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Patanjali Ayurved Limited Company Analysis - New Product Pipeline and Brand image to Drive Company Growth: Ken Research

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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. – PowerPoint PPT presentation

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Title: Patanjali Ayurved Limited Company Analysis - New Product Pipeline and Brand image to Drive Company Growth: Ken Research


1
Patanjali Ayurved Limited Company Analysis - New
Product Pipeline and Brand image to Drive Company
Growth Ken Research
2
Patanjali Company Overview Patanjali Ayurved
Limited (PAL), registered under the companys 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
companys 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.
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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 Ramdevs
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 FY2016. 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 FY2010 to INR million in FY2015, achieving
a CAGR of during the same period. Personal
Care segment contributed the highest to PALs
revenue ( ), amounting to INR million in
FY2015. Nutrition and supplements came in second
with a percentage of and added INR million
to PALs overall revenue.
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PALs budding grocery segment accounted for a
share of of total revenue, amounting to INR
million in FY2015. 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, CDs, Mp3, DVDs and
VCDs are classified under the others category
and accounted for of PALs overall revenue,
amounting to INR million in FY2015. PAL
received one of its highest revenue from the city
of Mumbai, accounting for of overall revenue,
amounting to INR million in FY2015. Delhi
accounted for of PALs revenue, amounting to
INR million in FY2015. With a strong
population base of 62.7 million (2013) and a
rising per capita income, Gujurat has managed to
contribute to PALs revenues, amounting to INR
million in FY2015. Bangalore and Pune had
contributed and respectively, to PALs
overall revenue, accounting to INR million in
FY2015. A major portion of online sales come
from north and west India and PALs online
website accounted for only of total revenue,
amounting to INR million in FY2016. 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 FY2016.
Offline stores have accounted for of PALs
overall revenue in FY2016 amounting to INR
million Offline stores include Patnjali owned
retail outlets, franchisee stores, modern retail
outlets and kirana shops (mom and pop stores)
5
  • A surge in demand for Patanjalis 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.
  • Market Share of Patanjali Products in the FMCG
    Segment
  • The revenues from the honey industry increased
    from INR million in FY2010 to INR in
    FY2015, achieving a CAGR of during the same
    period.
  • Dabur has the highest market share in the honey
    market, accounting for of overall honey
    revenue in India. For the financial year 2015,
    Daburs revenue from honey totaled to INR
    million. On the other hand, new entrant PAL has
    managed to seize of market share, with
    revenues been evaluated at INR million in
    FY2015. The unorganized manufacturers accounted
    for a share of , amounting to INR million
    during the same period.
  • The revenues from the toothpaste market increased
    from INR million in FY2010 to INR million in
    FY2015, accounting for a CAGR of during the
    same period.
  • The market offers huge potential as penetration
    and per capita consumption of oral care products
    are very low in domestic market.
    Colgate-Palmolive has emerged as the leader in
    the toothpaste segment with a market share of
    and revenues evaluated at INR million in
    FY2015. PALs toothpaste offers both dental
    protection and dental beauty.

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The company has managed to clutch a share of
in the toothpaste market, which is a formidable
achievement for PAL since its entry into the
market in late 2012. It has managed to attain
revenues amounting to INR million in FY2015.
The unorganized manufacturers accounted for a
share of in the overall toothpaste market,
accounting for INR million in revenues. New
and innovative product launches have successfully
catered to the consumers changing preferences
which have helped the face wash segment propel
from INR million in FY2010 to INR million
during FY2015. HUL has the highest share in the
face wash segment and accounted for of the
overall face wash industry in FY2015. The
revenues generated by HUL for their face wash
segment amounted to INR million. Himalaya Drug
Company trails behind HUL with a market share of
and revenues totaling to INR million. With
less than two years since its entry in the
personal care segment, PAL has managed to garner
market share, accounting to INR million in
FY2015. The unorganized manufacturers garnered a
share of share in revenue in the face wash
segment and accounted for INR million in
revenue. Revenues from the instant noodle market
dropped from INR million in FY2015 to INR
million in FY2016. The revenues of the instant
noodle segment grew at a CAGR of from FY2011
to FY2016.
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Nestles Maggi noodles obtained a market share of
in the overall instant noodles segment in
FY2016, with revenues of the company decreasing
to INR million in FY2016. ITCs yippee noodles
market share increased to in FY2016, with
revenues totaling to INR million. PAL had
managed to acquire a share of in the instant
noodle market and this can be attributed to its
late entry into the market. Hence, it has managed
to attain INR million in revenue from the
instant noodle market. The unorganized players in
the instant noodle segmented accounted for a
share of in the instant noodle segment,
accounting for million in revenues. The
revenue from the biscuits and cookies market
increased from INR billion in FY2010 to INR
billion in FY2015, achieving a CAGR of during
the same period. Parle has managed to remain the
market leader for many years with a share of
in the overall biscuits and cookies market. The
company has earned INR billion from the sale of
its biscuits and cookies in FY2015. Britannia
trails behind Parle with a market share of ,
amounting to INR million in revenues in
FY2015. PAL accounted for a mere market
share, which generated INR million in revenue in
FY2015. The unorganized manufacturers of
biscuits and cookies accounted for of the
overall market, amounting to INR million during
the same period. The revenues from the hair oil
segment increased from INR million in FY2010
to INR million in FY2015, achieving a CAGR of
percent during the same period. Marico has
been the most dominant player in this market due
to its famous coconut oil that has appealed to a
vast majority of Indian customers.
8
Due to this, it has seized a share of in the
overall hair oil market with revenues amounting
to INR million in FY2015. Marico has not faced
much competition in this segment as its
competitor Dabur and Emami have only garnered a
shared of and respectively. PALs late
entry into the hair oil segment has resulted in
its share in the overall market and revenues
amounting to INR million in FY2015. The
unorganized manufacturers of hair oil accounted
for of overall market revenue, amounting to
INR million during FY2015. The revenues for
PAL is projected to increase from INR billion
in FY2016 to INR billion in FY2018 and will
further double to INR billion by FY2020. While
the revenues from the FMCG market is expected to
grow at a CAGR of to, revenues from PAL is
anticipated to grow at a CAGR of from
FY2016-FY2020. PALs personal care and grocery
products are expected to contribute approximately
to overall revenue by FY2020. While the
revenues of PAL continue to achieve formidable
growth, its increasing expenditure on marketing
and advertising (INR million) coupled with its
rising administration expenses will result in
lower growth rates in the future as compared to
the previous five years. PAL has proposed the
launch of 250 mega stores in tier-1 and tier-2
cities which will also sell only Patanjali
products. Cow Ghee, Shampoo, Biscuits, Noodles,
Honey, Dental Cream and Aloe Vera cream are
projected to be the best selling products and
contribute the most to the overall revenues of
the company.
9
The increasing demand for cow ghee is expected to
continue in the future, especially from the north
and west region of the country. It has been
forecasted that cow ghee will contribute - to
PALs overall revenue in FY2020. Future
projections indicate the increase in revenue
contribution by honey to PALs overall revenue to
- by FY2020. The rising demand from
metropolitan cities and new variants of honey is
expected to boost the revenue from the sale of
honey in the future. Patanjali plans to increase
their production capacity of amla juice from
6,000 to 8,000 liters per hour in order to meet
the increasing demand for their fruit juices. It
has been projected that the fruit juice segment
will contribute to Patanjalis overall revenue
by FY2020. Future estimates indicate the share
from the sale of chyawanprash to PALs overall
revenue to range from - by FY2020, due to
the narrow target population and the low
consumption per individual (1-2 tablespoon per
day). It has been estimated that the biscuit and
cookies segment will contribute - to PALs
overall revenue by FY2020. The cream biscuits
will be priced higher than the non-cream biscuits
in order to target the middle and upper class
population. It has been estimated that of
PALs overall revenues will arise from the sale
of candies by FY2020. Future estimates indicate
the growth in this category, however, it has been
forecasted that toiletries will contribute -
to Patanjalis overall revenue. Hair oil and
Patajalis shampoo are expected to boost the
revenues generated from the hair care segment and
is projected to contribute - to Patanjalis
overall revenue by FY2020.
10
Companies Cited in the Report List of Companies

Companies Covered in the Report
Dabur
Major Players

Kashmir Apiaries Apis Group
Colgate-Palolive HUL PG Himalaya Drug
Company Johnson and Johnson Loreal Zydus
Wellness Nestle ITC Nissin Capital Foods Parle
Britannia Kraft Foods Surya Food and Agro
Ltd Marico Emami Bajaj
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Key Factors Considered in the Report Company
Overview of Patanjali Ayurved Limited Value Chain
Analysis for Patanjali Ayurved Limited Financial
and Operating Performance For Patanjali Ayurved
Ltd. (PAL) Consumer Profile for Patanjali Ayurved
Limited Best Selling Products and Market Share
for Patanjali including Face Wash, Honey,
Toothpaste, Instant Noodles, Biscuit and Cookies
and Hair Oil Competitive Landscape for Patanjali
Online Sales Financial Performance of Patanjali
Ayurved Limited Expected financial Performance of
Patanjali Ayurved Limited To know more on the
Patanjali Ayurved Limited, click on the
following link https//www.kenresearch.com/consum
er-products-and-retail/cosmetics-and-personal-care
/patanjali-company-report/39455-95.html Contact
Ken Research Ankur Gupta, Head Marketing
Communications query_at_kenresearch.com 91-124-42302
04
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