1. Baba Ramdev’s Patanjali Ayurved getting its game right, says Nomura

Baba Ramdev’s Patanjali Ayurved getting its game right, says Nomura

We had earlier pointed out that while Patanjali Ayurved Limited (PAL) was expanding into newer categories, the company still faced a multitude of issues.

By: | Updated: March 3, 2017 1:01 PM
Patanjali Ayurved Limited, PAL, demonetisation, premiumisation  strategy, retailers, Dabur India, Emami, Retail Business, Retail in India, Indian Retailers We had earlier pointed out that while Patanjali Ayurved Limited (PAL) was expanding into newer categories, the company still faced a multitude of issues. (Source: PTI)

We had earlier pointed out that while Patanjali Ayurved Limited (PAL) was expanding into newer categories, adopting a premiumisation strategy and widening its distribution reach, the company still faced a multitude of issues. Supply issues, resulting in working capital woes for retailers, plagued most PAL outlets across the country.

However, demonetisation does not seem to have dented demand for Patanjali products and new launches from competitors don’t seem to be impacting them much either.

The company has identified key products in demand and are ensuring sufficient inventory of these products with retailers. Company margins per se have not increased over the same period. PAL continues to adopt a premiumisation strategy in select categories. While each product still promises the use of natural ingredients in its constitution, better packaging and ingredients that are more expensive warrant a price increase, in our view. Besides, the company is also extending its brand ranges.

We came away positively surprised after visiting PAL stores, and are of the view that the company is now getting its game right – it already had the demand, and now is meeting that demand adequately, going more premium and reaching newer consumers every day. We would like to keep a watch out for the company’s strategies going forward, and see competition toughening up for Dabur India (DABUR IN, Neutral) and Emami (HMN IN,Buy).

  1. R
    Rana Gopal
    Mar 3, 2017 at 9:26 am
    There is no issue for Patanjali. Issue is for anti-Hindu media.
    Reply

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