Patanjali aims Rs 5,000 cr sales in FY16, won't rush IPO
Future Consumer shares gain 12% as it sees Rs 1,000 crore business of Patanjali products in 20 months
Haridwar: Global FMCG majors watch out. India's home-grown Patanjali Ayurved is set to storm the world's second largest consumer market with an array of healthy products including noodles at a much cheaper price to double sales to Rs 5,000 crore in FY16.
"When we crossed Rs 2,000 crore, we created waves (dhoom macha diya). In this fiscal, we may cross even Rs 5,000 crore," Patanjali founder and yoga guru Baba Ramdev said in an interview to Bloomberg TV India.
The company now manufactures a wide ranging food and desi ghee to tooth paste.
Speaking in the tune of Prime Minister Narendra Modi's ambitious 'Make in India' mantra, Ramdev pitched for swadeshi movement to produce world class product at affordable rates.
If Patanjali actually achieves Rs 5,000 crore sales target, it will grab a significant market share in the consumer market. Amul, which is owned by Gujarat Co-operative Milk Marketing Federation (GCMMF), has crossed the Rs 20,000 crore mark in FY15. In 2014 calendar year, Nestle's sales were Rs 9,806 crore. HUL's revenue from beverages and packaged foods was Rs 5,043 crore or 18 per cent of its FY14 turnover of Rs 28,019 crore, while ITC's foods business is estimated around Rs 6,000 crore.
Citing the example of Nestle's noodle brand Maggi, which had an overwhelming market share before its sale was banned, Ramdev said Patanjali will come up with a healthier product at Rs 15 per pack as compared with Rs 25 charges by the MNC.
WATCH AND WAIT FOR IPO
Asked if the company will go for listing, he said the company will "watch and wait" for the opportune time but won't rush for the IPO even if business booms. "We have not yet decided on it (IPO). We will think over it. Investors have to wait for some time. "
After a successful tie up with Mukesh Ambani's retail chain Reliance Fresh, Ramdev's company tied up with Kishore Biyani's Future Consumer, the largest retailer with 570 stores in 243 cities.
In May, Future Retail and Bharti Retail announced a mega merger to create a behemoth with combined entity will operate 203 Big Bazaar and ‘easyday’ hypermarkets, 197 Food Bazaar and ‘easyday’ supermarkets, and 171 other stores comprising of Home Town, eZone, FBB and Foodhall.
Future Group chairman Kishore Biyani said the Patanjali Ayurved can really revolutionize the market. The consumer demand for Patanjali Ayurved products is way ahead of others. “We are targeting business worth Rs 1,000 crore with Patanjali in 20 months,” he said.
After Bloomberg TV India reported the tie up, Future Consumer's shares gained 11.6 per cent on Thursday. On Friday, the Future Consumer shares rose as much as 12 per cent after Ramdev unveiled his ambitious plan.
In a recent report, CLSA said Patanjali Ayurved is bigger than listed FMCG brands like Emami and is perhaps the fastest growing fast moving consumer company in India and with revenue in excess of Rs 2,500 crore during FY15.
Set up in 2006, Patanjali produces 30 different types of food products--mustard oil, flour, butter, biscuits, spices, oil, sugar, juice, honey and even tooth paste-- at a very competitive price.
With hardly 200 stores in 2012, Patanjali Ayurved has increased network to 4,000 in 2015. Patanjali is also selling their products online. The company plans to open outlets at Railway Stations and Airports.