Patanjali Ayurved hits GST roadblock: Sales growth may slow down in FY18

After growing at a breakneck pace for five years, Baba Ramdev’s Patanjali Ayurved has hit a major roadblock. During the financial year 2017-18, the group’s sales growth has slowed down considerably–- thanks to the massive transformational work following the implementation of the good and services tax (GST) regime in mid-2017.

According to Patanjali spokesperson S K Tijarawala, the initial glitches related to GST and the realignment work required due to its implementation cost Patanjali two months’ business in 2017. “We are in a growth mode and we have grown during the past year, contrary to the initial predictions that FMCG companies would face de-growth due to the implementation of GST. But, unlike other years, in 2017-18 we got only 10 months to do business. This might have a certain impact. The final revenue numbers are still being calculated. But, what we can confidently say now is that the 2017-18 revenue figure will not be less than what it was in 2016-17”, he told Business Standard.


In 2016-17, the Patanjali group had posted Rs 105.6 billion in revenues, of which Patanjali Ayurved – the flagship entity that markets most of its packaged consumer good products – contributed Rs 93.46 billion. Earlier, Baba Ramdev had set a target of doubling Patanjali’s sales during 2017-18 to over Rs 200 billion.

Patanjali claims to take on KFC, but its anti-MNC stand is self-destructive

PATANJALI - It was the early 2000s, and as a reporter I was on the trail of the country's biggest food marketer venturing into categories as diverse as pizzas, ice-cream mixes and value-added milk confectionery. There was a bravado in the way the top team of Gujarat Cooperative Milk Marketing Federation (GCMMF) -- popularly known for and as Amul after its larger-than-life brand -- was dismissive of multinational firms dominant in the new markets it was entering.

"We know the modus operandi of the MNCs. We'll embarrass them everywhere," one senior manager told me. In fact, going by the tone and tenor of the conversation I had with the top team at GCMMF's Anand headquarters that sultry July afternoon 14 years ago, it was clear to me that anti-multinationalism, an article of faith with the cooperative besides cost-competitiveness, was getting the better of this otherwise fine institution.

Not that the deep-pocketed multinationals that GCMMF was taking on at that time were intimidated, but any competition from the country's largest integrated food marketer could not be taken lightly. For a while there was a din in the north Indian markets on Amul's plans for frozen Utterly Delicious ready-to-cook pizzas and Snowcap ice-cream mixes.

Fortunately for GCMMF that bravado didn't last long, and the firm quietly withdrew from the new markets, letting the Domino's, Pizza Huts and Perfettis rule the roost. Today, GCMMF is a much stronger firm, with revenues of over Rs 20,000 crore, and a target to more than double it to Rs 50,000 crore in the next four years. It is investing Rs 5,000 crore in its core milk procurement, processing and manufacturing facilities across the country.
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Patanjali and its grand plans: Ramdev expects Rs 20,000 cr revenue in FY18

Baba Ramdev-led Patanjali is looking at a two-fold jump in sales at over Rs 20,000 crore this financial year as it plans to double its distribution network to 12,000 across the country.

Besides, the company is aspiring to further strengthen its presence and lead in most of the product categories.

The Haridwar-based FMCG firm had clocked a turnover of Rs 10,561 crore in the financial year ended March 31, 2017.

"We would grow more than double this year... By next year, Patanjali would be in the leading position and in most of the product categories, it would be number one," yoga guru Ramdev said.

The company is in the process of setting up mega production units at several places, including Noida, Nagpur, and Indore, which would take its production capacity to Rs 60,000 crore from the existing Rs 35,000 crore.

"Our Noida facility would have a production capacity of Rs 20,000 crore, Nagpur 15,000 crore to Rs 20,000 crore and Indore Rs 5,000 crore," he added.

The company is also strengthening its distribution network to reach more consumers across the country.

"We would double our distributors' network to 12,000 from the present 6,000," Ramdev said.

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Ramdev's Patanjali Amla juice found unsafe; Army canteens suspend sale

The canteen stores department(CSD), the retailing platform for India's defence forces suspended the sale of Baba Ramdev's Patanjali Ayurved's amla juice after receiving a negative state laboratory test report about the product. In a letter dated April 3, 2017, the CSD asked all depots to make debit notes for their existing stock so that the Amla Juice can be sent back to Patanjali.

Amla Juice was one of Patanjali's first consumer launches which helped the company establish its credentials in the consumer business segment. As per reports, a batch of juice tested at the lab in Kolkata was declared unfit for consumption. Patanjali has therefore withdrawn amla juice from all army canteens.

According to a report of  Economic Times, CSD is the retailer for India's defence forces with selling nearly 5,300 products to about 12 million personnel of the Indian defence services, including their families and ex-servicemen.

It must be noted here that the same lab in Kolkata had detected high lead levels and MSG in the samples of Nestle Maggi noodles two years ago, that had initially led Nestle to withdraw the brand across India.

It is not the first time that Patanajli has fallen into a controversy. The company had been also questioned for selling noodles and pasta without relevant licences. Advertisements of some of its products are accused of misleading customers.
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