Cigarette-to-soap maker ITC is building a large future-ready, competitive and resilient non-cigarette FMCG business with 35-40 per cent of the diversified conglomerate’s capital expenditure going into this segment every year.
The conglomerate’s capital expenditure across segments on an average stands at over ₹3000 crore every year.
In his presentation during the “Institutional Investors & Financial Analysts Day” held on Tuesday, ITC Chairman & Managing Director Sanjiv Puri said the conglomerate is building a large future-ready, competitive and resilient non-cigarette FMCG business for today and tomorrow. And, the focus has been on growth with higher profitability, according to two analysts who participated in the event.
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The company’s growth strategy for the non-cigarette FMCG business is driven by seven pillars-- future ready portfolio, insights, innovation and quality, purpose-led brands, synergy, value-accretive mergers and acquisitions, resilient and efficient supply chain and smart omni-channel network.
The company is pursuing the new vectors of growth through higher value-added products and services, opportunities at the intersection of digital and sustainability, Puri said.
ITC Next vision is creating structural drivers of competitiveness with deep investments in innovation to create a future ready portfolio based on science led platforms that address evolving needs of consumers.
Puri said exports and value-accretive acquisitions are also integral elements of the ITC Next strategy. The strategy is demonstrating results with robust performance across all businesses.
According to the company, earlier acquisitions, including Sunrise, are doing “very well”. Also, digital commerce has been growing at a fast pace.
A digital superstructure, DigiArc, has been put in place to create a smart enterprise ecosystem utilising AI, Industry 4.0 etc, spanning insighting to product development, supply chain to distribution and content to commerce raising efficiencies, enhancing agility and enabling higher order competitiveness.
During the event, Supratim Dutta, Executive Director & Chief Financial Officer, ITC, said the conglomerate’s capital expenditure across segments on an average stands at over ₹3000 crore every year, and out of that 35-40 per cent is being allocated for the non-cigarette FMCG business, analysts cited above told businessline.
The segment registered an Ebitda margin growth of around 310 basis points in the last three financial years.