Patanjali aims to overtake HUL next year; no plans for IPO

17 Jan 2018


New FMCG entrant Patanjali Ayurved said on Tuesday it will overtake India's biggest consumer goods company Hindustan Unilever Ltd by next year. HUL has been present in India for more than 80 years.

The Baba Ramdev-founded Patanjali's sales in FY17 totalled Rs10,561 crore, a third that of the listed HUL, which reported sales of Rs34,487 crore. But the ayurvedic medicines-to-consumer goods company has seen sales shoot up more than 20 times from Rs453 crore in FY12.

Addressing a press conference to announce the company's online foray on Tuesday, Ramdev said, "We believe our partnerships with e-commerce players will help take Patanjali products to more consumers in urban and rural regions in a convenient and efficient manner. We are targeting revenues of Rs10 billion annually through online sales.

"We have created capacity of Rs50,000 crore and we are racing ahead now. Our target is to beat HUL by next year."

The company's surge over the past few years has forced almost every large consumer goods maker to venture further into the ayurvedic products space.

Patanjali, however, is not considering a listing.

"We don't want to come under pressure of declaring our financials quarterly. We do not have the valuations game in mind," Ramdev said, adding that he cannot disclose numbers before the March financial year end.

Ramdev also said Patanjali will be converted into a 'non-profitable' company, which would plough back its profit to the society.

Ramdev said Patanjali crossed Rs10 crore in online sales in December, and is targeting more than Rs1,000 crore this year itself from ecommerce. "We began a trial of online sales and did the highest online sales by any FMCG (fast-moving consumer goods) brand in a month," he said.

Patanjali products will be sold at maximum retail price (MRP) online, he said, implying there would be no discounts.

Ramdev said he expected finance minister Arun Jaitley to announce a budget "helpful to consumers, farmers, armed forces and citizens of the country" on 1 February.

He's hopeful that goods and services tax (GST) rates on ayurvedic products will be lowered. Such items were "natural and good for consumers", he said. GST on products derived from cows such as cow ghee and fertilisers went up from 5 per cent to 12 per cent under the goods and services tax regime, which was rolled out on 1 July last year. All ayurveda medicines were included in the 12 per cent tax bracket, up from 5 per cent.

The apparel business is expected to be launched early next year with a range of denim, men's and women's wear and sports apparel, but Ramdev said plans for setting up restaurants as announced last year are "on hold for now".

He also said he was against foreign direct investment (FDI) in the retail sector. "What will happen to small businessmen and Indian retailers for whom the business is their bread and butter," he asked.

Other categories that the Haridwar-based company plans to expand in the year include bottled water brand Divya Jal and apparel and footwear under the brand name Paridhan this year.

The company said it's expanding its brick-and-mortar retail network, up from 5,000 exclusive stores, besides launching a loyalty card. Ramdev added that the company will hire 20,000 people at various levels in the current quarter. (See: Patanjali goes online, targets over Rs1,000 cr revenue this year).

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