No business impact on Patanjali Foods due to Patanjali Ayurved misleading ad controversy: Sanjeev Asthana
Sanjeev Asthana, CEO, Patanjali Foods, also shares how the non-food business acquisition will be EBITDA positive for the company, which is likely to be announced in the next few weeks
While Patanjali Ayurved remains caught up in the whirlpool of misleading ads controversy— impacting its reputation and sales, to a certain extent— Patanjali Foods hasn’t seen any sort of negative impact, clarified its CEO, Sanjeev Asthana. Even though one could have assumed that having identical brand names (but diverse businesses) would have had some type of detrimental effect.
While speaking to CNBC-TV18, Asthana also mentioned the company’s target of maintaining a revenue growth rate of 8-10 percent for FMCG business, for the fiscal. The company's food and FMCG segment achieved its highest quarterly revenue in Q4 of FY24. Mainly into edible oils, the company on Tuesday, reported a 21.8 perent year-on-year (YoY) slide in net profit at ₹206.3 crore for the fourth quarter that ended March 31, 2024. Patanjali Foods’ board has formed a committee to consider the proposal for the acquisition of the non-food business of Patanjali Ayurved. In an exchange filing last year, the board of directors of Patanjali Foods discussed the initial proposal received from Patanjali Ayurved.
Asthana shared that the announcement will soon be made and that the due diligence is going on. “It's going to be extremely EBITDA accretive, very positive for the company’s overall consolidation of the FMCG portfolio. We are hoping that the high-margin products that it has and some of the most solid brands in its category will be beneficial for us”. The non-food biz includes categories such as home care, personal care, dental care, and skincare.
For now, Patanjali Foods’ food and FMCG accounts for 33 percent of the total revenues. Once the non-food business comes in, there could be an upward addition between anywhere 35-50 percent, he mentioned.
