Ramdev's FMCG Business, Patanjali All Set To Scale $1 Billion In Sales

At Patanjali Ayurved's manufacturing facility in Haridwar, there is brisk activity as cartons of freshly made products are being loaded onto trucks to be dispatched to stores across India.

With the financial year nearing a close, an official pointed explained, all hands are on the deck to help the company achieve its targeted turnover of Rs 5,000 crore this fiscal.

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For a manufacturing company set up about 10 years ago, achieving a Rs 5,000-crore turnover is not easy.

However, for Patanjali Ayurved, which is breaking conventional marketing norms, sales are inching up month on month. Sources in the know believe Patanjali could have clocked monthly sales of around Rs 600-700 crore in January and February, which means Baba Ramdev's baby could become a billiondollar entity, with its annualized turnover expected to cross the Rs 7,000-crore mark before the end of fiscal 2017.

Which means, Patanjali could become the fifth largest FMCG company in the country, after Hindustan Unilever BSE 0.84 %, ITC, Nestle India and Britannia BSE -0.37 % Industries. This would bring it well ahead of traditional FMCG players like Dabur, Godrej Consumer Products and Marico.

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In an exclusive interview at the company's headquarters, Acharya Balkrishna, MD, Patanjali Ayurved, said in the current fiscal, as of early-March, the company's turnover has already crossed Rs 4,500-crore and is cruising at a monthly rate of about Rs 500-550 crore.

"Our target is to go be yond Rs 500 crore a month.Because we are also making plans for future expansion, we are moving in line with the target," he said.

"We may even reach Rs 600 crore a month mark -that will give us an annual turnover of approximately Rs 7,000 crore," said Balkrishna. Even at the current level of Rs 4,500-crore turnover, Patanjali has paced ahead of oral care leader Colgate-Palmolive BSE -0.94 % (India), challenging it which its `Dant Kanti' toothpaste.

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Given that Patanjali has been grabbing eyeballs through its advertising, industry experts believe the company could soon even reach Rs 10,000 crore turnover, which would make it as big as ITC's non-tobacco FMCG sales.

But Balkrishna said that would take time. "We have to plan, right from procurement of raw materials to processing to manufacturing and marketing. We work on a single channel right from the farmer to the end consumer and that is the real reason why our quality and costs are under con ..

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"We buy raw materials directly from the farmer. In other companies, raw material sourcing and marketing of products are done by different entities. So we don't have sudden peaks and troughs in growth, we plan a steady growth. It's not like a share market where one day there is growth and the other day a slump," Balkrishna said.

The rural market is another area where FMCG biggies could face a tough challenge from Patanjali's products, which are priced below regular brands because the company consciously operates on thin margins.

"We are expanding our reach through tempos which can go deeper into rural markets. We will begin with 500-600 tempos and will gradually expand the network," said Balkrishna.