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Contents
Sector Information ............................................................................................................................................ 2
Introduction .................................................................................................................................................. 2
Industry Size/ Contribution to GRP ............................................................................................................... 2
Market Overview .......................................................................................................................................... 3
Growth Sector ............................................................................................................................................... 3
Market Share ................................................................................................................................................ 3
Growth Pattern ............................................................................................................................................. 3
Porters Five Force Analysis of the Seor......................................................................................................... 3
Company Information ....................................................................................................................................... 4
Company Snapshot ....................................................................................................................................... 4
Product Portfolio ........................................................................................................................................... 5
Swot Analysis of the Company...................................................................................................................... 7
Target Market ............................................................................................................................................... 9
Competitors Analysis .................................................................................................................................... 9
News (Last 6 Months) .................................................................................. Error! Bookmark not defined.
Marketing .......................................................................................................................................................... 9
Swot analysis of the product....................................................................................................................... 10
Marketing of Havells ................................................................................................................................... 11
STP of Patanjali ........................................................................................................................................... 11
PLC of Patanjali ........................................................................................................................................... 13
Finance ............................................................................................................................................................ 14
Gross Profit Margin ..................................................................................................................................... 16
Direct and Indirect Costs ............................................................................................................................. 16
Fixed Assets During the year ....................................................................................................................... 17
Working capital of the year......................................................................................................................... 17
Debt equity ratio ......................................................................................................................................... 17
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Sector Information
Introduction

Fast moving consumer goods (FMCG) are the 4th largest sector in the Indian economy. Fast
Moving Consumer Goods are inexpensive products that require less time and efforts. These
are non-durable goods which are sold in packaged forms. These products are purchased by
the end-consumer in small quantities and regularly. The main FMCG segments can be
classified as Personal Care, Household care, which accounts for the remaining 50 %.i Food
and beverages which accounts for 19 % of the sector, healthcare which accounts for 31%.

Industry Size/ Contribution to GRP

The sector has grown from US$ 31.6 billion in 2011 to US$ 52.8 billion in 2017-18.
Expected to grow at a Compound Annual Growth Rate (CAGR) of 27.9% to reach US$ 103.7
billion by 2020.
Urban sector is expected to have a stagnant revenue growth at 8% in FY19 and the rural
segment is forecasted to contribute 15-16% of total income in FY19.
Sector observed growth of 16.5% in value terms between July-September 2018.
India’s fast moving consumer goods (FMCG) industry is likely to grow at a slower pace at 11-
12% in 2019, almost 2% lower than in 2018
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Market Overview
Growth Sector

The FMCG sector has grown from 2,20,852.4 crore (US$ 31.6 billion) in 2011 to ₹ 3,68,669.75 crore
(US$ 52.75 billion) in 2017-18. The sector is further expected to grow at a Compound Annual Growth
Rate (CAGR) of 27.86 % to reach 7,24,759.3 crores (US$ 103.7 billion) by 2020.

The sector is projected to grow 11-12 % in 2019. It perceived growth of 16.5 % in value terms
between June–September 2018; supported by moderate inflation, increase in private consumption
and rural income. FMCG’s urban segment is expected to have a steady revenue growth at 8 % in
FY19 and the rural segment is forecasted to contribute 11-12 % of total income in FY19. Post GST
and demonetization, modern trade share grew to 10 % of the overall FMCG revenue, as of August
2018.

Accounting for a revenue share of around 45 %, rural sector is a large contributor to the overall
revenue generated by the FMCG sector in India. Demand for quality goods and services have been
going up in rural areas of India, on the back of improved distribution channels of manufacturing and
FMCG companies. Urban segment accounted for a revenue share of 55 % in the overall revenues
recorded by FMCG sector in India.

FMCG Companies are looking to invest in energy efficient plants to benefit the society and lower
costs in the long term.

Market Share

Growth Pattern

Porters Five Force Analysis of the Sector

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Company Information

Patanjali ayurveda was formed in january, 2006 as a private limited company by yoga guru ramdev and his
partner sri acharya balkrishnaji. In june, 2007, it was converted to a public ltd. Company. It is registered under the
companies act, 1956 and has its registered office in bijwasan, new delhi and three other offices in haridwar. The
company was started with the vision of uplifting the life of indian farmer by locally sourcing the raw materials
from them and making their lives better while at the same time provide an opportunity to the indian masses to
move towards healthy lifestyle by promoting ayurveda and herbal products. Baba ramdev started off as a yoga trainer
who featured in televised programs in aastha and sanskaar channels and made indians realize that they have forgotten
indian tradition and art forms- one of them being yoga. He got wide acceptance and word of mouth publicity helped
him reach to a wider audience. He projected yoga as a panacea to all the health problems. In its first year of
operations, 2008, patanjali generated a revenue of over 60 crores. Almost 10 years later, the home-grown venture
has grown to be a 5000-crorecompany and is posing a threat to the well-established companies in the fmcgdomain.

Company Snapshot
WHO FOUNDED PATANJALI

In 1995, Balkrishna and Ramdev founded Divya Yoga Pharmacy in Haridwar, and in 2006, they
founded Patanjali Ayurvedic, an FMCG company involved in the manufacturing and trading of FMCG,
herbal, and ayurvedic products. Followers of Ramdev, NRIs Sunita and Sarwan Poddar, helped kick-
start the business with a loan. According to Bal Krishna, he had taken out a ₹50–60 crore loan at a
time when he had never held a personal bank account in his name. In 2012, the company posted a
turnover of ₹450crore (US$65 million) which by 2015–2016 had risen to ₹5,000
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crore (US$720 million).

Baba Ramdev was born on 25 December in a Hindu family in 1965 to Ram Niwas Yadav and Gulabo
Devi at Hazaribag Ali Saiyad Pur village of mahendragrah district, Alipur, Haryana; Alipur being one
of the poorest districts of Haryana. Baba Ramdev founded the Divya Yog Mandir Trust in 1995. In
2003, Aastha TV began featuring him in its morning yoga slot. There he proved to be telegenic and
gained a large following. A large number of people, including celebrities from India and abroad,
attended his Yoga camps

Product Portfolio
Patanjali has a wide range of products with the theme of Ayurvedic/herbal being common across all
categories. It has four business divisions: food and beverages, cosmetics and health, health drinks and home
care.

The highest revenue grossing products are Patanjali cow ghee, Dant Kanti, Kesh kanti, Patanjali Atta
noodles and Patanjali Aloe Vera juice and gel.

The customer base of Patanjali is very huge and with each passing day, it is growing bigger. A major ramp-up
came when Patanjali was relaunched by Baba Ramdev in 2014. After that it has not looked back. The
company is finding it difficult to cater to the demand of all the customers. It has increased its distribution
channels and expanded its reach Multi food from the point when it started. Production has also
increased and it has now over 450 products in its portfolio.
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Swot Analysis of the Company

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Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT)

Analysis of Patanjali. Strengths are:

1. Patanjali has grown at a rapid pace within a short span of time

2. Extensive marketing has pulled people into accepting its products

as a healthier and safer option

3. Strong brand ambassador with Baba Ramdev as its face helped

Strengths boost the business for Patanjali

4. Patanjali offers new products, new style of marketing etc has

changed the market dynamics

5. The venture has generated tremendous revenues, which are

comparable to existing players

6. More than 200,000+ employees with Patanjali

7. Excellent word of mouth marketing has helped the brand grow

Here are the weaknesses in the Patanjali SWOT Analysis:

Weaknesses 1. Launched too many products in a short time

2. Patanjali faced issue with advertising council of India

Following are the Opportunities in Patanjali SWOT Analysis:

1. Patanjali can tap overseas market as Ayurveda is increasingly

Opportunities getting awareness

2. Can enter more segments in personal hygiene, FMCG etc

3. Can also diversify in apparels

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The threats in the SWOT Analysis of Patanjali are as mentioned:

1. Prominent FMCG players coming up with their own variants of

Threats ayurvedic products

2. Big player shave their existing model which is sturdy, which

can overcome new competition from Patanjali

Target Market
Competitors Analysis

Patanjali Ayurved’s growth faltered during the past 12 months as rivals, mostly
multinationals, launched natural and herbal products to counter the challenge of the Baba
Ramdev-led enterprise.
Patanjali’s sales volumes grew 7% during October-March 2018 and 22% in April-September
2017, according to data from Kantar World panel, a global consumer research firm. That’s a
sharp fall from 52% growth in October-March 2017 and 49% during April-September 2016.
Last week, Credit Suisse said Patanjali’s FY18 sales growth by value was little changed after a
100% compounded annual growth rate (CAGR) over the past four yea₹.
“Patanjali has been the biggest disruptor in FMCG space. As the brand is established and
consistently growing, in terms of both shares and retail shelves, our growth is realistic and in
sync with other FMCG companies,” said SK Tijarawala, spokesperson at the Haridwar-based
company. “Patanjali built its consumer-facing Ayurveda business almost from scratch in a
few years and gained market share and shelf space rapidly, challenging established
multinational brands in all categories it has forayed in.
For a company that started as a small pharmacy in 1997, Patanjali has launched more than
two dozen mainstream FMCG products — from toothpastes, shampoos and other personal
care products to modern convenience foods such as cornflakes and instant noodles. Annual
sales have doubled every year since 2013 to touch ₹ 10,500 crores. Patanjali’s success acted
as a catalyst for herbal, ayurvedic and natural products, which now account for about 10%
of the consumer goods market. Between FY13 and FY18, these products grew at a CAGR of
21% compared with 11% for the overall FMCG sector.

Marketing
Promotional strategies

The promotion strategy of Patanjali had two main objectives

One was definitely to highlight the health benefits of using Ayurveda products & to evoke the Swadeshi
sentiment into the Indian consumer’s mind.
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The objective was to make aware of the consumer about the sinister way of the profit making by the
FMCG giants which are typically MNCs: that they not onlyfool the consumer giving stale, adulterated
products but at the same timecharging highpriceatthecostofexploitingourfarmers.Allthesepromotions
werecarried out via various channels and modes, some of which are as follows.

Direct marketing
Ramdev with his popular yoga guru image and organizing Yoga camps across India round the calendar
contributes to the direct marketing of the Patanjali products where they are promoted and advertised
along with the main events.

Word of Mouth
Most of the promotion is carried out indirectly by the followers of Ramdevand the early adopters of
Patanjali products who have found these products to be fair. While communicating with their family,
friends, neighbours and colleagues, relatives. they indirectly promote brand Patanjali by sharing their
positive experience with the products. Publicity through word of mouth form users is something that tells
that that the brand sells itself with minimal promotion.

Media

Aastha channel is the TV media where Patanjali is heavily promoted. It mainly started as a means to spread
health awareness & yoga sessions to the masses. But with the advent of Patanjali, this channel along with
the yoga sessions were leveraged to promote Patanjali products & the health benefits of consuming or
using it. This move was aligned sincetheywerepromotinghealthproductsinahealth-related lifestyle
show.Apartfrom this, Patanjali ads are sometimes observed in few other channels and print media.
Recently, a new campaign on radio has been launched by Baba Ramdev (Patanjali apnaiye, desh ko aarthik
aazadi dilaiye), which hove₹ around the idea of providing financial independence to the nation by the
use of indigenous products.

Celebrity endorsement
Patanjali rarely did any celebrity endorsement since the popular face of Ramdev was sufficient to carry on
the promotion. His image as a yoga guru totally aligned with the Ayurveda product offering of Patanjali.
Celebrity endorsement is something which was not previously in Patanjali’s promotion. However lately,
wrestler Sushil Kumar has been seen endorsing the Ghee brand of Patanjali. But this is also to be kept in
mind that this was not in a very large scale promotion, nor the sports celebrity was a top shot. We are yet
to see a top shot celebrity endorsing brand Patanjali.

Swot analysis of the product

Patanjali ghee:
Patanjali desi ghee is the largest selling product of the company. As per details mentioned
on the company’s website, Patanjali cow ghee is ultimate in its pure quality and is
advantageous to your whole family. The desi ghee comes for Rs 270 for a 500 gram packet.
During the fiscal year, Patanjali ghee had sales of Rs 1,467 crore. This accounts for 13.9 % of
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the total revenue generated in FY17. Patanjali has already garnered more than 5% market
share and aims to further increase to 13% by FY20.

Marketing of Patanjali

Promotional strategies

The promotion strategy of Patanjali had two main objectives One was definitely to highlight
the health benefits of using Ayurveda products & to evoke the Swadeshi sentiment into the
Indian consumer’s mind.
The objective was to make aware of the consumer about the sinister way of the profit making by the
FMCG giants which are typically MNCs: that they not onlyfool the consumer giving stale, adulterated
products but at the same timecharging highpriceatthecostofexploitingourfarmers.Allthesepromotions
werecarried out via various channels and modes, some of which are as follows.

Direct marketing
Ramdev with his popular yoga guru image and organizing Yoga camps across India round the calendar
contributes to the direct marketing of the Patanjali products where they are promoted and advertised
along with the main events.

Word of Mouth
Most of the promotion is carried out indirectly bythe followers of Ramdevand the early adopters of Patanjali products
who have found these products to be fair. While communicating with their family, friends, neighbours and
colleagues, relatives. they indirectly promote brand Patanjali by sharing their positive experience with the products.
Publicity through word of mouth form users is something that tells that that the brand sells itself with minimal
promotion.

Media

Aastha channel is the TV media where Patanjali is heavily promoted. It mainly started as a means
to spread health awareness & yoga sessions to the masses. But with the advent of Patanjali, this
channel along with the yoga sessions were leveraged to promote Patanjali products & the
health benefits of consuming or using it. This move was aligned since they were promoting
health products in a health related lifestyle show. Apart from this, Patanjali ads are
sometimes observed in few other channels and print media. Recently, a new campaign on
radio has been launched by Baba Ramdev (Patanjali apnaiye, desh ko aarthik aazadi dilaiye), which
hove₹ around the idea of providing financial independence to the nation by the use of
indigenous products.

STP of Patanjali
Segmentation: From the product line up of Patanjali Ayurveda, it can be safely assumed that it does
not segment the customer base as such, making the whole population its potential customer. As per
Ramdev’s vision of bringing welfare and manufacturing good and unadulterated natural Ayurveda
products easily available to the common masses, this stance of not segmenting the market as such
seems aligned.
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However on analysis, a broad segmentation and targeting can be observed

1. Demographic – Income, age etc.
2. Psychographic
Health Consciousness, Patriotism Patanjali 's target segment comprise of health conscious
people who prefer “value for money” natural products. Patanjali has products targeted at
children (health drinks) and elderly people (some Ayurvedic medicines).
Almost all products of Patanjali are affordable in nature (at a price 15% - 30% lower than the
competition); hence the income segmentation strategy has worked. Initially the products
were targeted at lower and middle income groups but with the present turnover of close to
a billion dollars (5000 cr) this fiscal, it is evident that Patanjali 's products have buyers not
only from the lower income and middle income segments but also from health conscious
upper middle and upper income segments.
These 2 segments have found value in Patanjali 's natural and Ayurvedic products. Patanjali
's market targeting strategy is that of “Selective Specialization” as they cater to a lot of
segments in their market but not the entire market.
Positioning: Patanjali has a two pronged positioning strategy
The brand slogan of Patanjali is “Prakriti ka Aashirwaad” which means Blessings of Nature.
Patanjali is positioned as “Natural Products available at affordable prices”.
The 2nd positioning plank is that of “Swadeshi Make” (Made in India).
Both the positioning planks have created wonder for Patanjali. The twin positioning planks
are synergistically integrated with the brand Patanjali as India is considered to be the birth
place of Ayurved. The “Swadeshi make” plank also helps in assimilating the previous people
movements initiated by Baba Ramdev like Bharat swabhiman and swadeshi andolan with
Patanjali Ayurved Ltd
BCG Matrix in the Marketing strategy of Patanjali

Star in BCG matrix analysis of Patanjali

Patanjali Has grown in multiplex and made a long way in several products. High growth is
credited to its star the products like dant kanti and kesh kanti. These products are showing a
high growth over to adopt change it has introduced through Ayurveda products
Cash cow in BCG matrix analysis of Patanjali
Since inception Patanjali has made serious in roads in few categories where it stands tall
today with consisted margins. These products are certainly cash cow for the Patanjali ghee,
honey and medicines
Question mark in BCG matrix analysis of Patanjali
These are the products Patanjali trying to push with the other successful product but still
has got categories like corn flakes, healthy noodles, oats
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Dog in BCG matrix analysis of Patanjali

Patanjali has certain product which are almost out of its growth phase and being constant.
Which are too impact the top line or bottom line like kayakalp oil, soap.

PLC of Patanjali

Patanjali has now a huge product portfolio under its brand. But scrutinizing deeply, not all products were
launched at the same time. Rather, they started with few products and since then has been constantly
innovating to come up regularly with new products. Also, in comparison with other FMCGs, Patanjali is a fairly
young company dating back to 2007. Hence all of its products will be either in introductory or in the growth
phase and has still a long way to go before it reaches maturity.

Introductory Stage
Ayurveda means life-knowledge, which was a system of medicine practiced in India since ages.
Ramdev was the one who materialized and commoditized that knowledge and broke the barrier
of using Ayurveda not only in medicine but in consumable products too. With this vision, Patanjali
was started in 2007.
Few products which are in the introductory stage are fertilizers and floor cleaners. Clearly, the innovators
and early adopters are those who are followers of Ramdev and middle age to old people who are
health conscious and believes in the Ayurveda.

Growth Stage
ThemeteoricriseofPatanjalistartedfrom2012. From 2012 to2015, itposted CAGRof 64.7% of revenue
growth and sales worth ₹. 2000 crore. Patanjali is already past the gap between early adopter & early majority.
Many of its best-selling products like ghee and Dant Kanti have reached the growth stage.
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Finance

Income Statement

Y/E Mar, Rs mn FY15 FY16 FY17 FY18

Net sales 4,512 8,439 11,867 20,067

Growth, % 87 41 69

Other income 27 51 79 73

Total income 4,539 8,490 11,946 20,141

Raw material expenses 1,727 4,377 6,194 10,999

Employee expenses 251 456 500 724

Other Operating expenses 1,158 2,088 2,780 3,763

EBITDA (Core) 1,402 1,569 2,472 4,654

Growth, % 12 58 88

Margin, % 31 19 21 23

Depreciation 338 330 314 415

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EBIT 1,064 1,239 2,158 4,239

Growth, % 16 74 96

Margin, % 24 15 18 21

Interest paid 362 287 181 152

Non-recurring Items - - -15 -

Pre-tax profit 702 952 1,963 4,087

Tax provided 143 196 416 999

Profit after tax 559 756 1,547 3,088

Growth, % 35 105 100

Source: Company, PhillipCapital India Research

Balance Sheet

Y/E Mar, Rs mn FY15 FY16 FY17 FY18

Cash & bank 51 41 541 1,678

Debtors 691 782 765 1,032

Inventory 1,318 1,700 1,920 4,872

Loans & advances 509 650 1,379 2,797

Other current assets 17 20 306 517

Total current assets 2,585 3,193 4,911 10,896

Investments 227 230 241 465

Gross fixed assets 3,289 3,552 3,810 4,038

Less: Depreciation 727 1,057 1,371 1,775

Add: Capital WIP 2 50 0 3

Net fixed assets 2,563 2,545 2,439 2,267

Total assets 5,375 5,968 7,591

13,628

Current liabilities 2,308 2,511 2,530 5,262

Provisions 144 192 414 1,160

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Total current liabilities 2,452 2,703 2,945 6,423

Non-current liabilities 1,312 979 660 445

Total liabilities 3,764 3,683 3,605 6,868

Paid-up capital 411 411 413 413

Reserves & surplus 1,199 1,874 3,573 6,347

Shareholders’ equity 1,611 2,285 3,986 6,760

Total equity & liabilities 5,375 5,968 7,591 13,628

Gross Profit Margin

GROSS PROFIT X 100 = 4087 X 100 = 20.36%

NET SALES 20067

NET PROFIT MARGIN = PAT X 100 = 3088 X 100 = 15.38%

NET SALES 20067

Direct and Indirect Costs

2. DIRECT AND INDIRECT COSTS

Direct cost = cost of material consumed + purchase of stock in trade + changes in inventories

+ Employee benefit expenses

2018 = 6194 + 500 + 2780

= 9474.00

2017 = 1099 + 724 + 3763

= 15486.00

Changes in comparison to previous years = 15486.00 – 9474.00

= 38.82 %

15486.00
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Indirect cost = Finance cost + Depreciation Expenses + Tax Expenses + Other Expenses + Employee
Benefit Expenses

2018 = 999 + 415 + 500 + 2780 = 4694

2017 = 416 + 314 + 724 + 3763 = 5217

Changes in comparison to previous year = 5217 – 4694

5217

= 10.02%

Fixed Assets During the year

2018 – 2017 = 2439 –2267 = 172

Working capital of the year

CURRENT ASSETS - CURRENT LIABILITIES = 10896 – 6423 = 4473

Debt equity ratio

TOTAL LIABILITIES = 6869 = 1.01

SHARE HOLDERS EQUITY 6760

HUMAN RESOURCES

Organization structure: