According to an HDFC Securities report, Sunrise has been growing strongly and clocked 24 per cent and 22 per cent CAGR over the last nine years (FY09-18) and three years (FY15-18).
ITC already has a presence in the spices segment through its Aashirvaad range, which is a strong brand in Telangana and Andhra Pradesh and Sunrise was expected to fill the gap in the blended spices market. A post-first quarter results review from Emkay Global Financial Services said Sunrise Foods
could lead to a further step-up in margins and growth. According to analysts, ITC could look at more such acquisitions as many regional brands could be available at good valuation post-Covid. Non-cigarettes FMCG has been a focus area for ITC, which already has its task cut out having set a target of Rs 1,00,000 crore revenues by 2030 and acquisitions are expected to help achieve it.
During the pandemic, the non-cigarette FMCG, particularly foods, was the silver lining for the company. Revenues from the segment were up 12.2 per cent on a comparable basis and 18.8 per cent, excluding education and stationery products business that was impacted by the pandemic.
Segment PBIT was up 61 per cent with Ebitda margin expansion of 170 basis points. However, revenues from cigarettes were down by 29.5 per cent and analysts said the volume drop was 40 per cent on account of the nationwide lockdown.
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