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No matter if ‘fashion has a new address’ on the internet, 95% of the retail market still depends on brick and mortar stores. According to Technopak, the offline retail is about $625 billion in 2017, of which, $60 billion counts for fashion, including home textiles and footwear. And this is the chance, <keyword id="49454" type="COMPANY" weightage="20" keywordseo="Biyani">Biyani</keyword>’s <keyword id="44949" type="CITY" weightage="100" keywordseo="Future-group">Future Group</keyword> is betting on. The online world of fashion, which is buoyed by the discount games, has taken a back step with strong contenders in the offline field including FBB (Fashion @ <keyword id="6357823" type="COMPANY" weightage="20" keywordseo="Big-Bazaar">Big Bazaar</keyword>), <keyword id="6359480" type="PERSON" weightage="20" keywordseo="Aditya-Birla">Aditya Birla</keyword>’s Pantaloons and Landmark’s Max. "If you have a fresh design, you don't need to sell it at a discount. Margin gets better and you get more buyers for fresh stock - this virtuous cycle has helped FBB become big over the last few years. "They have created FBB from scratch and leveraged the massive distribution network of Big Bazaar to sell it” <keyword id="1106836" type="PERSON" weightage="20" keywordseo="Abneesh-Roy">Abneesh Roy</keyword>, senior vice-president, institutional equities, Edelweiss Securities told the ET. Here’s how Biyani is rebuilding the retail empire While Pnataloons as a fashion brand was close to Biyani’s heart since its inception in <keyword id="6354925" type="COMPANY" weightage="20" keywordseo="Kolkata">Kolkata</keyword> 20 years back, he had to part ways in 2012 to meet some debt. While Pantaloons is flexing its muscle ever since it was handed over to Aditya Birla <keyword id="45472" type="ORGANIZATION" weightage="20" keywordseo="Group">Group</keyword>, Biyani found a strong footing with Future’s own private label brands along with the licensed ones. For that matter, with its 58 standalone outlets and 237 Big Bazaar stores, Future has licensed brands like Lee Cooper, Buffalo and Bare that have become synonymous with it. Going by the numbers, the Future Group has private labels that account for 95% of revenue of FBB, which comes under Future Retail, and 40% of Future Lifestyle Fashions (FLF), the fashion arm of the group. Future Group is zooming at a pace, which is well appreciated by its rivals. “Kishoreji is a fabric fashion garment man who started his innings way back in 1987 with a local brand. His fashion experience and understanding is unmatched,” <keyword id="162214" type="PERSON" weightage="20" keywordseo="Govind-Shrikhande">Govind Shrikhande</keyword>, MD of Shoppers Stop told Economic Times.

This is how Future Group is regaining the ‘King of Fashion’ in India status

Advanced talks about acquiring the retail business of <a href="http://www.businessinsider.in/searchresult.cms?query=Heritage+Foods&amp;sortorder=effectivedate">Heritage Foods</a> are being done by <keyword id="44949" type="CITY" weightage="100" keywordseo="Future-group">Future Group</keyword>. According to people aware of the development, this deal would provide <a href="http://www.businessinsider.in/searchresult.cms?query=Kishore+Biyani&amp;sortorder=effectivedate">Kishore Biyani</a> a sway over a network of more than 100 grocery outlets in <a href="http://www.businessinsider.in/searchresult.cms?query=Hyderabad&amp;sortorder=effectivedate">Hyderabad</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=Chennai&amp;sortorder=effectivedate">Chennai</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=Bengaluru&amp;sortorder=effectivedate">Bengaluru</a>. 
 This would be Biyani’s fourth acquisition in many years, if this deal completes, as his Future <keyword id="45472" type="ORGANIZATION" weightage="20" keywordseo="Group">Group</keyword> consolidates its position, especially in grocery retail. 
 "Contours of the deal are still being worked on - how <keyword id="2801764" type="ORGANIZATION" weightage="20" keywordseo="Heritage-Fresh">Heritage Fresh</keyword> will be merged within Future Group and whether the transaction could involve any share swap, apart from cash component," an expert, who wants to remain anonymous, told ET. 
 <keyword id="279628" type="COMPANY" weightage="20" keywordseo="Heritage-Foods">Heritage Foods</keyword> operates more than 115 Heritage <keyword id="5718" type="COMPANY" weightage="20" keywordseo="Fresh">Fresh</keyword> stores of 2,500 square feet each on average, serving more than two million customers every month in the three southern cities. 
 
“The company had hired <a href="http://www.businessinsider.in/searchresult.cms?query=KPMG&amp;sortorder=effectivedate">KPMG</a> to advise it on a search for a strategic partner or investor for its retail business,” Dharmender Matai, COO for retail and bakery at Heritage Fresh, told ET. 
 
Biyani will take the Future Group's total store count to more than 850 outlets including the Heritage Fresh chain. 
 "Apart from pushing its own label, the deal will also help the company operate a bigger network of stores that will come handy for bulk sourcing and, in turn, more bargaining power to squeeze extra margins from consumer product companies, so his consolidation strategy is a smart move," <keyword id="1106836" type="PERSON" weightage="20" keywordseo="Abneesh-Roy">Abneesh Roy</keyword>, senior vice-president at <a href="http://www.businessinsider.in/searchresult.cms?query=Edelweiss+Securities+&amp;sortorder=effectivedate">Edelweiss Securities </a>told ET. 
 
In many southern cities, the supermarkets contributes to about 25%, indicating growing acceptability of modern store formats, while modern trade accounts for about 10% of overall consumer goods sales. 
 
The strategic buyout will make the Future Group look more attractive to the foreign investors. 
 
India allowed total FDI in brick-and-mortar as well as online retailing of food that's locally sourced and produced, in June this year. However, foreign retailers are not very comfortable with it and are saying that food-only stores won't be viable and non-food general items should also be allowed in such shops.

Kishore Biyani, Indian retail’s original
rockstar at it again. His Future Group is buying Heritage
Fresh

Encouraged by volume growth, margin improvement and recovery in rural sales, India's top fast-moving consumer goods (FMCG) companies are now back to their normal growth cycle as they step up investments as well as spending on advertising and marketing. <keyword id="84065" type="General" weightage="20" keywordseo="fmcg-companies" source="Orion">FMCG companies</keyword> are chasing volume growth again after a gap of a few quarters, offering higher grammage and price cuts thanks to inflationary pressures softening on key raw materials for everything from soaps to food items. Hindustan Unilever (HUL), Dabur, Marico, Godrej Consumer Products, ITC, Tata Consumer Products and Nestle reported volume recovery in the March quarter and said they expect a gradual pickup in consumption in FY24. "The prospects of a sustained recovery have strengthened. After five quarters of volume decline, the sector has posted volume growth," Marico MD and CEO Saugata Gupta said in the company's earnings conference call. "Urban consumption has been steady while rural is showing some convincing signs of having bottomed out." Foods continue to drive growth for the sector, while the home and personal care segment also entered positive territory after an extended slowdown. Marico, which owns popular brands like Saffola, Parachute and Livon, reported an 18.7 per cent increase in its consolidated net profit to Rs 305 crore for the fourth quarter ended March 2023 while sales rose 3.65 per cent to Rs 2,240 crore, driven by single-digit volume growth and moderation in commodity prices. HUL said rural areas have shown improvement with higher value growth sequentially. While HUL's volumes continue to fall, the extent of decline has reduced versus last quarter. "The slowdown in the FMCG market is bottoming out. This improvement was led by volumes, which have turned flat in this quarter, versus a mid-single-digit decline in the December quarter," said HUL CFO Ritesh Tiwari in its earnings call. The makers of popular brands such as Rin, Lux, Surf Excel and Pond's said it expects the price-volume growth to rebalance further. "We expect volumes to recover gradually due to high levels of cumulative inflation and the fact that consumption habits typically recover with a lag," he said. For the March quarter, HUL reported an increase of 12.74 per cent in its consolidated net profit to Rs 2,601 crore. Net sales rose 10.83 per cent to Rs 14,926 crore. However, HUL warned the near-term operating environment is likely to remain volatile due to global slowdown risk and uncertainty related to weather phenomena like El Nino and heatwaves. Abneesh Roy, Nuvama Group Executive Director for Institutional Equities, said the outlook for the <keyword id="495979" type="General" weightage="20" keywordseo="fmcg-industry" source="Orion">FMCG industry</keyword> was "positive" with volume growth and improvement in margins for most companies in FY24. "As raw material prices are cooling off, companies shall start paring prices via grammage increase or gradual price reductions. Price growth shall ease while volume growth will improve," he said. Roy also cautioned about the impact of El Nino and the "aggression" from billionaire Mukesh Ambani-led Reliance Industries Ltd, a known disrupter, which aims to be a big player in the USD 110-billion FMCG segment. Meanwhile, Godrej Consumer reported an 11.47 per cent increase in its India revenue to Rs 1,822.92 crore in the March quarter. This was led by volume growth of 11 per cent. Its home care segment, which consists of household insecticides and air fresheners, grew 14 per cent and 17 per cent, respectively. "We expect to build on the current momentum and deliver volume-led growth along with upfront marketing investments and improvement in profitability," said its Managing Director and CEO Sudhir Sitapati. Britannia Executive Vice-Chairman and Managing Director Varun Berry also expressed optimism. "Volume growth will be certainly much better than this year," he said. On commodity prices, Berry said there is deflation in prices of palm oil, laminates and corrugated material for packing but flour and milk prices are soaring. "There are certain brands and certain packs where we have already initiated price reductions or promotions," he said. In the March quarter, Britannia reported a 47.53 per cent jump in consolidated net profit to Rs 557.60 crore. Its revenue from operations rose 10.93 per cent to Rs 3,892.02. Similarly, Dabur reported volume growth of 11 per cent during the March quarter and 14 per cent for FY23. Its quarterly net profit was Rs 292.76 crore and revenue from operations stood at Rs 2,677.8 crore. "Despite near-term concerns around inflationary pressures, we plan to accelerate the growth momentum by continuing to invest in brand building, innovation, and capabilities that will drive growth," said Dabur India CEO Mohit Malhotra. Other companies also recorded growth. ITC's revenue from the FMCG segment rose 19.34 per cent to Rs 4,951.17 crore from Rs 4,148.62 crore while EBITDA jumped 76 per cent. Nestle, the maker of Maggi, Kitkat and Nescafe, reported an increase of 24.69 per cent in its net profit to Rs 736.64 crore in the March quarter. Sales rose 20.43 per cent to Rs 4,808.40 crore. Tata Consumer reported a 21.12 per cent rise in its consolidated net profit to Rs 289.56 crore. Its revenue from operations was up 13.96 per cent at Rs 3,618.73 crore. Tata Consumer said it recorded growth in the India beverages business and food. It had a "strong margin growth and strong topline growth driven both by volume and price," the company said in its earnings call. "We have started seeing volume growth coming back. The impact of inflation and monetary tightening on economic growth and demand seems to be slowing down, but I would keep my fingers crossed and monitor it closely," said Tata Consumer MD and CEO Sunil D'Souza. "In the near term, we are seeing stability." SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/zomato-net-loss-narrows-to-188-crore-in-q4-revenue-rises-70-yoy/articleshow/100358894.cms">Zomato net loss narrows to ₹188 crore in Q4, revenue rises 70% YoY</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/mankind-pharma-pnb-among-stocks-to-become-largecap-from-midcap-mutibagger-rail-vikas-nigam-to-turn-midcap-from-smallcap/articleshow/100356527.cms">Mankind Pharma, PNB among stocks to become largecap from midcap; mutibagger Rail Vikas Nigam to turn midcap from smallcap</a>

FMCG makers expect sustained recovery in volume and margins with price reduction in FY24

<ul><li>Shares of <keyword id="141413" type="General" weightage="20" keywordseo="zee-entertainment-enterprises" source="Orion">Zee Entertainment Enterprises</keyword> gave 40% returns in one trading session and today the stock is up 4% as analysts turn positive on the stock.</li><li>Analysts believe resignations of independent directors have brought back investor confidence and triggered the stock for good.</li><li>Moreover, talks of potential takeover of the company have also added to the optimism around the company’s stock.</li></ul>After resignations of two independent directors, thousands of investors picked up <keyword id="51166" type="General" weightage="20" keywordseo="zee-entertainment" source="Orion">Zee Entertainment</keyword>’s stock, on Tuesday, including marquee investor Rakesh Jhunjhunwala. This is because resignations of independent directors brought focus back to the company's growth and an end to concerns over corporate governance. Moreover, <a href="https://www.livemint.com/companies/news/zee-entertainment-stock-surges-on-takeoverhopes-11631646395943.html">talks </a>of potential takeover of the company have also added to the optimism around the company’s stock. Post the resignations, several brokerages that were negative on the stock or had recommended a sell or reduce rating turned positive. This sudden change in the investor mindset boosted the company's stock by 40% in one trading session. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Brokerages </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Stock rating </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Dolat Capital </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">BUY </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Kotak Institutional Equities </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">BUY </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Deen Dayal Investments </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">BUY </td></tr></tbody><tbody></tbody><tbody></tbody></table> All this, after the broadcaster’s largest shareholder Invesco, which holds 7.7% stake in the company, demanded resignation of Ashok Kurien and Manish Chokhani along with that of the managing director Punit Goenka. This was followed by a report from proxy advisory firm Institutional Investors Advisory Services (IIAS) that highlighted concerns over the managing director’s increasing salary and asked shareholders not to vote for re-appointing independent directors Ashok Kurien and Manish Chokhani on the company's board. <a href="https://www.business-standard.com/article/companies/invesco-seeks-egm-to-remove-punit-goenka-from-zee-entertainment-board-121091301555_1.html">Reportedly</a>, Punit Goenka’s salary was increased by 46%, higher than what was approved by shareholders in the 2020 annual general meeting. At the same time, employees were not given any raise for FY21. "We have persistently highlighted in our notes of potential change in management, improvement in cash flows and traction in digital business as key re-rating triggers. With one of the key triggers getting activated we upgrade our target multiple from with the target price of ₹328 (vs. ₹204 earlier) and rating to BUY (from Reduce)," said Dolat Capital according to media reports. Zee Entertainment Enterprises may attract more investors if the concerns raised by Invesco get addressed, said Abneesh Roy of Edelweiss Securities in an interview with CNBC-TV18. However, Roy thinks Zee shares going back to ₹600 apiece currently looks difficult as volatility continues, while valuation re-rating will happen and shares will go beyond the target price of ₹343. He expects further improvement in market share for Zee next quarter onwards. Karan Taurani, senior vice president-research analyst, Elara Securities said that if the new management does come in, we do see a re-rating trigger here, which means stock price would rise. “Looking at the peer comparison in terms of growth and valuations, Zee as a company has not done that bad. The performance metrics have deteriorated in the last two and a half to three years because they would always outperform the industry growth rate but now, they are coming almost at par with the industry growth rate,” said Taurani. Analyst Jaykumar Doshi at Kotak Institutional Equities has upgraded the stock to BUY (from REDUCE). “Zee’s valuations have been constrained by governance concerns and structural risks. The market has ascribed negative value to ZEE5 due to a lack of confidence in the management. Irrespective of how this plays out, we expect a re-rating,” he said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/these-stocks-that-are-into-clean-and-renewable-energy-supporting-the-climate-change-wave/slidelist/86220985.cms">5 multibagger stocks that are into clean and renewable energy supporting the climate change wave</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/government-picking-up-a-stake-in-vodafone-idea-might-be-a-remedy-worse-than-the-disease-say-experts/articleshow/86221662.cms">Government picking up a stake in Vodafone Idea ‘might be a remedy worse than the disease’, say experts</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/retail/news/long-before-mukesh-ambani-set-his-eyes-on-the-millions-of-mom-n-pop-stores-a-bunch-of-e-commerce-startups-were-preparing-the-ground-they-are-now-getting-their-due/articleshow/86220950.cms">Long before Mukesh Ambani set his eyes on the millions of mom-n-pop stores, a bunch of e-commerce startups were preparing the ground ⁠— they are now getting their due</a>

Zee Entertainment good to buy as concerns over corporate governance will be put to bed after management change, say analysts

The <keyword id="6395044" type="ORGANIZATION" weightage="100" keywordseo="Canteen-Stores-Department">Canteen Stores Department</keyword> (CSD), the central authority that runs retail stores for India's defence forces, will get a 50% refund of the goods and services tax (<keyword id="6354679" type="ORGANIZATION" weightage="100" keywordseo="GST">GST</keyword>) paid from the states and the Centre. The decision has come after CSD suspended orders this month to avoid tax payout disparities before GST launched on July 1. "CSD will pay full GST and 50% of the total tax would be refunded by state and the Centre," said finance minister <keyword id="42575" type="PERSON" weightage="100" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>. CSD, also known as the <keyword id="4450720" type="UNKNOWN" weightage="100" keywordseo="army-canteen">Army Canteen</keyword>, is the largest buyer for several consumer product companies, single-handedly accounting for 5 to 7% of their sales volume. In a letter dated May 31st, CSD had asked all depots to suspend its orders. "In view of the GST implementation, LS (local supply) Orders to be placed for supplies during June 2017 are suspended till further orders," said the letter. As per analysts and industry experts, destocking is taking place so that compliance on transition stocks can be maintained, and that clarity is needed on the matter. "While CSD is an important channel for most FMCG companies, the impact can't be gauged as several companies are trying to convince the trade that they will take the hit on their books," <keyword id="6375566" type="CITY" weightage="100" keywordseo="Edelweiss-Securities">Edelweiss Securities</keyword> senior vice president Abneesh Roy told <a href="http://economictimes.indiatimes.com/news/economy/policy/armed-forces-canteen-to-get-50-per-cent-refund-of-goods-and-service-tax/articleshow/58991547.cms">ET</a>. (Image source SatyaVijayi)

Defence forces canteen to get 50% GST refund

India’s largest consumer goods company is planning to hand out <a href="http://www.businessinsider.in/searchresult.cms?query=lay-offs&amp;sortorder=effectivedate">pink slips</a> in a bid to reduce costs. 
 
The<a href="http://www.businessinsider.in/searchresult.cms?query=HUL&amp;sortorder=effectivedate"> Hindustan Unilever</a> (HUL) is mulling over cutting jobs by 10-15% as its Dutch parent wants to reduce costs across markets. 
 
However, the exact number will be known by the end of April only. In India, HUL employs around 18,000 people across factories and offices. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=unilever&amp;sortorder=effectivedate">Unilever</a> said <keyword id="30690" type="UNKNOWN" weightage="20" keywordseo="Job-cuts">job cuts</keyword> come after they want to focus on increasing its margin targets. 
 
Global CEO Paul Polman committed to the board his strategy to cut costs sharply to protect profitability as it aims to prove that it can deliver growth following its rejection of a takeover attempt by rival Kraft Heinz for 115 billion pounds in February. 
 
"Unilever is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of their shareholders. The results of the review are expected later this month," an HUL spokesperson told ET. 
 
HUL has a five-level management structure, with the CEO at the top. Level four consists of vice presidents, while general managers are at level three. Assistant managers and junior managers or frontline executives make up the remaining two levels. 
 
"With GST implementation, there will be reduction in warehouses and supporting infrastructure, resulting in some job losses. But India is still one of the better-performing markets for Unilever and the restructuring will not be as severe as in other markets," Abneesh Roy, senior vice president at Edelweiss Financial Services, told ET. 
 
With annual net sales exceeding Rs 32,400 crore, HUL contributes about 14% of the parent's emerging markets business, which accounts for about 57% of its total sales.

Hindustan Unilever is planning to cut 10%-15% of jobs to protect profitability

Last fiscal, the number of <keyword id="44863" type="CITY" weightage="100" keywordseo="HUL">HUL</keyword> executives earning eight-digit salaries fell by a quarter, because of slow growth in sales and declining profit. As compared to 169 HUL managers, the number of executives who took home more than one crore as annual salary fell to 129. 
 
"While the year hasn't been great for HUL in terms of profitability, the final payout could have been impacted due to variable pay linked to sales, profit or market share. Also, payout depends on the company's outlook for next year," Abneesh Roy, associate director, at Edelweiss Securities, told <a href="http://economictimes.indiatimes.com/industry/cons-products/fmcg/hindustan-unilevers-crore-plus-salary-club-falls-by-25-per-cent/articleshow/52788472.cms">ET</a>. 
 
In HUL, managers are given an option to defer a part of their bonus and receive a larger amount (higher than what they deferred) based on how the company performed in the following three years. 
 
Last fiscal saw HUL's domestic consumer business posting one of its slowest sales growths of 4%, while adjusted profit after tax rose to 3.5%. 
 
"Our reward philosophy is to ensure our employees are paid market competitive total reward which is in line with our performance culture. The remuneration paid out... is in line with our reward policies and it is inappropriate to do a year-on-year comparison of number of individuals earning above a certain range or the actual remuneration figures given the multitude of variables impacting the same," an HUL spokesperson told ET. 
 
<a href="http://tmhn.org/wp-content/uploads/2015/12/hindustanunilever.jpg">Image source</a>

Number of Hindustan Unilever's annual crorepati employees falls by 25%

Did you know that yoga guru Baba Ramdev, who owns the <a href="http://www.businessinsider.in/Baba-Ramdevs-Patanjali-Ayurved-Ltd-becomes-Indias-biggest-FMCG-advertiser-this-week-leaving-behind-Parle-Cadbury/articleshow/50876928.cms">fastest-growing Indian FMCG company</a> <keyword id="6406649" type="COMPANY" weightage="100" keywordseo="Patanjali-Ayurved">Patanjali Ayurved</keyword>, and <keyword id="669583" type="UNKNOWN" weightage="100" keywordseo="Acharya-Balkrishna">Acharya Balkrishna</keyword>, its MD, aren’t the only ones to be credited for its<a href="http://www.businessinsider.in/Everyone-wants-to-be-a-part-of-Patanjalis-success-as-FMCG-giant-aims-Rs-1000-crore-this-fiscal/articleshow/51682270.cms"> roaring success</a>? 
 
Turns out, <a href="http://www.businessinsider.in/Exclusive-Yogi-by-ChoiceEntrepreneur-by-Chance-Baba-Ramdev/articleshow/49536517.cms">Ramdev </a>has a younger brother Ram Bharat, who although keeps a low profile, but is the one who leads Patanjali Ayurved as the informal CEO. 
 
Ramdev, being a kind of celebrity that he is, serves as the <a href="http://www.businessinsider.in/Is-Patanjali-actually-going-to-displace-traditional-biggies-from-the-market-or-is-it-just-Baba-Ramdevs-charm/articleshow/52075928.cms">face of the company</a>, and Acharya Balkrishna, the firm’s MD, manages the bigger departments of product development and innovation. However, it is Bharat, aged 38, who handles the day-to-day operations, and departments including finance, HR, production and supply chain, while reporting to Balkrishna and Ramdev. 
 
Also read: <a href="http://www.businessinsider.in/Ramdev-mocks-rivals/articleshow/52027530.cms">Weirdest comment of the day - Ramdev Baba says Patanjali will shut the gate in Colgate, make Nestle's bird disappear</a> 
 
"Bharat handles the daily operations and manages most of the running around, and is actually the backend of the company while Baba and Acharya strategise on the company's growth vision," Edelweiss Securities associate director Abneesh Roy told ET. Roy had visited the headquarters of Patanjali nearly four months ago. 
 
However, Bharat believes in coming across as a modest man, not willing to be called the boss. "It's a team work and I am a mere sevak," he was quoted saying. This modesty goes on to the level of him saying no to being photographed, willing to stay as far away from the limelight as possible. 
 
Everything about Ram Bharat, however, hasn’t been away from the public eyes. He has earlier made news when in May last year he was sent to judicial custody for instigating a clash between Haridwar truck union members and guards of Ramdev's Patanjali Food and Herbal Park. The clash had resulted in one person being killed and four others being injured. 
 
However, this didn’t divert his focus from his professional commitment as Patanjali, which has emerged as the <a href="http://www.businessinsider.in/Patanjali-is-taking-over-the-entire-Ayurveda-industry/articleshow/51453997.cms">fastest growing FMCG maker</a> in the country, having achieved the coveted Rs 5000-crore target recently. 
 
<a href="http://static.topyaps.com/wp-content/uploads/2016/05/4-11-1024x597.jpg">Image source</a>

It takes two to tango and three to jive, so who’s the third wheel in Patanjali’s success?

The <keyword id="6355394" type="COMPANY" weightage="100" keywordseo="United-Spirits">United Spirits</keyword> (USL) exited all non-core investments in <keyword id="81868" type="COMPANY" weightage="100" keywordseo="United-Breweries">United Breweries</keyword> and sold 85 lakh shares to <keyword id="81732" type="COMPANY" weightage="100" keywordseo="Heineken">Heineken</keyword>, which will now give it leverage to managing affairs of India's largest beer producer. 
 
USL sold 3.21% shares for Rs 872 crore in a block trade. The shares were sold at Rs 1,030 apiece, a slight premium to Tuesday's closing price of Rs 1,014.10. 
 Now, the Heineken's stake in United Breweries (UB) has increased from 39% to 42.1%. This deal will give Heineken an upper hand over <keyword id="14678" type="PERSON" weightage="100" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> in running the company. 
 
"It clearly shows that United Spirits is going quick on sale of non-core assets. The next target is going to be the IPL cricket team. The company can raise up to Rs 2,000-2,500 crore in the next two years," Abneesh Roy, an analyst at Edelweiss Securities, told ET. 
 
However, Mallya is not in any danger of losing control of his firm as he will continue to hold 37.5% and the two partners will have the same shareholder rights. 
 
But Heineken could dictate company’s business plan as it has higher shareholding. 
 
The exit came after Diageo had asked Mallya to quit as chairman of USL revelations of fund diversion when the company was under his control. 
But Mallya has refused to do so, saying that Diageo took over the company after a thorough due diligence and that it was aware of all facts pertaining to the company's financials. 
 
A person close to USL told Economic Times that the firm was afraid it will lose its rights over these shares if lenders attach these as part of their legal dispute with Mallya over unpaid dues relating to the Kingfisher Airlines bankruptcy. 
 
(Image: Indiatimes)

Kingfisher now belongs to Heineken for Rs 872 cr

The Friday morning <keyword id="6354616" type="CITY" weightage="20" keywordseo="Twitter">Twitter</keyword> had ‘MaggiBan’ trending in a different way. While till date it was the state governments taking decision to ban the instant noodles, it is the first time when <keyword id="75190" type="CITY" weightage="20" keywordseo="Nestle">Nestle</keyword>, the makers of Maggi have officially decided to put their products off the shelves. Having created a lot of hullabaloo over usage of lead in the Maggi Masala above prescribed limit, Nestle’s decision to keep Maggi out of the market is being assumed as an emergency damage control measure. 
 
"The trust of our consumers and the safety of our products is our first priority," the group said in a press statement. 
 "Unfortunately, recent developments and unfounded concerns about the product have led to an <keyword id="6356826" type="COMPANY" weightage="20" keywordseo="environment">environment</keyword> of confusion for the consumer, to such an extent that we have decided to withdraw the product off the shelves, despite the product being safe." 
 
Putting Maggi off the market isn’t enough for Nestle. The Swiss company has asked the local executives in India not to talk publicly about developments. Sources have confirmed The Economic Times, They have been told not to engage directly with stakeholders, trade partners, dealers and distributors without approval. "Any engagement needs to be approved and vetted by the company's legal team only," said one of the officials mentioned above. <keyword id="6356830" type="CITY" weightage="20" keywordseo="Nestle-India">Nestle India</keyword>'s contribution to the Swiss firm's global revenues is barely 1.8%. The Maggi brand contributes about a third of the Indian unit's annual sales of Rs 9,500 crore. "India is an emotional country... the reaction to this issue can't be clinical or detached, which is how it is coming across so far," <keyword id="5645" type="POSITION" weightage="20" keywordseo="CEO">CEO</keyword> of a top multinational consumer goods firm told the ET. The financial daily couldn’t reach Nestle for immediate comment. 
 "This was the fastest growing segment for Nestle over the past few years and was reporting positive volume growth compared to the decline reported by the company's other business segments," Abneesh Roy, <keyword id="150418" type="POSITION" weightage="20" keywordseo="associate-director">associate director</keyword> at <keyword id="6375566" type="CITY" weightage="20" keywordseo="Edelweiss-Securities">Edelweiss Securities</keyword> told the ET. "Hence, in the light of the recent news we downgrade the stock to 'reduce' from 'hold' and rate it sector 'sector underperformer'." 
 
Reviving the brand will involve investing heavily in communications. "Legal costs/promotions will also inch up, which will take a toll on margins," Roy added. 
 (Image: <keyword id="-101" type="COMPANY" weightage="20" keywordseo="India-Times">India Times</keyword>)

#MaggiBan: Nestle discontinues Maggi from the market. Nestle employees keeping mum

<keyword id="6356830" type="CITY" weightage="80" keywordseo="Nestle-India">Nestle India</keyword>, which is recalling Maggi from the market citing customers’ faith has been shaken, now has another issue to struggle with. 
 
The company would not be able to access and recall as much as 35-40% of the total stock across the country as millions of outlets selling Maggi are outside the company's direct network. 
 
Nestle directly reaches around two million outlets where it sells products through its own distributors or wholesalers. But, according to a data by market researcher Nielsen, the company’s products reach 47% of India's estimated 8.8 million retail outlets. 
 
This means, over two million stores that sell Maggi are serviced through middlemen, semi-wholesalers or even larger kirana owners. 
 
"At any given time, about 40% of the products are difficult to trace in the complex trade system," Mayank Shah, deputy marketing manager at Parle Products, told Economic Times. 
 
"We can always go to wholesalers where we supplied products directly, but there are villages with less than 2,000 people where products are distributed by semi-wholesalers in small batches. To get those packs back is neither possible nor economical," Shah further said. 
 
The financial daily reported that even if Nestle was able to recall 100% of the Maggi stock from its distribution network, it would still not be able to reach at least half the total outlets resulting in about one-third of the product by volume being left on shelves. 
 
"Recall is difficult to implement and it won't be efficient in rural areas," Abneesh Roy, associate director at Edelweiss Securities, told ET. 
 
RS Sodhi, managing director at Gujarat Co-operative Milk Marketing Federation that makes Amul dairy products, told the financial daily that a complete pullout of Maggi from the Indian market will be complex considering the deep penetration of the product into every nook and corner of the country. 
 
"It will take 5-7 days for distributors to withdraw the stocks from retailers. But in smaller towns and villages, unless the distributors reach out to the smallest retailer, the stocks will remain, which is what may become a big challenge," said Sodhi. 
 
A senior executive with a retail chain that had stopped selling Maggi on its own told ET that its contract with Nestle ensures the company will take back all unsold stock. 
 
Despite the recall, some online grocery sellers were selling Maggi till late Saturday. While most popular online players had stopped selling the product, orders could be placed for as many as 40 packs on sites such as OneKirana and WeAreOpen. 
 
OneKirana founder Megha Singh said a few orders were accepted by mistake. 
 
(Image: Indiatimes)

Nestle India hits roadblock in re-calling Maggi. More than 40% stock out of its reach

<keyword id="75190" type="CITY" weightage="20" keywordseo="Nestle">Nestle</keyword>’s executives in India are probably undergoing the most stressful phase in their work life. With crisis building up, they have been victim of no leave and unsocial family life off late, all thanks to its above standard content of lead. 
 "I haven't slept for more than two hours in the past fortnight," rued a <keyword id="2891004" type="POSITION" weightage="20" keywordseo="midlevel-executive">midlevel executive</keyword>. "It's been all about nonstop work, plant visits, meetings, tests, future strategies, decisions. Worse, we don't know what will happen tomorrow," he told The Economic Times, speaking on the condition of anonymity. 
 As per a news report in the ET, 7,000 employees, including those working at its five noodles plants in Moga, Pantnagar, Nanjangud, Bicholin and Tahliwal had the nightmare on April 30. That was when a 1998-batch food inspector by the name of Sanjay Singh in Uttar Pradesh's Barabanki town turned the food giant's world upside down. As things moved from bad to worse and Nestle's nightmare snowballed into one of the biggest controversies of the year, Nestle had to press in its entire team into firefighting. It has flown in <keyword id="306047" type="POSITION" weightage="20" keywordseo="global-chief-executive">global chief executive</keyword> Paul Bulcke and executives from across the world, including longest-serving brand head <keyword id="320433" type="PERSON" weightage="20" keywordseo="Shivani-Hegde">Shivani Hegde</keyword> from Sri Lanka, to manage the crisis. In India, it cancelled leaves of all employees and they have been putting in almost 20-hour work days. 
 Few of the facts are in public domain. Nestle, known for being one of the most media-shy companies in the consumer-goods space, sent out text invites for its only media briefing since the mega controversy broke out, postmidnight Thursday, according to the ET. The conference was at 12 noon on Friday, and there wasn't even enough time to send out email invites. Public relations agency Text 100 was given the mandate to organise the conference. The statement announcing the voluntary recall of <keyword id="6369404" type="PERSON" weightage="20" keywordseo="Maggi">Maggi</keyword> noodles was also mailed by Nestle's communications team at the unearthly 12.54 am, to be exact. Enough proof that Nestle India, maker of the once popular Maggi noodles, is working 24X7. 
 
 The firefighting had begun on all fronts, but a little late. "The company's reticence in the face of the mounting controversy is surprising. Its press conference came 16 days after the news broke on UP FDA's findings. 16 days is an eternity in an age of social media," financial services firm Kotak Institutional <keyword id="45369" type="CITY" weightage="20" keywordseo="equities">Equities</keyword> wrote in a consumer note dated June 5. The issue "appears to have surpassed all recent food-safety controversies involving well-known brands (worms in Cadbury Dairy Milk, pesticides in Coke/Pepsi). The company's automated twitter responses have done little to assuage consumer fears. Consumer confidence is seriously dented and the company's strategy of calling its consumers 'confused' (and basing its voluntary recall of the product on this 'confusion') does further damage," the report said. 
 "Nestle underestimated the impact of the controversy in the initial days. They were, in a sense, caught completely <keyword id="196983" type="POSITION" weightage="20" keywordseo="off-guard">off-guard</keyword>. By the time they decided to act, the fire had <keyword id="54921" type="ENTERTAINMENT" weightage="20" keywordseo="spread">spread</keyword> wild," a top communications expert told the financial daily. 
 At the press briefing which Bulcke, India <keyword id="6364480" type="POSITION" weightage="20" keywordseo="Chairman">chairman</keyword> <keyword id="1685339" type="UNKNOWN" weightage="20" keywordseo="Etienne-Benet">Etienne Benet</keyword> and Hegde hosted, the mood went from defensive to almost defiant. "We were waiting for internal investigation results," Bulcke said, when he was asked about the long delay in acknowledging and addressing the issue. 
 
Nestle is also not commenting on lobbying firm Apco being given the mandate to douse the Maggi fire. Apco, which managed PR for Vibrant Gujarat, too, isn't talking. But executives in the know said the first priority is getting the government on their side, which it believes will lead to restoring consumer confidence. 
 
Nestle employees have been told not to talk to anyone - not even to trade partners - unless approved by the legal team. Those working in plants have been told not to go on leave as every product is being tested and re-tested several times, people involved with the company said. 
The company, whose market cap has lost 15% (Rs 10,300 crore), over the past one week, will take a hit of about 7% in sales because of the Maggi recall. 
 Maggi is a Rs 2,000-crore brand, the biggest in the company's portfolio, and Nestle could lose Rs 180 crore in monthly sales until the product is back on shelves, said Abneesh Roy, an <keyword id="2891003" type="UNKNOWN" weightage="20" keywordseo="analyst-and-associate-director">analyst and associate director</keyword> at Edelweiss Securities. 
 The Maggi fire has burnt rivals too, which are looking at the controversy grudgingly. Sales of the entire noodles category are down by close to 80% in the country - the fifth largest instant noodles market in the world. Retailers like Savemax have removed all <keyword id="6354298" type="ORGANIZATION" weightage="20" keywordseo="stocks">stocks</keyword> of other Maggi products like ketchup too, which were giving noodles for free as promotions. 
 
In 2014, the domestic instant noodle market was valued at Rs 3,800 crore, with value growth of 7.4% and volume growth of 2.9%. 
 (Image: <keyword id="-101" type="COMPANY" weightage="20" keywordseo="India-Times">India Times</keyword>)

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