Yoga guru, Baba Ramdev’s Patanjali range of products is riding on the increasing consumer acceptance and shift towards ayurvedic and natural products.
A report by Religare Capital Markets, prepared after interaction with Patanjali Ayurved’s Managing Director, Acharya Balkrishna, has interesting facts about the company and its future plans. We list out some of the highlights.
– Patanjali clocked revenues of Rs 4,500-5,000 crore in FY16 (ghee sales being Rs 700 crore, toothpaste Rs 300 crore and herbal cosmetics Rs 250 crore) and plans to grow at 100-125 per cent annually for the next three years. The company may explore international markets if growth in the domestic market becomes saturated.
– New products launched in FY16 are gaining traction and the company plans to roll out an extensive range of baby care products, premium herbal cosmetics, guava drinks and dairy products such as WMP (Whole Milk Powder) in the near term. In-house manufacturing capacity of honey, which was launched about six months ago, has been ramped up to 65 tonnes/day and the company plans to increase this to 100t/day. No Patanjali product has ever been withdrawn from the market thus far.
– Patanjali sources its raw material directly from farmers and a few vendors, and believes raw material availability could fall short in the medium term, given the shortage in cultivation of herbal ingredients. Currently, 90 per cent of its products are manufactured in-house and management intends to maintain these levels in order to ensure product quality (outsourcing is only to exclusive manufacturers).
– Distribution is through 80 super stockists and 2,000-3,000 distributors. The company also has 1,200 Chikitsalyas (treatment centres) and 7,000 Arogya and Swadeshi Kendras, which it plans to double in FY17. Patanjali also plans to ramp up its presence on the modern trade and e-commerce platforms to drive consumption.
– Product pricing is on a Cost+Profit basis and is irrespective of competitor prices.
– As per Acharya, if supplied with high quality products, India’s personal care market has higher growth potential as compared to the food market given higher penetration of personal care products in rural India.
– Patanjali requires an investment of Rs 1,000 crore in the near term to expand and modernise its facilities which will largely be debt funded.
A report by Religare Capital Markets, prepared after interaction with Patanjali Ayurved’s Managing Director, Acharya Balkrishna, has interesting facts about the company and its future plans. We list out some of the highlights.
– Patanjali clocked revenues of Rs 4,500-5,000 crore in FY16 (ghee sales being Rs 700 crore, toothpaste Rs 300 crore and herbal cosmetics Rs 250 crore) and plans to grow at 100-125 per cent annually for the next three years. The company may explore international markets if growth in the domestic market becomes saturated.
– New products launched in FY16 are gaining traction and the company plans to roll out an extensive range of baby care products, premium herbal cosmetics, guava drinks and dairy products such as WMP (Whole Milk Powder) in the near term. In-house manufacturing capacity of honey, which was launched about six months ago, has been ramped up to 65 tonnes/day and the company plans to increase this to 100t/day. No Patanjali product has ever been withdrawn from the market thus far.
– Patanjali sources its raw material directly from farmers and a few vendors, and believes raw material availability could fall short in the medium term, given the shortage in cultivation of herbal ingredients. Currently, 90 per cent of its products are manufactured in-house and management intends to maintain these levels in order to ensure product quality (outsourcing is only to exclusive manufacturers).
– Distribution is through 80 super stockists and 2,000-3,000 distributors. The company also has 1,200 Chikitsalyas (treatment centres) and 7,000 Arogya and Swadeshi Kendras, which it plans to double in FY17. Patanjali also plans to ramp up its presence on the modern trade and e-commerce platforms to drive consumption.
– Product pricing is on a Cost+Profit basis and is irrespective of competitor prices.
– As per Acharya, if supplied with high quality products, India’s personal care market has higher growth potential as compared to the food market given higher penetration of personal care products in rural India.
– Patanjali requires an investment of Rs 1,000 crore in the near term to expand and modernise its facilities which will largely be debt funded.
Resource :http://www.financialexpress.com/article/industry/companies/patanjali-may-go-global-needs-rs-1000-cr-investments-for-expansion/236046/
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