Puri also gave an insight into the company’s different business segments. ITC
Infotech, he said, promised to evolve into a sizeable business over time. The hotels business — which has expanded to 109 properties with more than 10,000 rooms — is pursuing an asset-right strategy to accelerate growth and profitability.
The FMCG business had tremendous potential, said Puri adding that over the coming years, he expects the non-cigarette FMCG business to grow eight times.
Currently, around 25 per cent of ITC’s segment revenue is from newer FMCG businesses under the non-cigarette portfolio. The segment’s earnings before income, tax, deduction and amortisation (Ebitda) at Rs 688 crore in the last financial year, increased by 51 per cent on a year-on-year basis.
Puri said some slowdown was seen in consumption towards the second half of last financial year and it still continues. However, he is confident of consumption picking up shortly. Growth in the segment will not only come from a drive to fortify the existing categories but also through a foray into newer categories and sub-segments. ITC’s non-cigarette FMCG portfolio of brands today represents an annual consumer spend of Rs 18,000 crore.
The Aashirvaad brand accounts for the largest among all at Rs 4,500 crore; Sunfeast accounts for over Rs 3,800 crore; the Bingo portfolio is nearly Rs 2,500 crore; the Classmate brand is over Rs 1,400 crore, YiPPee brand of noodles stands at over Rs 1,100 crore and Vivel, Mangaldeep and Candyman are over Rs 500 crore.
In the last financial year, the company launched 50 products including liquid pouch milk under the Aashirvaad Svasti brand, frozen foods from the ITC Master Chef collection and others to strengthen existing categories. Acquisitions such as the Charmis brand of face cream and Nimyle floor cleaners were acquired to enter new segments. This year, so far, it has launched 26 products.
At his maiden address as the company’s chairman, Puri said that the company intends to lead in all segments of businesses that it operates in.
“It is your company’s aspiration to be a leader in every business segment that we operate in and be acknowledged as a trusted provider of best-in-class products and services,” Puri told the company’s shareholders.
“Towards this, we will continue to invest in enhancing international competitiveness in each business not only to reinforce the pole position achieved in several segments but also speedily attain leadership in the newer business”, he said.
The ongoing restructuring of the apparel business is likely to be completed by the end of the current fiscal year post which the company will take a call on the future of this business. It used to have 140 apparel stores which has reduced to 65 and in course of the restructuring exercise, ITC will decide on the future of these stores.
“The strategic fit of apparel within ITC is amongst the weakest. We have been unable to scale it up too much,” Puri said.
Meanwhile, the company, after investing in an alternative investment fund for start-ups is in talks with another one for investment. ITC is also open to invest directly into a start-up at a later date.
“We are working closely with some start-ups and if required we may take a decision to invest in them directly. These could be probable acquisition targets too,” he said.
The company is also exploring the possibility to come up with standalone brand stores in areas with high footfall to primarily showcase its range of products. Its e-commerce channel will also be expanded to deal with most of the products ITC has.