The sales growth of Ramdev’s Patanjali has come to a grinding halt and the company’s Managing Director Acharya Balkrishna is blaming Prime Minister Narendra Modi’s demonetisation and other economic policies such as the GST rollout.
“We have closed the year around the same level as the previous fiscal year’s revenue,” Acharya Balkrishna, managing director of Patanjali told Mint. He added, “Lingering effects of the demonetisation and the implementation of goods and services tax (GST) impacted growth.”
While reacting to the announcement on note ban, Ramdev, a known supporter of the BJP and PM Modi, had applauded the announcement on demonetisation saying that it will expose a scam of Rs 3-5 lakh crore.
The company had reported rapid growth in the recent past. Ramdev predicted last year that he would continue to “double revenue every year” to cross Rs 20,000 crore in the year ending March 2018. He had also predicted that the growth of Patanjali would also cross the annual revenue of India’s largest packaged goods company Hindustan Unilever Ltd by 31 March 2019.
While Balkrishna may blame demonetisation and GST for the company’s sales growth to plateau, experts believe that quality issues surrounding Patanjali products had also damaged its success story. Sachin Bobade, an analyst with the Mumbai-based Dolat Capital Market, told Mint, “Besides, the company’s distribution and supply chain was not efficient enough to handle the volume. It expanded too fast. Also, there has not been much innovation. The company can’t grow beyond a point riding on just brand Ramdev.”
In February this year, Ramdev’s Patanjali had landed itself in a spot of bother after the Directorate of Revenue Intelligence seized 50 tonnes sandalwood that were being exported to China. Patanjali had later moved the Delhi High Court against the seizure, but the court adjourned the hearing till July.