Patanjali Foods Limited (NSE: PATANJALI) has been one of the top-performing shares in 2023 so far, surging over 35% year-to-date.
After a strong breakout above the resistance zone of ₹1,500 in early December, analysts see further upside potential of 30% in the coming months.
Patanjali Foods Share Technical Analysis
On the weekly chart, Patanjali Foods breached the multiple resistance zone around ₹1,500 in the first week of December 2023 with a strong bullish candle. This signified the continuation of a medium-term uptrend.
The stock underwent a retest of the breakout, rebounding and thereby confirming the validity of the breakout. It also consolidated briefly between ₹1,500-1,200 before the breakout, indicating positive momentum building up.
The weekly strength indicator RSI is in a bullish mode and holding above its reference line, signaling positive bias.
Key Technical Aspects
- Breached crucial resistance zone of ₹1,500 in early December
- Retest of breakout successful with strong rebound
- RSI in bullish mode and above reference line
- Brief consolidation between ₹1,500-1,200 before breakout
Fundamental Analysis
Patanjali Foods is the new identity of Ruchi Soya after its acquisition by Baba Ramdev’s Patanjali Ayurved. It is involved in the manufacturing of edible oils under brands like Mahakosh and Ruchi Gold.
Some key fundamental aspects:
- Robust promoter holding of 73.82% by Patanjali Ayurved
- Healthy profit growth with TTM net profit at ₹255 crores
- Attractive valuation with TTM P/E ratio of 51.21x
- Strong buy rating from the only analyst covering the stock
- Bullish views from analysts expecting further upside
Bullish Analysts’ Recommendations
According to a research analyst:
“Patanjali Foods breached the multiple resistance zone around ₹1,500 in the first week of December 2023 with a strong bullish candle, signaling the continuation of a medium-term uptrend. With robust fundamentals and technical breakout, we expect the stock to rise towards ₹1,830-1,885 in 2023. We recommend a buy within ₹1,620-1,588 for a target of ₹1,830-1,885 with a stop loss at ₹1,490.”
The analyst highlights the technical breakout and expects further upside of 15-20% from current levels backed by strong fundamentals.
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Conclusion
With a combination of positive technical setup and strong fundamentals, analysts remain bullish on Patanjali Foods share in 2023. The key drivers they highlight include:
- Breakout from crucial resistance zone indicating uptrend continuation
- Favorable risk-reward ratio for fresh buying
- Robust promoter holding and financial growth
- Attractive valuation with P/E below sector average
Backed by these factors, analysts expect Patanjali Foods share to rise further by 30% in 2023 after the 35% surge year-to-date. Investors can look to buy the share on dips for healthy returns.