ITC eyes top slot with Rs1,00,000 cr revenue from new FMCG business by 2030
30 July 2014
FMCG major ITC Ltd has lined up investments of a total Rs25,000 crore that could take the company's annual revenues from new FMCG businesses alone to around Rs1,00,000 crore by the year 2030, helping it to realise its vision of being the No 1 FMCG player in India.
ITC is in the process of implementing 65 projects across various states in the country, involving an outlay of over Rs25,000 crore. These projects, a majority of which are in advanced stages of planning, will create livelihood opportunities all over India, chairman Y C Deveshwar said.
Speaking at the company's annual general meeting in Kolkata, he said, West Bengal has a high share of these projects with an outlay of over Rs3,500 crore.
Amidst a challenging economic context, ITC recorded an 18.4-per cent increase in net profit to Rs8,785 crore for the financial year ended 31 March 2014, while gross income recorded a new high at Rs48,176 crore. The segment net revenue, other than cigarettes, has grown 16-fold since 1996 to Rs21,845 crore, Deveshwar pointed out.
ITC reported another strong quarter with a 15.6 per cent increase in the company's net profit for the April-June 2014-15 quarter, at Rs2,186.39 crore, on the back of a 24.9 per cent growth in net revenue to Rs9,164.42 crore, driven by agri business and FMCG segments.
Profit before tax increased by 18.2 per cent to Rs3,265.67 crore. Earnings per share for the quarter stood at Rs2.75.
As of now, almost 59 per cent of net segment revenue of the company comes from businesses other than cigarettes, Deveshwar said.
This year, the FMCG industry in India witnessed a marked slowdown. Notwithstanding such an adverse operating environment, ITC's new FMCG businesses recorded a robust growth of 16 per cent, crossing the Rs8,000 crore mark.
The FMCG-others segment also recorded its maiden profit with a PBIT of Rs22 crore, representing a positive swing of Rs103 crore.
The branded packaged foods businesses posted healthy growth in revenues during the quarter, despite sluggish demand conditions and a marked deceleration in industry growth rate.
During the quarter, the personal care products business expanded its portfolio in the deodorant category with the addition of two new variants each for men and women, taking the total number of variants under the 'Engage' brand to 14. Engage has garnered impressive market standing in a relatively short span of time and continues to gain traction in the market.
The education and stationery products business consolidated its position as the leading and fastest growing player in the Indian stationery market.
While legal cigarettes account for less than 12 per cent of overall tobacco consumption in the country, they contribute over 85 per cent of the total tax revenue from the tobacco sector accruing to the exchequer.
High incidence of taxation on cigarettes in India have, over the years, led to a significant shift in tobacco consumption to lightly taxed or tax evaded tobacco products like bidi, khaini, chewing tobacco and gutkha.
The hospitality sector continued to be adversely impacted by the weak economic conditions and high levels of room inventory in key Indian cities leading to a relatively weak pricing scenario. Consequently, growth in segment revenues remained muted during the quarter.
During the quarter, the Business commissioned 'My Fortune Bengaluru', a 115-room flagship property under the Fortune banner in the 'upscale' segment. Significant progress was made during the quarter towards construction of ITC Grand Bharat - a super luxury golf and spa resort - at the Classic Golf Resort, Manesar. The project is nearing completion with the hotel expected to commence operations shortly. Construction activity at the luxury hotel projects in Kolkata and Hyderabad is progressing satisfactorily.
Deveshwar said ITC is taking relentless effort to build world-class Indian brands, backed by cutting-edge research and development and innovation that will continue to drive performance in the years ahead.
ITC, he said, has sustained its position as the only enterprise in the world of comparable dimensions to be carbon positive, water positive and solid-waste recycling positive for several years now.
The company's sustainable business models today support around 6 million livelihoods across the country.