Quality, Organic and Indigenous Products Sales Driving the Business Growth for Patanjali Ayurved Limited: Ken Research

New Delhi, July 13, 2016: Ken Research announced its latest publication on “Patanjali Company Analysis –New Product Pipeline and Brand Image to Drive Company Growth” provides a comprehensive analysis regarding the performance of the company and its FMCG’s in India. The report covers aspects such as the market size on the basis of revenue generated from the sale of FMCG’s under various product categories. The revenues of the company has been segmented based on various product categories including nutrition and supplements, groceries, personal care, home care, ayurvedic medicines and books and media. The revenues of the company have also been segmented on the basis of regional sales and distribution channel. The report also covers the value chain, working model, consumer profile and pricing analysis of Patanjali products. In addition to this, a comparative analysis of best selling Patanjali products including honey, toothpaste, face wash, instant noodles, biscuit and cookies and hair oil with other FMCG companies has been showcased in order to understand the market share. The financial performance of the company, balance sheet, P&L statement along with the expected future performance of the company has also been showcased in the report. This report will help industry consultants, FMCG manufacturers, dealers, retail chains, potential entrants into the FMCG segment and other stakeholders to align their market centric strategies according to the ongoing and expected trends in the future.

Patanjali has started aggressively advertising and marketing its products (Q4 2015) through television, billboards and radio and were one of the top five advertisers by year end (2015). While the revenues of PAL continue to achieve formidable growth, its increasing expenditure on marketing and advertising coupled with its rising administration expenses will result in lower growth rates as compared to the previous five years. The growth in its distribution channel is expected to be the primary reason for the quadrupling of its revenue from FY’2016 to FY’2020.

Personal care products are expected to generate maximum revenue for the company by FY’2020. Grocery and Nutrition and Supplements are projected to be second and third largest category in the contribution in Patanjali’s overall revenue during the same period. Health care and home care are estimated to be fourth and fifth largest category in Patanjali’s overall revenue, while the sale of ayurvedic medicines is projected to account for less than 8% share of overall revenue by FY’2020.

The increasing demand for cow ghee is expected to continue in the future, especially from the north and west region of the country. Future projections indicate the increase in revenue contribution by honey to PAL’s overall revenue. The rising demand from metropolitan cities and new variants of honey is expected to boost the revenue from the sale of honey in the future. Patanjali plans to increase their production capacity of amla juice from 6,000 to 8,000 liters per hour in order to meet the increasing demand for their fruit juices.

Patanjali manufactures 6 varieties of biscuits as of FY’2016 and is expected to roll out more variants in the coming years in order to target the cream biscuit segment. The cream biscuits will be priced higher than the non-cream biscuits in order to target the middle and upper class population. Patanjali has observed that most of its candies are consumed by the elderly population. Thus, they plan to launch newer varieties of candies and jelly in order to target the youth population since higher consumption and revenue generation occurs from this segment. Patanjali will invest in the improvement of its manufacturing facility and distribution network in order to ensure that the supply of spices matches the growing demand for this product. Patanjali will also expect the increased sale of spices from traditional retail formats. Forecast for the future indicates that Patanjali will manufacture and roll out new flavors in the instant noodle segment, depending upon the demand for this product.

The growing demand for organic products and rising health concerns have caused individuals to prefer detergents, soap and hand wash without any added chemicals. Hair oil and Patajali’s shampoo are expected to boost the revenues generated from the hair care segment. Majority of revenue generated by the hair care segment comes from the northern region of the country. The rising demand for herbal and organic products will see an augmenting demand for Patanjali’s toothpaste in the future, especially from the rural market. On the assumption that Patanjali will manufacture and sell new lines of body lotion and face wash, targeting men and children will help further boost the contribution of the body care segment to Patanjali’s overall revenue.

“According to Research Analyst at Ken Research, “For Patanjali to reach its long term goals, a major thrust area which requires attention is the focus on premium products to target the high income population. In addition to this, Patanjali must invest resources in order to improve its distribution network and effectively penetrate the rural and urban market by coming out with new product lines and using innovative packaging and design. Other FMCG giants must take notice of the growing trend towards the demand for herbal products and must establish its presence in the herbal segment.

The FMCG market is a low-margin business with companies paying high costs for the procurement of raw materials. Hence, FMCG companies should cultivate their own raw materials or source them directly from farmers, thereby abolishing the intermediaries in the procurement process. In addition to this, FMCG giants can also adopt back to back product launch in the herbal segment to capture the growing potential of this market.”

Corporate Comm India(CCI Newswire)