.5 crore in the same period last fiscal year.

Moreover, the company disclosed export sales amounting to ₹62.1 crore for the quarter, contributing to a total export revenue of ₹266.2 crore for the nine-month period concluding in the third quarter of the fiscal year 2023–24.