“Supreme Court’s Shocking Decision Sends Patanjali Foods Stocks Plummeting – Investors Beware!

Shares of Patanjali Foods fell 4%; the business argues there’s no connection between the SC decision and Patanjali Ayurved’s marketing.

Share price of Patanjali Foods: Co-founded by yoga instructor Ramdev, Patanjali Foods (formerly known as Ruchi Soya) is a division of Patanjali Ayurved.

Patanjali Foods, a subsidiary of Patanjali Ayurved, experienced a 3.91% decline in its share price during Wednesday’s trading session, reaching a low of Rs 1,556.80.

This drop follows the Supreme Court’s decision to prohibit Patanjali Ayurveda from advertising its traditional Ayurvedic medicines as cures for certain diseases.

Founded by yoga teacher Ramdev, Patanjali Ayurveda faces ongoing legal challenges, notably from the Indian Medical Association (IMA), which accuses the company of disparaging conventional medicines.

Despite Patanjali Foods’ clarification in a BSE filing that the Supreme Court’s ruling doesn’t directly affect its operations, investors remain cautious.

Despite Patanjali Foods’ clarification in a BSE filing that the Supreme Court’s ruling doesn’t directly affect its operations, investors remain cautious. The company’s stock witnessed a significant decline of 10% following the court’s decision.

This decline reflects the apprehension among investors regarding the potential indirect impact of the ruling on Patanjali Foods’ business. Uncertainty surrounding the future regulatory environment and implications for the company’s operations have contributed to the cautious sentiment among investors.

Patanjali Foods will need to communicate clearly and effectively to address these concerns and restore confidence among its stakeholders.

The court’s directive stems from Patanjali Ayurved’s failure to uphold its commitment to refrain from making unsubstantiated medicinal claims in advertisements.

Although Patanjali Foods, previously known as Ruchi Soya, specializes in edible oils and food FMCG products and operates independently of Patanjali Ayurved, its stock performance has been impacted. Currently trading at Rs 1,556.80, down 10.58% from its one-year high of Rs 1,741, investors are advised to exercise caution.

Kiran Jani, Head of Technical Research at Jainam Broking, suggests maintaining a strict stop loss at Rs 1,500 for existing holdings, discouraging fresh investments at current market levels.

As of the December 2023 quarter, promoters hold a significant 73.82% stake in Patanjali Foods. It’s important to note that the information provided by Business Today serves informational purposes only and should not be construed as investment advice. Readers are encouraged to seek guidance from qualified financial advisors before making any investment decisions.

 

OVERVIEW

• In an ongoing legal battle with the Indian Medical Association (IMA), the highest court pronounced its ruling.
• According to a BSE filing by Patanjali Foods, the SC order has nothing to do with it.
• The shares of Patanjali Foods were down 9.58% from its peak price of Rs 1,741 a year earlier.

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