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What recent legal troubles have Patanjali faced due to quality test failures?
Why is Patanjali experiencing a decline in net profit despite its revenue growth?
What are the main reasons behind the suspension of licenses for 14 Patanjali products?

Patanjali has once again made headlines, and this time it’s due to a legal issue.

According to India Today, a court in Uttarakhand sentenced a Patanjali official and two others to six months in prison. The court acted after samples of Patanjali Navratna Eliachi Soan Papdi failed a quality test.

Patanjali Ayurveda Limited and Ajay Joshi (a distributor) were fined Rs 10,000 each. Abhishek Kumar (an assistant manager) was fined Rs 25,000. Leeladhar Pathak (the shop owner) was fined Rs 5,000. The issue began in 2019 when samples from Pathak’s shop were tested in Rudrapur. The tests showed the samples were of substandard quality.

The District Food Safety Officer then registered cases against the three men. In another development, the Supreme Court questioned Patanjali Ayurved Ltd. The Court asked if the company had stopped selling 14 products with suspended licenses. Senior advocate Balbir Singh, representing Patanjali, confirmed they had stopped selling these products.

Why is Patanjali failing?

Patanjali Foods Limited on May 14 reported a 22 per cent decline in net profit at Rs 206 crore for the quarter ended 31 March 2024. It is happening due to sluggish demand dragging overall sales down in its mainstay edible oils business amid a surge in expenses. However, the company had reported a net profit of Rs 264 crore in the year-ago period.

Metric	Q4 FY24	Q4 FY23	Change
Net Profit	₹206 crore	₹264 crore	-22%
Revenue from Operations	₹8,822 crore	₹7,873 crore	+4%
Edible Oils Segment Revenue	₹5,889 crore	Not specified	-9%

There are several reasons for the decline in the net profit. It includes the higher prices of everyday items like milk and wheat flour. It has led to a decline in consumer goods in rural India, causing people to cut back their spending on essential items.

This is not the first time Patanjali Foods has been in trouble. In March, the Supreme Court summoned Baba Ramdev and Acharya Balkrishna to appear personally in court for failing to respond to a show cause notice in contempt proceedings related to misleading advertisements by Patanjali Ayurved.

The court’s directive comes after its criticism of Patanjali Ayurved on February 27 for disseminating misleading advertisements to treat medical conditions such as BP, diabetes, fever, epilepsy, and lumps.

Subsequently, on May 1, 2024, the Uttarakhand government suspended the licenses of 14 products products manufactured by Patanjali’s Divya Pharmacy and Ayurved Ltd with immediate effect. The order was issued to Baba Ramdev’s company after repeated violations of the drug advertisements law.

Here’s a list of Patanjali’s banned products:

What next for Patanjali?

Sanjeev Asthana, CEO of Patanjali Foods, expects revenue to grow to ₹35,000 crore this year from around ₹32,000 crore clocked in the last financial year (FY24). Moreover, the company has formed a committee to consider the proposal for the acquisition of the non-food business of Patanjali Ayurved.

“All the categories: home care, personal care, dental care, skin care, and there are some very solid sort of brands and products there, which are extremely receptive, well received by the consumers. So the entire portfolio is going to move once we go through the diligence, and the acquisition happens,” Asthana told CNBC-TV18.

Summing Up

Patanjali is facing serious problems currently, including legal troubles, quality issues, and falling profits. The recent conviction under the Food Safety and Standards Act of 2006 and the suspension of licenses for several products are putting a lot of questions on Patanjali.

Although the company is struggling, it is taking steps to improve and grow, aiming to achieve stable growth. Will these efforts be enough to turn things around for Patanjali?

Frequently Asked Questions

Who introduced Patanjali?

Ramdev Baba & Balkrishna established Patanjali Ayurved in 2006.

Who is the CEO of Patanjali?

Balkrishna (known as Acharya Balkrishna) is the CEO of Patanjali Ayurveda.

What is Patanjali’s motto?

The brand slogan of Patanjali is “Prakriti ka Aashirwaad.” It means the Blessing of Nature.

What is the qualification of Ramdev?

Ramdev earned a postgraduate degree. He specialised in Sanskrit Vyakarana, Yoga, philosophy, the Vedas, and the Upanishads, under the guidance of Acharya Shri Baldev ji. Later, he was inspired by the life and writings of Maharishi Dayanand and studied Satyarth Prakash and Rigvedadi Bhasya Bhumika in depth.