India's biggest incense stick maker smells opportunity in puja items market

India's biggest incense stick maker smells opportunity in puja items market

N Ranga Rao & Sons Pvt Ltd's CEO sees an opportunity to carve a name for himself by devotion — just as his grandfather, N Ranga Rao, did in 1948 by founding a company to sell incense sticks.

Its flagship Cycle Pure Agarbathies is a pan-India brand in a competitive Rs 7,000 crore market. Following the launch of air fresheners, auto fresheners, and aromatherapy oils, N Ranga Rao & Sons is now trying its hand at another category — products for worship and meditation.

The Mysuru-based company got a boost last year when Mumbai-based private equity fund Motilal Oswal PE invested an undisclosed amount in N Ranga Rao & Sons. Vishal Tulsyan, the managing director of the PE firm, says the prayer ingredients segment is worth Rs 15,000-Rs 20,000 crore a year.

For the company, which has a sales target of Rs 2,500 crore before making the family-owned company public, he sees a compound annual growth rate of 25 per cent. However, it has not yet finalized a timeline for listing.

Tulsyan says: "The business model is based on the fragrance experience of the firm, and its success of sales. It therefore needs less money, and generates a good return on employed capital. The model is also cash rich as products are sold to the distribution channel in advance."

This is the Family's first core business diversification. The company has already diversified under the name IRIS and practical perfumery products such as room fresheners and auto fresheners under the brand LIA into aromatherapy oils, atomizers, and diffusion lamps. The family dabbled in fields such as telecommunications, defense, and avionics, and sold the business for the electronics industry that does contract manufacturing. It is also looking to invest in treatment for depression.

The company today exports to 65 countries. It registered revenue of crore Rs 774 and income before extraordinary element and tax of crore Rs 4.5 in 2017-18. N Ranga Rao & Sons ' aroma and perfume lab, founded in 1950, helps the company research and make in-house fragrances.

Ranga Rao also built a strong backbone network so that he would not be at the mercy of the selling dealers who controlled the company of incense sticks.

They are also researching another device in southern India, a priest website, so consumers can book the priests ' services online. A spirituality web-magazine entitled soulveda. Com's in the test phase too. There is also some lateral play on the aromas and perfumes. N Ranga Rao & Sons is researching a deodorant launched two months ago.