ITC Share Price

ITC Ltd

ITC Ltd is one of India's largest and most diversified conglomerates with a commanding presence across multiple sectors. Known primarily for its market-leading position in cigarettes, ITC has expanded its footprint into industries such as hotels, paperboards, packaging, agribusiness, FMCG, information technology, and more.

A brief history of ITC

ITC was incorporated on August 24, 1910, under the name Imperial Tobacco Company of India Ltd. Initially focused on the tobacco business, the company underwent several transformations over the decades. In 1970, the name was changed to India Tobacco Company Ltd, and later, in 1974, it became I.T.C. Ltd. A major milestone occurred in 2001, when the company adopted the name ITC Ltd, reflecting its diversified portfolio that stretched far beyond tobacco.

ITC’s diversified business segments

ITC Ltd is synonymous with diversification. The company operates through a wide range of business segments:

1. Cigarettes and Tobacco: ITC continues to be a market leader in the Indian cigarette industry with flagship brands like Gold Flake, Classic, Navy Cut, and Wills Navy Cut.
2. FMCG (Fast-Moving Consumer Goods): ITC has made significant strides in the FMCG space with products in categories like: ○ Packaged Foods: Brands such as Aashirvaad, Sunfeast, Bingo!, and Yippee! have become household names. ○ Personal Care: Brands like Fiama, Vivel, and Savlon have become popular in personal hygiene and skincare. ○ Stationery and Education: The Classmate and Paperkraft brands dominate the Indian market.
3. Hotels: ITC Hotels is known for its luxury offerings and eco-friendly practices, such as the LEED Platinum certification awarded to ITC Royal Gardenia in Bengaluru.
4. Paperboards, Packaging, and Specialty Papers: ITC is a leader in this segment, operating through the Bhadrachalam Paperboards Division and Tribeni Tissues Division.
5. Agribusiness: Leveraging its strong rural linkages, ITC is one of India’s largest exporters of agricultural commodities.
6. IT and Infotech: ITC Infotech is a wholly owned subsidiary providing IT services to global clients and continues to be an important part of ITC’s diversified portfolio.

Financial Performance (FY 2023)

Revenue and Profit

• Revenue: ITC reported a gross revenue of ₹69,446 crore for FY24, which represents a slight decrease from the ₹76,097 crore reported in FY23. This reflects a marginal decline in overall revenue growth.
• Net Profit: The company recorded a net profit of ₹20,422 crore for FY24, marking an 8.9% increase from the previous year's net profit of ₹15,058 crore.

Segment Performance

• FMCG growth: The FMCG segment, excluding cigarettes, showed resilience with a 10% growth in revenue over the previous year. The segment's EBITDA increased by 19.7%, reflecting robust operational performance despite challenging market conditions.
• Cigarettes: The cigarettes segment saw a 7% year-on-year increase in revenue during Q4 of FY24, indicating continued strong demand.
• Hotels and other segments: The hotels segment performed strongly with a 15.6% increase in revenue and a 39.1% increase in profit before interest and tax (PBIT) for the full year. This was driven by higher revenue per available room (RevPAR) and cost management strategies.

Financial Metrics

• EBITDA Margin: ITC's EBITDA margin improved to 35.1% for FY24, up from 36% in FY23. This improvement was driven by operational efficiencies across its business segments.
• Dividend Payout: ITC announced a final dividend of ₹7.50 per share for FY24, up from ₹6.75 per share in FY23, highlighting its commitment to rewarding shareholders.

Recent Developments and Latest News

1. Expansion in the FMCG sector: In 2023, ITC launched multiple new products under its FMCG brands. The Aashirvaad brand expanded its range with Gluten-Free Flour, Multi-Millet Mix, and Ragi Flour. Sunfeast introduced new biscuits and vermicelli products. ITC continues to strengthen its portfolio with innovations in the health, wellness, and hygiene segments, including the launch of Savlon hand sanitizers and the Fiama range of personal care products.

2. Mergers and Acquisitions: ITC has been actively pursuing mergers and acquisitions to bolster its portfolio. In 2020, ITC acquired Sunrise Foods Private Ltd, a leader in spices manufacturing. In 2021, Wimco Limited became a wholly owned subsidiary. Additionally, ITC made strategic investments in Mother Sparsh Baby Care Private Limited, marking its entry into the baby care segment.

3. Sustainability Initiatives: ITC has consistently focused on sustainability. The company has committed to sustainable agriculture practices, and its Mission Sunehra Kal has made significant contributions to soil and water conservation. ITC is also a pioneer in green buildings, with many of its hotels receiving LEED Platinum certification.

4. New Ventures: ITC recently ventured into the Moulded Fibre Products (MFP) space through the creation of ITC Fibre Innovations Limited. This move is aimed at reducing plastic usage by offering sustainable packaging alternatives. Additionally, the company commissioned a spices processing facility in Andhra Pradesh in 2023, further strengthening its agribusiness portfolio.

ITC's Corporate Governance and Sustainability

ITC has always been at the forefront of corporate governance in India. It was the first Indian company to voluntarily seek a corporate governance rating. Moreover, ITC’s environmental initiatives are commendable. The company has achieved water-positive, carbon-positive, and solid-waste recycling-positive status for several years, reflecting its long-standing commitment to sustainability.

Key Sustainability Metrics:

• Water Positive: ITC has been water-positive for 18 consecutive years.
• Carbon Positive: The company has been carbon-positive for 16 years.
• Solid Waste Recycling Positive: ITC has been solid-waste recycling positive for 15 years.

Outlook Overview

ITC Ltd’s journey from a tobacco company to a diversified conglomerate is a testament to its strategic foresight and adaptability. The company’s diversified portfolio, strong financial performance, commitment to sustainability, and focus on innovation have made it one of India’s most admired companies. With its continuous expansion into new sectors and focus on operational excellence, ITC is well poised for future growth.