Patanjali Ayurved: Valuation Of An Unusual Fmcg Company In India

Tuhin Harit; Vikram Kuriyan; Geetika Shah

Product #:ISB-178

Supplier:Indian School of Business

Discipline:Finance

Setting:2018

Details:Case (PDF) • 13 pages • 2019-09-15

Subjects:

Industries:

Goods, trade, and consumer services

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$10.54

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An investment analyst at a fictional wealth fund (SWF) is concentrating on India's high-growth, high-potential fast moving consumer goods (FMCG) sector and selects a few strong performers in both public and private markets to recommend to the management as an investment. The Indian FMCG sector has been trading at high market multiples compared to other sectors, and thus, he also needs to analyze if these high valuation levels are justified. In valuing Patanjali, a privately-held company that is a very strong performer with an unusually rapid growth trajectory, he needs to factor in both tangible and intangible information, giving special attention to the company's unusual origins and atypical management.

Learning Objectives

1. To give students a sense of how to go about analyzing a particular sector for investment considerations 2. To give students a perspective on valuing public companies, introducing certain valuation methodologies along with their relevance and emphasizing the importance of company- and sector-specific nuances in valuation 3. To introduce students to the valuation of private companies, emphasizing the importance of intangible company-specific factors in reaching an investment decision