While Ramdev has set an ambitious target of taking Patanjali Group’s revenue to over Rs 50,000 crore in five years, he is well aware of the challenges ahead. However, unlike earlier, when it had resorted to carpet bombing with dozens of new launches, Patanjali will now focus on organising its house.
Instead of going for a new venture, as soon as the last one is closed, Patanjali will optimise its production and sales with its existing capacity. It will try and expand market share in the categories it is already present in, he said. Patanjali’s desperate beat for Ruchi Soya
is not without a rationale as it will play a key role in the group’s future. “A group of naysayers was told by MNCs to portray a negative picture that Patanjali will lose the bid (for Ruchi Soya). But we managed to acquire it anyway,” he said.
The plan is to unlock the firm’s potential. Owing to surging expenditures, Ruchi Soya
failed to pay its creditors in recent years, while its top line dwindled – falling from a high of Rs 28,411 crore in 2014-15 to less than Rs 13,000 crore last year. Scaling its business back to the earlier level will further take the Patanjali Group closer to its target.
According to Ramdev, Ruchi Soya
is likely to grow three times faster than Patanjali Ayurved.
Leveraging Ruchi Soya’s wide distribution network will be in focus. Currently, the firm’s products reach is over 1.1 million outlets through 5,000-odd distributors. “Its distribution network is a big gain for us”, said Lalit Pophale, an advisor to Patanjali Ayurved’s board of directors. By expanding distribution, Patanjali plans to make its products available to 500 million consumers by 2025 from 200 million now.
Moreover, to cut costs, Patanjali aims to bring down the share of imports in Ruchi’s portfolio by increasing local procurement. Failing to cut expenses has been a major dampener for Ruchi Soya’s earlier management. Between FY16 and FY18, its net loss grew fourfold to Rs 5,573 crore.