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Patanjali Ayurved: Will the Growth Momentum Sustain?
EXCERPTS
BUSINESS MODEL
The Indian FMCG sector was mostly dominated by MNC players like Hindustan Unilever Limited (HUL) and Procter & Gamble (P&G) (Refer to Exhibit-I for the list of major FMCG companies in India). Home grown FMCG companies like Dabur and Jyothy Laboratories had smaller market shares when compared to the foreign players. They could not give the foreign players much of a competition as they lacked financial and other resources. Most of the Indian FMCG companies focused on producing western products like detergents, soaps, and toothpastes. Some local FMCG companies like Dabur and Emami focused on producing ayurvedic and herbal products like cosmetics and personal hygiene products. But they had a limited market share as consumers preferred western products. Companies like Jyothy Laboratories, which produced products like fabric conditioners and detergents, depended on one or two of its star products for most of its revenues... |
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THE RISE OF BABA RAMDEV
Baba Ramdev (Ramdev), one of the main reasons behind the success of Patanjali, had humble origins but steadily built up his image as a noted spiritual guru of India. Ramdev was born as Ramkishan Yadav in 1965 in the Indian state of Haryana...
CAN IT SUSTAIN THE GROWTH MOMENTUM?
According to some industry experts, Patanjali’s quick success did not guarantee its growth in the future. Some of the factors which contributed to its fast growth might, in fact, become stumbling blocks, they said. Patanjali might face problems if Ramdev’s personal image was adversely impacted...
OUTLOOK
According to the estimates of some brokerages, Patanjali would more than double its net turnover from INR 20 billion in the Fiscal Year 2014 to INR 40 billion in the Fiscal Year 2016. IIFL even projected a net turnover of INR 200 billion by the Fiscal Year 2020. Patanjali had good growth plans for the future...
Exhibits
Exhibit - I: Major FMCG Companies in India
Exhibit - II: Comparison of Prices of Patanjali and Other FMCG Companies
Exhibit - III: Major Products of Patanjali
