The founder of Patanjali Ayurved, which has been struggling to break the slowdown jinx since FY18, believes that all is well at the Haridwar-based FMCG major.
“We are not struggling. All our 8-10 leading brands across businesses are doing well,” founder Baba Ramdev tells Fortune India in an exclusive interview.
But the numbers tell a different story. In FY21, Patanjali Ayurved, the unlisted entity, saw a mere 8% rise in its turnover to ₹9,784 crore, a growth rate similarly to FY20. However, profitability growth was better at 14% at ₹425 crore for the fiscal. While the pandemic would have impacted sales, Ramdev thinks otherwise.
Denying that any of Patanjali’s brands were ceding ground to rivals, Ramdev says, “In the oral care category, our flagship brand, Dant Kanti, is doing well. In fact, our market share is 1.5 times higher than what the so-called market research specialists claim we have,” quips Ramdev. He argues that the research agencies were not including data from Patanjali’s self-owned 5,000 stores, which account for 40% of its sales turnover.
“In the toothpaste segment, we are either ahead or neck and neck with Colgate across 10 states. We are planning to aggressively ramp up our sales and marketing initiatives. Our objective is to be ahead of Colgate and all our efforts are aimed at increasing market share,” he says.
Today, Dant Kanti has emerged as a powerhouse ₹1,200 crore brand for the swadeshi major as it makes inroads into the ₹10,000 crore toothpaste market. As per industry reports, the naturals segment, comprising ayurvedic and herbal variants, now account for 25-30% of the market from less than 5% some years back.
FMCG is the fourth largest sector in the Indian economy with household and personal care making up for 50% share, hair care constituting 23% and food and beverages 19%.
In the hair care category, according to Ramdev, Kesh Kanti brand has been growing faster following the launch of a new advanced hair oil variant. “Our premium Aloe Vera brand is also growing. Competitors right from Hindustan Unilever, Emami and others have tried their best but we have 80% share in that category,” says Ramdev.
Within the foods segment, Patanjali is still riding high on the sales of cow ghee, accounting for 70% of the organised market. In the case of honey, Patanjali claims to have a market share equal to that of Dabur, even as Ramdev mentions that the chyawanprash brand had shown 1.5x growth in sales. “Around 80% of our profits come from these categories,” he reveals.
Denying that the group was facing growth pangs, Ramdev points out that these were allegations made by its rivals. “Just like in politics where opposition makes charges, so is the case in business,” Ramdev remarks.
Patanjali, which completed acquisition of Ruchi Soya in a ₹4,350-crore deal in December 2019, has managed to grow the business to ₹16,318 crore in FY21. In doing so, Patanjali’s group turnover now stands at over ₹30,000 crore.
The group is aiming to make its companies debt-free in the coming three-four years, with a substantial portion (62%) of Ruchi Soya’s proceeds from the ₹4,300 crore follow-on public offer to be used to partly retire the company’s debt of ₹3,330 crore.
“Over the past 1.5 years our entire focus was on Ruchi Soya but now we are equally focusing on Patanjali Ayurved as well. Creating such a huge entity is no mean task and one needs to sweat enough to clock that kind of a turnover,” Ramdev says.
For now, Patanjali has set its sights on hitting the Rs 50,000 crore mark. “We have the ability, efficiency, and brand loyalty to achieve that as the market itself is so big…Patanjali going down is something that we would not like to hear,” sums up Ramdev.