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    ITC exploring acquisition opportunities, will examine alternate structures in hotel biz: MD Sanjiv Puri

    Synopsis

    The conglomerate will also launch a Super App during this year targeted at small farmers to expand the ITC e-Choupal network which will also create new revenue streams, strengthen sourcing efficiencies and power its FMCG brands, said Puri.

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    Puri said ITC’s cigarette business had almost reached pre-Covid levels towards the end of last fiscal but with the onset of the second wave, the business was again affected by localised lockdowns and restrictions.
    ITC Ltd is “proactively exploring” acquisition opportunities in the fast moving consumer goods (FMCG) business to build additional pillars of growth, while it will continue to examine alternate structures in the hotel business for value creation, said chairman and managing director Sanjiv Puri.

    The conglomerate will also launch a Super App during this year targeted at small farmers to expand the ITC e-Choupal network which will also create new revenue streams, strengthen sourcing efficiencies and power its FMCG brands, said Puri.

    Addressing the company’s shareholders during the 110th annual general meeting held virtually on Wednesday, Puri said ITC’s non-cigarette FMCG brands have garnered consumer spends of over Rs 22,000 crore across more than 150 million households. “This also makes ITC one of the largest incubators of world-class Indian brands,” he said.

    Puri said ITC will continue to evaluate “value accretive inorganic opportunities as an additional pillar of growth.” He said this was manifest in the earlier acquisition of Savlon and Nimyle brands, and more recently of Sunrise Foods which is a market leader in the East in branded spices.

    "ITC will continue to evaluate value accretive inorganic opportunities as an additional pillar of growth."

    — Sanjiv Puri, chairman & MD, ITC

    In the last four years, ITC’s FMCG Segment EBITDA margins improved considerably by 640 basis points, while revenue increased from around Rs 10,500 crore to nearly Rs 15,000 crore. Last fiscal, the FMCG business revenue grew by 16% on a comparable basis.

    Talking about the hotel business, Puri said in the medium term ITC’s asset-right strategy is expected to double the number of properties. The country’s second-largest hospitality company, ITC is betting big on managing hotels rather than owning them as the next driver of growth.

    “The company will continue to examine alternate structures in this segment (hotel) in line with industry recovery dynamics and opportunities for value creation,” he said. He did not elaborate further.

    Puri said ITC’s cigarette business had almost reached pre-Covid levels towards the end of last fiscal but with the onset of the second wave, the business was again affected by localised lockdowns and restrictions. “However, the week-on-week improvement in market conditions consequent to easing of restrictions augurs well for a pick-up in the recovery momentum,” he said.

    ITC’s proposed Super App, which is called ITC-MAARS or Metamarket for Advanced Agriculture and Rural Services, will create a ‘phygital’ eco-system to deliver seamless customised solutions to farmers. Puri said ITC-MAARS will offer a full complement of agricultural solutions while its micro-services structure will enable plug-in by a range of agtech solutions. This will include hyperlocal services, artificial intelligence based personalised advisories and online marketplaces.

    “Some pilots at scale on an integrated chilli value-chain initiated in Andhra Pradesh have validated the concept and benefited farmers with an additional income of 26% in the ongoing season,” he said.

    Puri said the government’s endeavours to accelerate vaccination is optimistic and despite near-term uncertainties, the Indian economy holds immense promise.

    “This (vaccination) undoubtedly is most critical to restore normalcy, and collectively, all efforts must be made to increase the pace. The crisis, however, is far from over. The distress caused by the pandemic continues to be of concern for lives and livelihoods as well as for economic growth,” he said.


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