Discover the latest controversy surrounding Patanjali Foods as the Supreme Court issues a damning contempt notice over misleading advertisements. Uncover the dramatic impact on stock prices and get exclusive insights into the fallout from this shocking legal battle!
Patanjali Foods Faces Setback in Stock Market Amid Controversy
Patanjali Foods, a prominent FMCG company, saw a decline of 4.13% in its share value to ₹1,555 per share during early trading today. This drop followed a recent development where the Supreme Court issued a contempt notice to Patanjali Ayurved, owned by Ramdev, and its managing director Acharya Balakrishna. The court took this action due to alleged breaches of promises regarding misleading claims in advertisements for its medicines.
Must Read
Secret Luxury Cars and $533 Million: The Byju’s Scandal Unveiled!
Supreme Court Ruling and Restrictions
The Apex Court’s ruling included a prohibition on Patanjali from advertising products claiming to cure specific diseases such as heart ailments and asthma. This decision came after the Indian Medical Association (IMA) presented evidence, including instances where Patanjali allegedly made misleading claims in advertisements and press conferences.
The court found Patanjali in violation of a previous court order that specifically prohibited the company from issuing misleading advertisements and making false claims. Despite this order, the evidence presented by the IMA suggested otherwise, leading to the contempt notice.
Patanjali Foods responded to the situation through a regulatory filing, clarifying that the Supreme Court’s observations did not pertain to them. They emphasized being an independent listed entity operating solely in the edible oil and food FMCG products sector.
Financial Performance Overview
In the third quarter of the fiscal year 2023–24 (Q3FY24), Patanjali reported a marginal growth of 1.1% in revenue from operations, amounting to ₹7,910.7 crore. The total income, including other sources, reached ₹7,957.3 crore. However, the company’s EBITDA and EBITDA margin saw a decline, standing at ₹390.6 crore and 4.9% respectively, down from the previous quarter and the same quarter of the previous year.
The quarterly profit after tax (PAT) for Patanjali stood at ₹216.5 crore, a decrease from the third quarter of the previous fiscal year. Additionally, the company reported export sales of ₹62.1 crore for the quarter, contributing to total export revenue of ₹266.2 crore for the nine months ending in the third quarter of FY23–24.
Patanjali Foods faced a setback in the stock market following the Supreme Court’s actions, highlighting challenges related to compliance and reputation management. Despite this, the company continues to operate independently in its core sectors, emphasizing its focus on edible oil and food FMCG products.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and Patanjali Foods/PTI have contributed to the above report
Also Read