Patanjali Ayurved Limited (PAL), registered under the company’s act 1956 with its registered office at New Delhi and three manufacturing units at Haridwar, Uttarakhand. The manufacturing units in Haridwar have the capacity to process ~ ton of raw materials, rolling out ~ products in medicine, food, cosmetics and toiletries. As part of the company’s future strategy to increase supply and target a larger customer base, PAL plans to set up manufacturing units in each State with an investment of about INR ~ million to INR ~ million.
Patanjali products were available only in Patanjali branded stores and arogya kendras. However, since ~% of FMCGs are bought from mom and pop stores, they have appointed around ~ distributors to penetrate these outlets. In addition to this, PAL has also tied up with modern retailer Future Group in order to further Plan to roll out more in Uttarakhand, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Chhattisgarh, Assam and Rajasthan.
The setting up of this food park helped them source raw material directly from the farmers and cut out the middle men. The food park is estimated to give healthy life to 400 million people and the propensity to reach 700 million people. The main objective of this park is to ease the supply of products to people in a way that farmers earn profit. It is swami Ramdev’s dream that farmers and labourers become self reliant and self-sufficient.
Patanjali has the aim to expand pan India due to which the company will be tapping on the franchise model to grow its network. As of February 2016, Patanjali has 5,000 franchise outlets and hopes to add another 1,000 more by the end of FY’2016.
To open a franchise outlet of Patanjali, one has to invest INR 0.7-1.5 million, depending on whether they open a Arogya Kendra (health and wellness centre) or Swadeshi Kendra (non-medical outlet). The area prescribed for these centers would range from 300 to 2,000 square feet.
Financial and Operating Performance of Patanjali
The revenue from the sale of PAL products increased from INR ~ million in FY’2010 to INR ~ million in FY’2015, achieving a CAGR of ~% during the same period. Personal Care segment contributed the highest to PAL’s revenue (~ %), amounting to INR ~ million in FY’2015. Nutrition and supplements came in second with a percentage of ~% and added INR ~ million to PAL’s overall revenue.
PAL’s budding grocery segment accounted for a share of ~% of total revenue, amounting to INR ~ million in FY’2015. Home care (~ %), Ayurvedic medicines (~ %) and Health Care (~ %) contributed INR ~ million, INR ~ million and INR ~ respectively, to the overall revenues of the company. The sale of books, CD’s, Mp3, DVD’s and VCD’s are classified under the ‘others’ category and accounted for ~% of PAL’s overall revenue, amounting to INR ~ million in FY’2015.
PAL received one of its highest revenue from the city of Mumbai, accounting for ~% of overall revenue, amounting to INR ~ million in FY’2015. Delhi accounted for ~% of PAL’s revenue, amounting to INR ~ million in FY’2015. With a strong population base of 62.7 million (2013) and a rising per capita income, Gujurat has managed to contribute ~% to PAL’s revenues, amounting to INR ~ million in FY’2015. Bangalore and Pune had contributed ~% and ~% respectively, to PAL’s overall revenue, accounting to INR ~ million in FY’2015.
A major portion of online sales come from north and west India and PAL’s online website accounted for only ~% of total revenue, amounting to INR ~ million in FY’2016. A large number of Patanjali products are still available on the website of online retailers and hence their contribution to overall revenue accounted for ~%, amounting to INR ~ million in FY’2016. Offline stores have accounted for ~% of PAL’s overall revenue in FY’2016; amounting to INR ~ million Offline stores include Patnjali owned retail outlets, franchisee stores, modern retail outlets and kirana shops (mom and pop stores).
A surge in demand for Patanjali’s personal care products amongst the young female population has resulted in the company generating revenues of INR ~ million from individuals aged between 25-50 years.
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Ankur Gupta, Head Marketing & Communications