Three months after announcing changes to its business structure, Chennai-based FMCG and retail major CavinKare’s foray into the dairy sector is on in full swing. The company’s H-Milk brand is driving business in the sector, even as its presence plays a key role in a re-structured CavinKare that relies heavily on product diversification.
In August, CavinKare announced that nearly 50 percent of the company's Rs 800 crore worth of investments over the next five years will go to Dairy. The other half, the company said would go towards boosting retail distribution and giving wings to its e-commerce business.
"We are looking to have our dairy division take off in a big way, along with retail," said CK Ranganathan, Founder and Chairman of CavinKare, in an exclusive chat with CNBC-TV18. "We see the dairy, retail and FMCG verticals as three big opportunities for us," Ranganathan added.
The execution of these expansion plans comes on the back of CavinKare beginning to see a solid post-pandemic recovery across verticals. Sales revenues for November have exceeded levels seen in 2019, before the pandemic struck. "We are definitely seeing a recovery — all businesses are beating 2019 numbers easily by 20 percent and 25 percent," Ranganthan said, "Not only is business coming back, but it's back with very healthy bottom lines."
Any news of recovery is good news for a company that clocked just short of Rs 1,700 crore revenues in FY 21, falling significantly below projected revenues of Rs 2,250 crore thanks to pandemic-induced pressures, especially across its salon and bakery service verticals. With an ambitious Rs 5,000 crore revenue target for FY 26, CavinKare is looking at growth rates of at least 25 percent every year over the next five years.
"Eventually, it (growth) will be upwards of 25 to 30 percent in the next four to five years — that’s our outlook," said Ranganathan, "We are quite bullish about food retail."
Early last year, pandemic-induced closures gravely hurt dining and salon services pan-India. As the fear and impact of COVID-19 has slowly dissipated, CavinKare is focusing on expanding both verticals. The next five years will see the company will embark on a manifold expansion plan for its bakery vertical, while its 400 salons could more than double to 1,000 in the same period. However, the risk of yet another COVID wave could play spoilsport to these plans.