Ramdev's Patanjali Shakes up FMCG Order; Next up 'Nutritious Restaurants'

Posts Rs 10,216 crore in sales in FY17 to become largest after ITC, HUL

 

Growing at a rapid pace, Baba Ramdev’s Patanjali group has become the third-largest fast-moving consumer goods (FMCG) player in the country, surpassing firms like Nestlé, Godrej Consumer, Britannia, and Dabur. 

The ayurveda major posted Rs 10,216 crore in FMCG and ayurveda sales during 2016-17, a jump of over 100 per cent from Rs 5,000 crore the previous year, the group announced on Thursday. While most of FMCG companies, including ITC and Hindustan Unilever, are yet to announce their results for the January-March 2017 quarter, Patanjali is behind ITC and Hindustan Unilever’s trailing 12-month revenue in the January-December 2016 period of Rs 38,293 crore and Rs 30,783 crore, respectively. 

Patanjali is ahead of Nestlé India (Rs 9,159 crore) and Godrej Consumer (Rs 9,134 crore), when compared to their January-December 2016 revenue. Analysts expect Nestlé and Godrej to post 10-15 per cent growth in Q4, which will keep Patanjali at third place based on its 2016-17 revenue.  Patanjali is now aiming at a two-fold increase in sales to Rs 20,000 crore and doubling its retail network to 12,000 outlets by March 2018.

Founded in 2006 by Ramdev and his close aide Acharya Bal Krishna, Patanjali Ayurved has grown exponentially in the past five years. While the growth rate for most FMCG companies in the country ranged between eight and 12 per cent during this period, Patanjali’s revenue multiplied by over 20 times – from Rs 453.4 crore in 2011-12 to Rs 9,346 crore in 2016-17. Its revenue continued to grow in triple digits even during the past two years, when all its peers witnessed muted growth owing to general slowdown. 

The Patantaji group’s total sales touched Rs 10,561 crore during 2016-17, with its FMCG business, Patanjali Ayurved, posting revenue of Rs 9,346 crore; the ayurvedic and herbal medicines business, Divya Yog Pharmacy, contributing Rs 870 crore; and Patanjali Gramodyog Nyas, a trust that works in the fields of animal husbandry and economic and social uplift of villagers, generating Rs 345 crore. 

The group, however, refrained from revealing profits, and only said its profits had grown 100 per cent since 2015-16. 

Business Standard excluded Patanjali Gramodyog Nyas while comparing the FMCG companies’ ranking by revenue. 

* Patanjali's combined revenue in FMCG and ayurvedic/herbal medicine businesses; Figures of Emami, Dabur & Marico TTM are for March 2017 quarter, rest are for Dec 2016 quarter; The list excludes Milk co-operative GCCMF (Amul). Source: Capitaline

Patanjali cow ghee (clarified butter) remained the most-sold product, generating Rs 1,467 crore. Its Dant Kanti toothpaste raked in Rs 940 crore, followed by Kesh Kanti shampoo (Rs 825 crore), herbal bathing soap (Rs 574 crore), and Kachhi Ghani mustard oil (Rs 522 crore). Patanjali biscuits, honey, and washing powders and soaps did well by posting Rs 380 crore, Rs 335 crore and Rs 325 crore in sales, respectively. Among its branded commodities business, Patanjali Atta remained second only to mustard oil with sales at Rs 407 crore. 

Currently, Patanjali holds a 15 per cent share in the domestic shampoo market. Its market share in toothpaste and honey businesses is about 14 per cent and 50 per cent, according to Ramdev.  The firm had ventured into the personal beauty and cosmetics market early last year with its Saundarya brand, which contributed Rs 231 crore to its top line, while its facewash business grabbed a 35 per cent market share with sales worth Rs 228 crore. Its skin care business clocked Rs 231 crore.

To meet its stated target for the current year, Patanjali will be investing Rs 5,000 crore in five new food parks in Madhya Pradesh, Maharashtra, Andhra Pradesh, Assam, and Uttar Pradesh. The unit at MP will be dedicated for products to be exported to the US, the UK, and Canada, besides neighboring countries like China. Patanjali, which currently employs 100,000 people, will take that number to 500,000 in the next one year, Ramdev said. 

To challenge multinational restaurant chains like McDonald’s, KFC and Subway, Patanjali will soon venture into the business. “We are working on the business plan and branding. So, don’t be surprised if you find one day that Patanjali restaurants are serving nutritious and safe food in your neighbourhood. We will venture into segment very soon,” said Ramdev.  

Taking a dig at other FMCG companies, Ramdev said his fight against economic colonisation of the domestic market would continue. 

“Unlike Unilever, MHC, P&G, and Colgate, Patanjali spends its whole profit on education, research, cow promotion, and protection, and will continue doing so. Patanjali is an organisation owned by 125 crores (1.25 billion) Indians. So, I seek their cooperation in our mission,” he said.

 

Reference - http://www.business-standard.com/article/companies/ramdev-s-patanjali-shakes-up-fmcg-order-next-up-nutritious-restaurants-117050400652_1.html