New Delhi, January 17, 2018: Ayurvedic products maker Patanjali Ayurved said it’s poised to overtake the country’s biggest consumer goods company Hindustan Unilever LtdBSE -0.67 % (HUL) by next year, underscoring the sudden rise of a brand that few had heard of a decade ago. By contrast, HULBSE -0.67 % has been present in India for more than 80 years.

To be sure, Baba Ramdev-founded Patanjali’s FY17 sales amounted to Rs 10,561 crore, a third that of the listed HUL, which reported sales of Rs 34,487 crore.

Analysts, however, are sceptical and say it will be a tough fight.

“While Patanjali has expanded the ayurveda category and is talking of adding many new segments to its portfolio which will help it grow incrementally, HUL has created its business over decades across branded FMCG. It’s not going to be easy to overtake HUL in its respective segments, specially with HUL also adding muscle to its own ayurveda range of products now,” Edelweiss Securities VP Abneesh Roy said.

Rs 1,000-Crore Online Sales Target This Year
“We have created capacity of Rs 50,000 crore and we are racing ahead now. Our target is to beat HUL by next year,” Ramdev said in New Delhi on Tuesday. The company’s surge over the past few years has forced almost every large consumer goods maker to venture further into the ayurveda space according to economictimes.indiatimes.com.

An HUL spokesperson said: “We have no comments to offer.”

The Ramdev-led ayurvedic medicines-to-consumer goods company has seen sales shoot up more than 20 times from Rs 453 crore in FY12.

Patanjali, however, is not considering a listing.

“We don’t want to come under pressure of declaring our financials quarterly. We do not have the valuations game in mind,” Ramdev said, adding that he cannot disclose numbers before the March financial year end.

Patanjali announced partnerships on Tuesday with eight ecommerce companies, including Amazon, Flipkart, Paytm Mall and Grofers, for a mega online push. It wants to reach “every doorstep through a robust online business”.

According to the reports published in economictimes.indiatimes.com Ramdev said Patanjali crossed Rs 10 crore in online sales in December, and is targeting more than Rs 1,000 crore this year itself from ecommerce. “We began a trial of online sales and did the highest online sales by any FMCG (fast-moving consumer goods) brand in a month,” he said. Patanjali products will be sold at maximum retail price (MRP) online, he said, implying there would be no discounts.

GST RATES
Ramdev said he expected finance minister Arun Jaitley to announce a budget “helpful to consumers, farmers, armed forces and citizens of the country” on February 1.

He’s hopeful that goods and services tax (GST) rates on ayurvedic products will be lowered. Such items were “natural and good for consumers”, he said. GST on products derived from cows such as cow ghee and fertilisers went up from 5% to 12% under GST, which was rolled out on July 1last year. All ayurveda medicines were included in the 12% tax bracket, up from 5%.

While the apparel business is expected to be launched early next year with a range of denim, men’s and women’s wear and sports apparel, Ramdev said plans for setting up restaurants as announced last year are “on hold for now”.

He also said he was against foreign direct investment (FDI) in the retail sector. “What will happen to small businessmen and Indian retailers for whom the business is their bread and butterRs ”

Economictimes.indiatimes.com further added that other categories that the Haridwar-based company plans to expand in the year include bottled water brand Divya Jal and apparel and footwear under the brand name Paridhan this year.

The company said it’s expanding its brick-and-mortar retail network, up from 5,000 exclusive stores, besides launching a loyalty card.

Ramdev added that the company will hire 20,000 people at various levels in the current quarter.

The Bombay High Court had on January 11 passed an order under which Patanjali agreed to stop ads that mock HUL brands. Patanjali had telecast a TV commercial disparaging HUL’s soap brands Lifebuoy, Dove, Lux and Pears in September last year. HUL had moved the high court and obtained an injunction restraining Patanjali from telecasting the commercial.

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