Shares of Patanjali Foods, formerly known as Ruchi Soya, are likely to be in focus on Friday, January 24, after the company revealed that the Food Safety and Standards Authority of India (FSSAI) has directed it to recall a specific batch of packed red chili powder. The batch, identified as Batch No. AJD2400012, was found to be non-compliant with food safety regulations. The FSSAI issued this order on January 13, 2024, and Patanjali Foods confirmed it in a regulatory filing. The recall pertains to concerns over the food product’s conformance with the Food Safety and Standards (Contaminants, Toxins, and Residues) Regulations, 2011.
The company, which is a major player in India’s FMCG sector and part of the Baba Ramdev-led Patanjali Ayurved group, has a diverse product range across edible oils, food FMCG, and wind power generation. Patanjali Foods, known for brands such as Patanjali, Nutrela, and Ruchi Gold, recently posted a solid financial performance, with a 21% increase in standalone net profit for the September quarter. The company’s net profit stood at ₹308.97 crore, up from ₹254.53 crore last year. Despite the recall issue, Patanjali Foods’ stock has been performing well, with shares rallying nearly 16%, reaching ₹1,839.80 apiece on the NSE.
In another development, Patanjali Foods is expanding its operations and plans to set up an oil palm mill in Mizoram, which is expected to be completed in a year. While the recall may cause some short-term volatility in the stock price, the company’s strong growth in both profit and market share suggests that it remains a key player in the FMCG sector. Investors will be keeping an eye on how this recall impacts the company’s reputation and bottom line in the coming months.
