Ruchi Soya Q4 results: Net profit drops 25% to ₹234 crore

Net profit of Ruchi Soya Industries fell 25% year-on-year to ₹234.43 crore in the fourth quarter compared with ₹314.33 crore in the corresponding quarter last year.

The Patanjali-owned company's revenue from operations rose 37.72% year-on-year to ₹6,663.72 crore in Q4 compared with ₹4,838.5 crore in the year-ago period, it says in an exchange filing.

The quarterly results announcement comes days after Ruchi Soya acquired the entire food retail business of Baba Ramdev-led Patanjali on a slump sale basis for ₹690 crore. Post the acquisition, which is expected to be completed by July 15, the name of Ruchi Soya will be changed to Patanjali Foods.

The company's EBITDA or earnings before interest, taxes, depreciation, and amortisation stood at ₹418.44 crore with an EBITDA margin of 6.27%.

"The company continues to sustain its EBITDA margins in spite of rising inflation levels, macro challenges, as well as the need to manage costs aggressively to maintain margins in a healthy range," it says.

The Patanjali group company also approved its maiden dividend of ₹5 per equity share for FY22. The 250% dividend is the highest among peers, it claims.

Ruchi Soya says its branded business including brands sold under royalty arrangements and institutional segment (bakery and vanaspati) achieved sales of ₹4,848.87 crore in the quarter ended March, accounting for 72.12% of its total sales. The foods product segment registered a 15% increase in sales over the previous quarter, it adds.

Ruchi Soya was acquired by Patanjali in a ₹4,350-crore deal in December 2019. The company raised ₹4,300 crore from its follow-on public offer (FPO) in April this year. An FPO is when a firm issues additional shares after an initial public offering. The funds raised via FPO were used for the repayment of debt, making the edible oil producer debt-free.

Ruchi Soya announced its plan to rename itself Patanjali Foods in April 2022 as it looks to enhance synergies between the two companies.

The food business acquired by Ruchi Soya includes manufacturing, packaging, labelling and retail trading of certain food products, along with manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra. Patanjali's food business comprises 21 major products, including ghee, honey, spices, juices and atta.

As per the deal, the transaction will consist of the transfer of employees, assets (excluding Patanjali's brand, trademarks, designs and copyrights), and current assets (excluding debtors, vehicles, cash and bank balance), contracts, licenses and permits, distribution network, and customers.

Ruchi Soya MD Ram Bharat is also a director of Patanjali, while Balkrishna, one of its promoters and chairman, holds 98.5% of the paid-up equity share capital of Patanjali. It is one of the largest palm plantation companies in India with over 56,000 hectares under palm oil cultivation across nine states.