Dharampal Satyapal Group: Knowing the ‘Pulse’ of Consumers

the-top-numbers- Dharampal Satyapal group-Nexensus ReportModest Beginnings

Initially started as a perfume shop at Chandni chowk, Delhi in 1929 by Mr.Dharampal the family legacy grew with his son Mr.Satyapal as Dharampal Satyapal Limited in 1989.The introduction of innovation in chewing tobacco segment led to the growth of brands such as Baba, Tulsi and Rajnigandha pan masala (a betel nut product). Paving the road ahead for the homegrown group, Dharampal Satyapal Limited today is a Public Limited Unlisted company with key promoters  Mr.Rajiv Kumar, Mr.Ravinder Kumar connected to a network of over 90 companies today.

With increasing cancer rates and consumer awareness, the path of the industry started changing. Peers like ITC (earlier known as India Tobacco Company) first diversified in the 1970s entering the hospitality business. From 2000 onwards,ITC forayed into greeting cards, Information Technology, Fashion Retail and Agarbattis (Incense sticks). On the other hand, DS Group began branching into non-tobacco businesses much later in 1987. Dharampal Satyapal Group has now become a diverse conglomerate with presence in sectors like Packaging, Food & Beverages, Hospitality, Rubber Threads, Infrastructure and Tobacco. The group has more than 24 manufacturing units spread across Delhi, Noida, Himachal Pradesh, Assam and Tripura.

Marketing for Dharampal Satyapal Limited is Scarecrow Communication’s Arunava Sengupta and Manish Bhatt, the creative strokes behind the propelling marketing of trade brands Pulse candy, Rajnigandha and Pass Pass. Nexensus explores the performance of the products owned by Dharampal Satyapal Limited.

Dharampal Satyapal Group Performance

Even in midst of volatile financial, commodity and consumer markets Dharampal Satyapal Limited has been able to achieve a growth of ~38.95 % by turnover between 2014-2015. Mouth Freshners, Panmasala and Tobacco are the major contributors to revenue for DS Group.

 Standalone financial results(In Billion) 2015Consolidated financial results (In Billion) 2015
Other Income0.1780450.2323
Profit before depreciation, interest finance
charges and tax
Profit before Tax7.7307.340
Profit after Tax6.335.971

Another milestone for DS group, Mouth Freshener brand ‘Pass Pass’ in the herbal category has for the first time crossed the mark of 1 Billion sales turnover.

DS Group: Brand Portfolio

Mouth Freshener segment with the flagship brand Rajnigandha Pan Masala and newly introduced ‘Pulse Candy’ has charted a growth in consolidated turnover by 43.02% from 32.41 Billion in 2014 to 46.35 Billion in 2015.

Tobacco segment’s consolidated turnover has also grown at an incredible rate of 47.38% from 9.4 Billion in 2014 to 13.85 Billion in 2015.While Pan masala & Tobacco have been the largest contributors in revenue, in recent years the company has forayed into new product lines including confectionery ‘Pulse Candy’ and dairy products.

Nexensus report - Dharampal Satyapal Group: Rajnigandha, Pulse, pass pass; Product Contribution

It is notable that there has been a significant drop by 6.05% in contribution to the total turnover from Tobacco products.Because of growing consumer awareness and a hike in excise duty of chewing tobacco by 59.4%, and smoking tobacco by 10% year on year since 2010-2015.

(As % of Turnover)
(As % of Turnover)
1Panmasala & Mouth Freshener (Rajnigandha, Silver Pearls, Pulse Candy, Pass Pass)66.74%
2Flavoured Tobacco & Products (Tulsi Zarda, Khaini)18.50%
3Perfumery Compounds , Aromatic Spices & Herbal Extract11.06%12.82%
4Milk & Related Products2.34%
5Silver & Gold Leaves & Articles0.92%
6Spices & Others
7Mix & Drink
Percentage Contribution - Product Category Sales to Total Turnover of the company.

excise duty on tobacco- Nexensus

New Ways: Image Makeover

A change in the vision of the group’s promoters is evident with the shift in business strategy aimed at metamorphosizing the image of DS group from being a tobacco company to that of a business house. The need for this shift was intensified by the decline in revenue contribution from tobacco products. DS Group has now adopted a multipronged strategy –

  1. Product Diversifications: DS Group has recently entered confectionery, dairy & FMCG sector with launch of  candy (Pulse), Milk Products (Ksheer) and packaged beverages/Mixes (Yomil).
  2. Non-Tobacco Product Focus: DS Group focus has been to launch tobacco alternatives like ‘Rajnigandha Silver pearls’ in an attempt to migrate consumers to an in-house brand.
  3. Repositioning & Rebranding: With Priyanka Chopra, Akshay Kumar, Juhi Chawla and Vidya Balan as brand ambassadors the company is making efforts to be seen as an FMCG conglomerate instead of solely a tobacco based groupDS Global Marketing Pte. Ltd. ,Singapore is responsible for the marketing and distribution of all DS Group products like Tobacco, Salt & Spices, Mouth Fresheners, Confectionery and Dairy globally.

Since Dharampal Satyapal Limited has been historically strengthening its distribution channel of Pass Pass and Rajnigandha, consequently the transition from Tobacco products to FMCG has been smooth which is not so for most players as the entry barrier in FMCG sector is very high.

Other Business Verticals

Dharampal Satyapal Limited has 31 subsidiaries together in India,Switzerland, Singapore, Guinea. Through its subsidiaries ,the company is operating in over 10 industry verticals.

Nexensus: Business Verticals of Dharampal Satyapal GroupPan Masala and Mouth Fresheners

Pan Masala- Tansen, Meetha Maaza and Mouth Freshener Rajnigandha are the group’s top selling brands. While the confectionery market in India is growing at 25 % every year with players like Perfetti offering Mentos and Alpenliebe; Wrigley’s Orbit and Boomer, DS group’s basket with Pass Pass Chingles, Pulse, chewing gums and mints is a forerunner offering traditional Indian flavours in packaged candies. Dharampal Satyapal took the market by a storm through its hard boiled candy brand Pulse.

Flavoured Tobacco & Products: Among chewing tobacco segment,Dharampal Satyapal Limited brands like Baba and Tulsi are popular. Much as competitors like RM Dhariwal,chairman of Manikchand Group owning RMD Gutkha have also diversified into mouth fresheners, bottled water and flexible packaging showing an increasing trend away from Tobacco.

Dairy & Packaged Beverages

Milk and Related Dairy Products: Rising milk prices and inadequate cold storage are twin-pronged challenges that are prompting dairy companies to expand their product offerings.In Ultra-High Temperature (UHT) packaged milk segment of INR 15 Billion prominent players Nestle, Mother Dairy, Amul, and Parag Milk. Amul, the flagship dairy brand of the Gujarat Cooperative Milk Marketing Federation had recorded 53% growth in demand for UHT milk during 2012-13.

Assessing the opportunity Dharampal Satyapal Group forayed in Packaged Milk Category. now spread over an area of 10.2 acres with a capacity of processing ~ 6 lakh liters milk per day and BIS Certification DS Group has recorded a increase of  0.70% between 2014-15. Dharampal Satyapal Limited has two brands under its dairy product basket- Ksheer and Dairymax. Their products encompass UHT milk, curd, chach, khoya, paneer, flavoured milk, dairy whitener and cow ghee under the ‘Ksheer’ brand and Dairymax ghee & skimmed milk powder.

Mix and Drinks/Traditional Beverages: DS Group have furthermore metaphorically dipped their hands in an assorted range of bottled Natural Spring Water,Catch Tonic Water etc. Compared with the INR 145 Billion Indian soft drink market, the juice category is valued at about INR 50 Billion with a year-on-year growth rate of around 15%.Mango drinks dominate the category like a king with an 80% share in India with Maaza as the market leader while Slice and Frooti follow.

Dharampal Satyapal Limited had also introduced powdered drinks Piyoz and Yomil, Aam Panna, Chatpata Jaljeera, Saada Bahaar Nimbu Pani and Orange flavoured drinks.They are now gearing to launch Pulse Mango Masala Maar Ke, having a competitive streak with Coca-Cola, Parle Agro, PepsiCo and Hector Beverages.

Perfumery Compounds & Spices

Aromatic Spices & Herbal Extract : This segment has grown by 1.76 % from 2014 to 2015 with Pass Pass leading the charts.

Spices and Seasonings:  Even today 70% of the Indian spice market is unbranded. Catch pepper and salt made its debut in the rotatory table top dispenser category in 1987, taking a good chunk Catch masale are considered the second-largest in the North Indian spice market after Mahashian Di Hatti Limited (MDH). But the contribution to turnover has decreased by 0.17% fro, 2014-15.

Infrastructure , Power & Silver/Gold Leaves

Dharampal Satyapal Group’s Steel Sheet Plant in Agartala manufactures Cold Rolled Sheets, Galvanized Corrugated/Plain Sheets and Cold Rolled Closed Annealed (CRCA).

Dharampal Satyapal Group has a heat resistant Rubber Thread plant in Agartala manufacturing under brand name Unitex. Another feather in the cap is their Cement plant and Thermal Power Plant in Meghalaya.

They also have a Flexible Packaging Unit commissioned at Bonda, Assam for manufacturing eco-friendly packaging material,rigid biodegradable cans, laminates and pouches used for packaging consumer products like snacks, soaps, shampoos etc.

In addition DS Group also manufactures electronically beaten silver and gold Catch foils which are 100% pure vegetarian.

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