The scorching sales growth of Patanjali has kept other FMCG players on their toes. But dairy product company Parag Milk Foods does not see Patanjali as a threat.
Instead, the Pune-based diversified dairy company, which manufactures and markets Gowardhan brand of cow milk-based ghee, says that Patanjali’s growth has helped its business grow.
“Recently what we have been observing that people are moving from loose unbranded, blended ghee to cow’s milk ghee and that will help us along with Patanjali,” Bharat Kedia, CFO at Parag Milk Foods, told NDTV Profit. (Watch)
Ghee based on cow’s milk is generally priced at a premium to ghee made from buffalo milk.
Parag Milk Foods said Patanjali’s ghee does not have a price advantage compared to its product.
“The price of ghee of Patanjali is similar, sometimes higher than ours and therefore we have not seen price advantage that they had and therefore we believe the real value of cow’s milk ghee is well established by the fact that Patanjali comes in and places to the market at a price similar to our cow ghee,” Mr Kedia said.
Parag Milk Foods has posted a CAGR (compound annual growth rate) revenue growth of 17 per cent in past five years compared to 12-13 per cent growth of the industry, said Mr Kedia.
Parag Milk Foods, which reported its Q4 earnings on Friday, witnessed 20 per cent growth in its revenue for the January-March quarter at Rs 414 crore. The company has also witnessed 120 basis points increase in its operating margin in the March quarter to 9.7 per cent.
Parag Milk Foods’ shares have rallied nearly 22 per cent since its debut in May.