ITC to invest $2 billion to create vectors for next leg of growth: CMD Sanjiv Puri

“We have a wide portfolio in both food and personal care and we are open to looking at opportunities that are aligned to our strategic plan. We are looking at something that helps us address recent consumer trends and has a strategic fit with our existing businesses,” he said.

While addressing the company’s 110th annual general meeting, Puri shared the ‘ITC Next’ strategy and efforts being taken to drive growth in the years ahead. ITC plans to soon launch a super-app for farmers and is scaling up initiatives across the value chain to become a digital-first company.

Eye on HUL’s throne

ITC plans to dethrone Hindustan Unilever as the country’s top FMCG company and is making efforts on all fronts to achieve this goal. The company has identified potential growth areas across segments and plans to tap them by extending current brands such as Sunfeast and Aashirvaad or launching products. It’s also eyeing the inorganic route.

The company wants to tap consumer trends towards healthy eating and convenience foods. It has introduced ITC Master Chef Frozen Snacks in 120-125 towns and cities and initially aims to drive their adoption in these towns.

“Slowly, we will take the category wider but it will not go deeper quickly. We want to build it in markets where its penetration is low and hence there is tremendous headroom for growth,” said Puri.

At the same time, it is extending the Aashirvaad brand to cater to adjacent staples categories.

“Aashirvaad started as an atta (flour) brand and then we ventured into specialised atta. We have also launched gluten-free millet mixes, vermicelli and now we plan to launch ready-to-cook chapatis in Kerala under the brand,” he said.

Smart solutions for homes, health, wellness and hygiene, convenience foods, and indulgence foods are some growth areas that the company has identified.

Growing FMCG pie

ITC, of late, has been trying to shake off its image as a cigarette company, which has impacted its market performance. It has been pushing its FMCG business towards this end, which, according to the company, has yielded results.

The company’s FMCG unit garnered consumer spending of over Rs 22,000 crore and reached more than 150 million households in FY21, Puri told shareholders at the AGM on August 11.

According to Puri, the company’s EBITDA margins in its FMCG business in the past four years have improved by 640 basis points, while revenue increased to almost Rs 15,000 crore from about Rs 10,500 crore. In the past year, FMCG revenue recorded an industry-leading growth of about 16 percent on a comparable basis, he said.

The FMCG business’s gross revenue and profit after tax for FY21 stood at over Rs 48,000 crore and Rs 13,000 crore, respectively.

ITC faces several hurdles on its journey to becoming the top FMCG company in the country. Puri, too, acknowledged this.

“It takes a lot of effort, it takes a lot of resources and not just investments in the brand-building but also in research and development, innovation and to get the right kind of talent and distribution. So, it is not an easy business but quite challenging. But we have made progress so far and are the largest incubator of world-class Indian brands and we are optimistic of delivering good performance going ahead too,” he said.