Apex court restrains Patanjali Ayurved on advertisement & marketing

Patanjali Foods Ltd shares declined more than 5% on Wednesday, a day after the Supreme Court issued a contempt notice to Patanjali Ayurved and its Managing Director Acharya Balakrishna for flouting the apex court’s earlier orders.

On Tuesday, the Supreme Court restrained Patanjali Ayurveda from advertising and marketing the products meant to cure ailments and disorders until further orders.

In an exchange filing on Tuesday, February 27, Patanjali Foods announced that the latest observations of the SC that talked about the advertisements of ayurvedic medicines of Patanjali Ayurved Ltd, do not relate to Patanjali Foods, which is an independent listed entity and operates in the space of edible oil and food FMCG products only.

The observations do not have any bearing on the regular- business operations or the financial performance of Patanjali Foods Ltd, it said. Patanjali Ayurveda has a 32.37% stake in Patanjali Foods Ltd.

The Supreme Court reprimanded Patanjali Ayurveda for continuing to publish misleading claims and advertisements against modern medicine in November 2023. The apex court also restrained Patanjali Ayurveda from promoting products that claim to cure diseases such as heart ailments and asthma.

Shares of Patanjali Foods dropped as much as 5.4% to a low of ₹1,535 per share on NSE. The FMCG stock has fallen 1.3% on a year-to-date basis. However, shares of Patanjali Foods have gained nearly 20% in the last three months and almost 70% in the previous year.

The company’s net profit declined 19.56% on a year-on-year (YoY) basis to ₹216.54 crore in the quarter ended December 31, 2023, compared to ₹269.19 crore reported in the same period last year.