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Jagatjit Industries, a seven-decade-old liquor company, after a major organisational rejig is set to re-enter various markets it exited years ago. Its promoter and Chief Restructuring Officer, Roshini S Jaiswal said, the company has shifted to a franchise model and will be focusing on the premium segment of the market.
The company in the next year will be re-entering the markets of Canteen Stores Department and also in Uttar Pradesh after 15 years, West Bengal after eight years and Kerala after five years. It had earlier consolidated its presence as there were no price increases. It is currently present in 17 States.
Jaiswal told businessline, “We are re-entering these markets with a very different price position; we are not entering the mass market as we have realized that the margins are better in the semi-premium or premium category than the mass market.” Jagatjit revamped and refreshed all its brands in 2018, and hired a good team by 2019, she added.
Speaking about the company’s turnaround, Jaiswal said, “The company was facing heavy losses and over time it had developed legacy issues. I moved this brand to the franchise model and we took to each and every State to find local partners, as it gives strength to the brand.”
Various factors like demonetisation, Bihar liquor ban, highway ban in Rajasthan and the introduction of GST had affected the company, Jaiswal said. As a part of its rejig, the company had reduced its workforce from 4,000 employees, it currently has over 1,800 employees.
Turnaround
Jaiswal mentioned that the company came out of the red in 2020, when it grew 62 per cent and reversed over ₹50 crores of loss after making losses for six years. The revenues jumped to ₹450 crore in 2020-21 from ₹250 crore in 2019-20. Going ahead it forecasts a 20-25 percent growth rate in revenue and EBITDA year-on-year.
Jagatjit Industries is also investing ₹210 crore to set up an Ethanol plant in Hamira, Punjab, with a planned capacity of 200 kilo litre per day. “The ethanol plant would generate approximately 400 crore in revenue in its first year of production, and we would conclude with a very healthy agreement that would exclude revenue from other divisions, such as the malted milk food division,” Jaiswal said.
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