VLCC Healthcare Ltd.

VLCC Healthcare Ltd. Company Profile – Key products, finance, management team, strategic insights

VLCC healthcare and its operation:

VLCC healthcare ltd. was founded by Mrs. Vandana Luthra as a beauty and weight management services center in 1989. The company was incorporated in the year 1996. The headquarter of the company is based in New Delhi, India. VLCC healthcare was among the first multi-outlet corporate operations in the Wellness & Beauty Industry. The company offers products and services under the name of Wellness & Beauty clinics, personal care products, and skill development in beauty and nutrition.

The company has operated in the wellness and beauty segment for over 30 years. Hence, the VLCC brand has grown to become a household name in Wellness & Beauty segment in India. Over the last three years, VLCC healthcare has served over 35,550 unique customers monthly. The company presence across 310 locations in over 143 cities and across 12 countries in South Asia, South East Asia, the Gulf Cooperation Council Region, and East Africa. The company is also the first Health and Beauty corporate to be awarded an ISO 9001:2000 certification, globally.

VLCC healthcare has a strong distribution network of over 110,000 retail outlets in India, including stores staffed by over 930 beauty advisors as of March 31, 2021. The company also has retail outlets in the overseas markets, including salons and aesthetic dermatology clinics in the South East Asia region.

Products & Services:

VLCC healthcare offers its products and services under the name of VLCC Wellness Clinics, VLCC Personal Care Products, and VLCC Institutes.

Wellness clinics:

The company has an extensive reach with 191 Wellness Clinics spread across 106 cities in 23 states, 88 of which are franchise operated. It is worth noting here that VLCC clinics operate under an asset-light business model. VLCC Wellness Clinics are located mostly in Metropolitan and Tier I Cities. However, its franchisee operated in Tier II and Tier III Cities in India.

The major services the company offers under the wellness package – are wellness services, weight management, body firming, beauty package-skin treatments, hair treatment, aesthetic dermatology, laser treatment, Beauty parlor services-hair coloring, etc.

VLCC healthcare products:

The company has diversified products in its portfolio of beauty and wellness. It always tries to add innovative and differentiated personal care products to its portfolio where there is limited competition. VLCC healthcare sold its products under the name of the VLCC Natural Sciences brand. The company markets over 118 products in skin care, hair care, and body care categories in India. Out of 118 products, VLCC manufactures 108 products itself.

The major products are -firstly facial kits, secondly skincare products such as sun protection, bleaches, brightening, thirdly haircare products- shampoo, conditioner, oil, henna body care, fourthly anti-cellulite products, body lotion, sanitizer, feminine hygiene, and fifthly Nutraceuticals products – Nutraceuticals, cosmeceuticals, herbal infusions, fortified honey.

In addition, VLCC healthcare also operates VLCC Institutes that solves the gap in training and the resulting paucity of a highly skilled workforce. Under this category, VLCC healthcare institutes are providing entry-level and advanced-level skills in beauty and nutrition. This helps to create a skilled workforce in the industry.

VLCC healthcare Management team:

Mr. Mukesh Luthra is Chairman and Non-Executive Director of VLCC healthcare. He holds an advanced diploma in international business management from the Association of Business Managers & Administrators, United Kingdom. Mr. Jayant Khosla is the Managing Director and Group Head of our Company. He holds a bachelor’s degree in mechanical engineering from the University of Delhi and a post-graduate diploma in management from the Indian Institute of Management, Ahmedabad.

Financial snapshot:

Particulars (In INR Million – Year ended in March 31) 201920202021
Total Income8613.097750.235652.42
Total Expenses9107.407882.855601.00
Net Profit/ Loss after tax-527.05153.1062.42
Source: DHRP document filed by VLCC healthcare with SEBI for IPO

The total revenue of VLCC healthcare is over INR 56.52 billion in 2021. The company recorded a profit of INR 62 million in the same year.  The total income of the company has declined from INR 77.50 billion in the year 2020 to INR 56.52 billion in 2021 due to the luck down and subsequent impact of the COVID 19 pandemic. The economy is opening up and the tourism sector is gaining momentum. The company is expecting strong growth in revenue as well as net profit over the next five years.

Major Funding Activities:

VLCC has raised nearly Rs 37 crore in the year 2021 by selling equity shares of around 6,27,804 to Bahamas-based Zall Holdings Ltd.  

The company is also planning to come up with an initial public offering (IPO) later this year, 2022. The IPO will comprise fresh issuance of equity shares worth Rs 300 crore and an offer for sale (OFS) of 89.22 lakh equity shares by the promoter and existing shareholders.

In a PE investment round in 2007, Everstone Capital bought a 15%stake in VLCC for INR 50 crore.

Industry outlook:

The Indian Wellness & Beauty Industry is substantial, forecasted to grow at a CAGR of 10-12% from 2020 to 2025 to reach US$ 40-42 billion. The organized sector to grow its market share to around 30-35% in Fiscal 2025 from about 25-30% in Fiscal 2020. The youth and working population across all age groups are more conviction to invest in wellness and proactive healthcare, especially in the wake of the COVID-19 pandemic.

Health tourism will also increase with the opening up of the travel sector. According to Global Wellness Institute, wellness tourism will grow to $1.1 trillion in 2025, up from $720 billion in 2019. These factors will further boost the revenue of VLCC healthcare.

VLCC healthcare Growth Strategies:

The beauty and wellness industry will grow strong across the globe including in India. Hence, many beauty start-ups will enter into this market. Several players like Dabur India, Marico, Godrej Consumer Products, Emami and Patanjali Ayurved, etc. are dominating this industry along with prominent international players Gillette India, Johnson & Johnson (India), etc.

VLCC healthcare is constantly expanding its business through acquisitions and partnerships as a strategic market diversification. The company is planning to use the net proceeds of the IPO in acquiring overseas companies. In addition, VLCC healthcare partnered with Minor International of Thailand to offer wellness experiences to travelers in Hua Hin, Thailand.

VLCC completed its first global expansion in the UAE in 2005. The company invested US$15 million in its expansion plans in South Africa as well as to set up additional centers in India.

VLCC healthcare is focusing on opening the channel through e-commerce. The sales through this channel have increased from 6.4 percent to 9.6 percent to 26.4 percent of the total product sales in India between fiscal 2019, fiscal 2020, and fiscal 2021, respectively. That will further help the company to increase its top line.

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