Emami buys 26% stake in Axiom Ayurveda, maker of AloFrut juices

FMCG player Emami Limited, which is one of the leading personal care and healthcare companies in India, has acquired a 26 per cent equity stake in Axiom Ayurveda Pvt Ltd and announced that it will foray into the juice category with ‘AloFrut’. Axiom markets beverage products under the brand AloFrut.

The Kolkata-headquartered company has been eyeing good growth from its personal care and healthcare businesses in the years ahead and the firm expects to grow at a 27.9 per cent compound annual growth rate (CAGR) from 2021 to 2027, post-Covid 19 recovery.

Emami, which saw its net profit dip in the year gone by, has been expecting its margins to bounce back on the back of inflation moderating. Earlier, the company had said that it was aiming to build new brands and strengthen the equity of its core brands through various channels, including modern trade, e-commerce, and general trade.

The new deal with Axiom Ayurveda is expected to strengthen its position further. According to the company, AloFrut has a strong market presence across general trade, government institutions, modern trade and e-commerce platforms.

The acquisition of 26 per cent of the paid-up share capital of Axiom on a fully diluted basis, through primary infusion and secondary buyouts, it is expected to be completed within one month.

Axiom Ayurveda Private Limited, a company registered under the Companies Act was incorporated on November 14, 2019 in Haryana. Axiom which has a presence in Indian Market is a beverage company with a proprietary fusion of aloe vera pulp with a fruit blend. It has other product portfolios in the beverage segment & personal care which contribute approximately 15-20 percent to the business. Rishabh Gupta and Alisha Gupta are the founders of the company.

“With health & wellness being the buzzword for consumers today, we see tremendous potential in the segment. “AloFrut” product offering is very unique as these beverages are based on Aloe pulp inclusion in fruit juice which provides a perfect mix of taste and health together. We are excited to be present in this category which is in line with our corporate growth strategy to invest in categories or brands that not only have synergy with our existing business but offer potential for growth,” said Harsha V Agarwal, Vice Chairman & MD, Emami.

“Nowadays consumers are moving away from the carbonated beverages and are looking for a healthier alternative with an equal importance to taste. Considering this trend where consumer is focussing on taste and health, we have tried to offer a perfect blend of the same which is a big differentiator from other beverage company offerings. It is exciting to have Emami come on board as a strategic partner with wide industry experience who shares our vision to make Alofrut a leader brand,” said Rishabh Gupta, Founder, Axiom Ayurveda.

Last month, Emami reported an 86.5 per cent year-on-year rise in its consolidated net profit (profit attributable to equityholders of the parent) for the fiscal's first quarter ended June (Q1FY24) to Rs 137.72 crore.

The company had reported a profit of Rs 73.83 crore in the year-ago period. Sequentially, consolidated net profit was down 4.6 per cent from Rs 144.43 crore in Q4FY23. Emami shares opened at Rs 449.60 apiece on BSE.

The company's consolidated revenue from operations rose 6.8 per cent on year to Rs 825.66 crores during the quarter ended June from Rs 773.31 crore in Q1FY23. Total income rose to Rs 833.94 crore in the first quarter. It stood at Rs 779.64 crore in the year-ago period.

In its quarter report, Emami debuted a line of organic shampoos under the Kesh King brand, along with a number of Medico product releases and a number of digital first debuts on the Zanducare platform. Navratna Cool Talc (Arctic Blossom), BoroPlus Body Lotion (Aloe Neem), and BoroPlus Soap (Neem) all had new versions released by the company in Q1FY24.

“We are happy to report a 7 per cent growth in domestic business despite challenging operating environment. While erratic summer & unseasonal rains impacted summer product offtakes, our non-summer portfolio grew strongly by 16 per cent. International business also continued its growth trajectory with 11 per cent constant currency growth. With inflation moderating further, we look to the future with increased optimism and confidence," Agarwal said in its Q1 FY24 report.

"With the development of the digital eco-system, both e-commerce and D2C will play a key role in the organisation’s growth and we will continue to invest in strengthening our presence in an omni-channel presence to reach our consumers," he added.

Shares of Emami closed at Rs 515.00, up by 0.45 per cent.

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