The ₹278-crore, Delhi-based Modi Naturals, maker of the ‘Oleev’ brand of olive oil, is expecting to be back in the black by this fiscal year on the back of diversification into the snacking segment.
While the BSE-listed company reported a net loss of ₹40 lakh in FY18, the first quarter of this fiscal year (April to June) saw it report a net profit of ₹40 lakh.
According to Akshay Modi, Executive Director, Modi Naturals, the import-duty hike last fiscal year hit growth in the premium olive oil segment. However, with the situation stabilising, the company has seen 27 per cent volume growth in Q1 for ‘Oleev’.
Oleev remains the prime contributor for its consumer division business that includes ‘Olivana Wellness’ and the recently launched ‘Pipo’ — ready-to-cook popcorn. The consumer division accounts for a third of the company’s turnover.
“We intend to be back in black this fiscal. Most of our profits were reinvested towards brand building. This apart there was import duty hikes that squeezed bottom-line. However, with the consumer division breaking even, the focus will be on increasing the FMCG business in the coming days,” he told BusinessLine.
Brand Segregation
According to Modi, the company will look to expand the scope of its consumer division portfolio.
In May, it entered the ready-to-cook segment through the Pipo brand of popcorn. Available in some 8-10 cities, the brand will be extended to have a national presence soon. Focus will be on the snacking category through Pipo.
‘Oleev’ on the other hand will be focussing its offerings around the health and wellness segment.
“We wanted to launch new products, but, were limited by our brand Oleev. So we went with a different brand in the snacking and indulgence category,” he said.
According to Modi, the company will opt for an asset light model. It already has an integrated oil refinery and packaging unit in Haryana. New additions will mostly be on a lease basis. The company will set up a bottling unit in Hyderabad, Telangana for its olive oil business; while a packaging unit at Sonepat, Haryana for its snacking unit.