Patanjali Ayurved Q4 Results: Revenue Declines For Fourth Straight Quarter On Lower Sales

Patanjali Ayurved Ltd.'s revenue fell in the March quarter—the fourth time in a row—on lower sales of consumer goods and ayurvedic products.

The company's overall revenues were partly impacted as sales from its fast-moving consumer goods segment dropped sharply after the company divested the food retail business to one of its subsidiaries in a slump sale in July last year. Its FMCG revenues dipped 53.6% over the previous year to Rs 1,372.86 crore in the March quarter. Sequentially, however, it rose 16%.

Patanjali Ayurved manufactures household and skin care products, while ghee, edible oils, rice, flour, pulses, chyawanprash and others are sold by Patanjali Foods.

After the transfer of its food business to Ruchi Soya Ltd., the management of Patanjali Ayurved told BQ Prime that it has mapped out aggressive export plans to fuel growth.

However, its exports business has also seen a 40% decline over the previous year to Rs 9.87 crore in the fourth quarter. Even sequentially, Patanjali's exports fell 2.56%.

Sales of its ayurvedic products also dropped 22.4% year-on-year to Rs 256.27 crore, according to the company's disclosures. Sequentially, it fell 9%.

Patanjali, which challenged the dominance of multinational companies in the consumer goods segments with its 'herbal' and 'natural appeal', has been struggling with slower growth rate for the past several quarters. Even as Patanjali's sales declined, other companies said that their naturals segment continues to trend higher, despite the high Covid base slowly subsiding.

Dabur India Ltd., for instance, is ramping up its 'naturals' portfolio of food and non-food aggressively, while Colgate is also looking to gain share in the naturals space at Patanjali's expense. An industry executive told BQ Prime that Patanjali's market share has come down to 9.7% from around 12-13%.

"The herbal category is definitely driving growth for us," Mohit Malhotra, chief executive officer at Dabur India, said in a post-earnings call. "But the pace of growth has slowed down because Patanjali's growth has slowed down, not that our growth has slowed down. There are two big players in the naturals category; one is Dabur, and one is Patanjali. As Patanjali's growth slowed, you see a slower growth in the naturals sub-segment."

Colgate-Palmolive India's Managing Director and Chief Executive Officer, Prabha Narasimhan, also said that the natural segment continues to plateau and has even started to decline a little bit. But despite this, she said Colgate's own naturals portfolio, which includes products such as Active Salt, Charcoal and Vedshakti, continued to grow. Between 2016 and 2019, the naturals market grew by 900 basis points. However, since 2020, the growth has flattened and even lost 30 basis points in share in Q1 2023.

In September last year, Baba Ramdev announced that the Patanjali Group plans to list Patanjali Ayurved, Patanjali Wellness, Patanjali Lifestyle, and Patanjali Medicine in the next five years. At present, Patanjali Foods Ltd. is the only group company that’s listed on the stock market.