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“We are striving to reach double digit EBITDA consistently on a consolidated overall basis for the company,” says Sanjeev Kumar Asthana, CEO,


Can you explain the transaction which is now happening? All businesses are emerging with Ruchi Soya?
Patanjali Ayurved has a very large portfolio of food business. Last year, it did a revenue of almost Rs 4,100 crore plus which is growing at 15% to 25% year on year for the last several years. They have got several marquee products which are sold under Patanjali brand name like cow ghee, staples and various products in the staples category. Edible oils like mustard oil, etc, are like to sell at a very high premium.

Beverages like aloe vera juice and amla juice, etc, which have become very popular and basically eight product categories, herbal products like chyawanprash and honey. There is a revenue base of Rs 4,100 crore plus and EBITDA which runs into 15-20% consistently. This year the EBITDA will be about Rs 650 crore plus.

The transaction has been done on a slump sale basis which is basically the fair market value of the assets in the business. The board has approved paying consideration of Rs 690 crore and that business is now moving into Ruchi Soya and is subject to shareholders’ and other regulatory approvals. The transaction is now approved by the board. Now we will seek shareholders’ nod and the other necessary approvals and we are expecting their business to come to Ruchi Food in a very quick time now.

What is the size of the company in terms of EBITDA potential?
I am not at liberty to disclose the final numbers which we will probably be declaring in next one week. But in general, the expectation is we should be closer to around Rs 2,500 crore of EBITDA with the food business coming in on an annualised basis. That is something we are expecting. It would do better but this whole process of consolidation and digesting the change and absorbing it into the business will take its own time. We are expecting about Rs 2,500 crore in fullness of time at the end of FY23.

How do you see the potential of growth because at the time of FPO, you indicated that the opportunity set is very large. How much is the aspirational growth of all the businesses under this hood now?
I am looking at growing the food businesses by 15- 20% year on year. The edible oil business shall grow 5-10% which is the secular growth in the segment itself and some of the other categories like oil palm, etc, will have longer term tenure in terms of the growth. But broadly, on a weighted average basis, Ruchi Soya should accomplish 10-15% growth and that in four years’ time should take us closer to being a Rs 40,000-50,000 crore business.

The second point is that the FMCG component of the business will now double with the infusion of the Patanjali Food portfolio and in terms of the proportion of edible oil versus non-edible oil, we should now be closer to 20% and in fullness of time we want to take it to 50-50.

Am I getting it right that the profitability profile of the company undergoes a very big change because edible oil beyond a point is a commodity business? Sure growth is there but it operates at a very low margin, whereas the full consumer foods business has a better margin profile and that completely goes through overall with this transaction?
Absolutely, the whole idea is to bring in the businesses which are falling under pure play FMCG and which can generate 15% to 20% margin under one bucket and then one can bank it up with more revenue driven edible oil. Broadly we are striving to reach double digit EBITDA consistently on a consolidated overall basis for the company. That should be very positive for the business and the whole idea is not only the quality of business that you do, but the quality of profits and consistency is going to be a big driver of that growth.

Is Patanjali looking at some more listings under the hood because Patanjali Ayurveda has a lot of other businesses as well? Is there anything which Ruchi Soya shareholders can also benefit from or these are two separate entities completely?
It is not on the cards. I think we will have to wait for that event to occur because Patanjali Ayurveda is quite a large company on its own and they have got a very large portfolio of non-food FMCG and several other ayurvedic medicinal herbal products etc.

From a cross-holding perspective, perhaps that is not on the cards right now but Patanjali is a large company and will organise and reorganise themselves and how they are going to go about it and build their own business. One more thing which the board approved today and which it had already announced earlier to the media as well as to the exchanges is converting the name of Ruchi Soya to Patanjali Foods Ltd.; We already have the ROC approval now we are going to go in for the shareholders; approval and we are expecting that process to get completed at the earliest. The company will be renamed Patanjali Foods, which is more reflective of the character and nature of our business right now because the soya component is increasingly lesser.

So both the name change as well as business change will be very transformational in the way this entire thing is going to go now.

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