One can appreciate the reasons for Balkrishna’s confidence. Think ayurved and the company occupies what everybody knows about but few manage – the top of the mind recall – and this happened like a bolt from the blue. The company closed the last financial year with Rs 10,000 crore in sales.
Acharya Balkrishna dons many hats. As Chief Executive Officer, he tells us Patanjali Ayurved aims to double its sales turnover in FY18. The next moment, he picks up his phone to give directions to his supply chain people while enquiring about an app the company is working on. He is a doctor the moment he hangs up -- attending to a patient accompanied by an IAS officer. He then gives a cursory look to our list of questions before dropping it to say, “Jo poochhna hai, poochhiye (Ask whatever you want to ask).”
One can appreciate the reasons for Balkrishna’s confidence. Think ayurved and the company occupies what everybody knows about but few manage – the top of the mind recall – and this happened like a bolt from the blue. The company closed the last financial year with Rs. 10,000 crores in sales.
“Our plan was to double our sales this year. But if not double, we will definitely be around that figure,” Balkrishna says in the half-hour-long interview at the company’s headquarters in Haridwar, Uttarakhand. Company officials say that GST implementation would be to blame if the target were not reached.
Remind Balkrishna about a CLSA report a few years back titled ‘Wish you were listed’ and ask if the time for the company’s initial public offering has come, and he candidly rules out an IPO for now. He doesn’t want to give up on the fun he and his company are having giving the rivals sleepless nights.
“If we go for an IPO, it is natural for an investor to expect returns on his investment. If we don’t meet his expectations and sentiments, we would end up hurting them. And if we meet them, we may face difficulty in having the peace with which we are doing our work, the fun and the free spirit with which are carrying out our work. That’s what we feel and hence there is no plan for an IPO,” he says as he elaborates on reasons to keep the company private.
He says the company targets a margin of 10 percent even as it sells some products at a loss. “Our expenses are little. That’s the sentiment with which we work,” he says.
The company recently got into recruiting and providing security staff. And soon we shall see Patanjali jeans. It is selling bottled water also. The jokes these days talk about Patanjali making phones and planes. A natural question then arises: Is Patanjali’s brand getting diluted?
Balkrishna has this to say: “Our focus area is not just on jeans but on every item of clothing, every item of Indian clothing. Our aim is not to make jeans but to cater to the farmer who grows cotton. Cloth is very cheap but once it gets branded, it becomes expensive. There is a big difference between the actual price of the cloth and the final retail price. To remove that gap is our work. So whatever is good for the society, I believe if we do that in the right manner, the brand will not get diluted.”
Big forays require big money -- the company is investing anywhere between Rs. 4,000 crores and Rs. 5,000 crores in the current financial year alone. It is setting up a special economic zone at Nagpur in Maharashtra. It is also setting up plants at Tezpur in Assam, Indore in Madhya Pradesh and Noida in Uttar Pradesh. The current capacities at Haridwar are also being expanded.
In the age of babas and in the case of Patanjali, with an omnipresent brand ambassador like Baba Ramdev, controversies can’t be far behind. The company has its devoted patrons and at the same time, some who question its modus operandi and explain away its success by ascribing it to proximity to the government. Balkrishna gives a middle-of-the-road answer.
“We have taken no benefit of any form whatsoever from the government nor do we want (to). We are thankful to the government as we have faith it will not work against us, the government will not intentionally, nor in a conspiratorial manner, ever work against us because this is about the country. The government understands our work,” he says.
What about the products, every now and then, failing to meet quality standards? Recent reports suggested the company’s salt, besan, amla juice and mustard oil had failed quality tests.
Balkrishna first gives a predictable answer -- “There is a conspiracy, there’s a well-planned strategy to defame an established institution” -- but then backs it up with examples, and adds that there could be “clerical mistakes” which the company would work on to ensure there’s no repeat. The answer has both defence and attack.
He gives an example of one unverified laboratory testing a sample of the company’s amla juice and declaring it unsafe.
“Amla juice anyway does not come under the ambit of FSSAI guidelines because it is a herbal juice. FSSAI guidelines talk about fruit juice. Now based on that report, somebody sent a letter to CSD (army store) canteen. They said they would check and they sent us a letter. Then that was deliberately made an issue. We talked to FSSAI, we talked to CSD people. There was nothing.”
“Sometimes, there are issues with labelling. That should not happen and we will correct that. Small issues are made to sound big. A person thinks the product has failed. There are deliberate plans to stop Patanjali (Patanjali ko roko, Patanjali ko roko),” he says as he goes on to talk about the company’s infrastructure and its contribution to society.
The company claims to run the country’s largest food park. It also has a research unit in Haridwar with a facility to test Ayurveda drugs for cancer on animals. Notably, one of the scientists working at the R&D centre worked in the United States for 17 years and owns a patent for a cancer drug.
“Then people thought what is their set up for research? Recently the Prime Minister inaugurated a large laboratory. More than 300 scientists are working with me, working day and night. We are working at a big level, working at a very deep level,” he says.
He himself brings up an issue that few ask about but confronts Patanjali at its core -- cultivation of herbs and plants to make Ayurveda drugs.
“We are working on research for cultivation. Patanjali is working on a large scale at many levels. If ayurvedic herbs get over, how will the company run? If you are going to mine the herbs, you will also have to grow them. We are focusing on that,” he says.
The company is also planning a big push for online sales. Last year, it tied up with Amazon but has now sewn up agreements with other big online retailers. We will launch a big initiative at a broad national level in time to come, Balkrishna said.
As the pie grows, competitors are bound to jump in and Patanjali's Ramdev now has spiritual competitor Sri Sri Ravi Shankar’s Sri Sri Tattva to contend with in the FMCG market as well. So what does Balkrishna say to that?
“We welcome him. It is a happy occasion for the people as they did not have options earlier. It is good for the people that they have options now. We should leave it to them to decide who to give preference to, what to choose,” he says.Clearly, Balkrishna doesn’t look perturbed. He chides a lady patient, “Exercise nahi karengi, toh theek kaise hongi (If you don’t exercise, how will you get healthy)?” Easy lies the head that wears several crowns – doctor, CEO and acharya.