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ITC reports business recovery despite ‘near-term risks’ due to Covid

Our Bureau Kolkata | Updated on August 11, 2021

Aims to fortify FMCG megabrands, expand portfolio of ‘digital-first’ brands for e-commerce, and launch an agri super-app

Despite the “near-term uncertainties” from the pandemic, business recovery in the last couple of months after the lifting of the second wave-led lockdowns has been encouraging, Sanjiv Puri, Chairman, ITC Ltd, said.

The company will address changes with agility, he said, and, under its ‘ITC Next’ strategy, FMCG megabrands will be scaled up and fortified. New platforms — whether developed or acquired — will be nurtured. Verticals incongruent to growth path, like lifestyle retailing, have been shrunk, he said, adding that the company’s “high-quality brands” have garnered consumer spends of over ₹22,000 crore.

“The FMCG portfolio has been revitalised to make it future-ready, address emerging trends and develop categories of the future. Purposeful brands anchor large categories and have immense headroom to grow,” he told shareholders during the 110th annual general meeting of the company.

There was special mention of Savlon and Nimyle, which grew 13x and 4x, respectively, after acquisition by ITC. Other “purpose-led” brands like Aashirvaad and Sunfeast, as also ‘ITC Master Chef’ (frozen snacks) found mention.

“During the second wave, the localised lockdowns and restrictions once again posed challenges. The recovery over the last couple of months is encouraging, though the possibility of subsequent waves creates near-term uncertainties,” Puri said.

While various business verticals like cigarettes, hotels and stationery products have been hit by the pandemic, e-commerce sales have doubled. Encouraged by the positive consumer response to the repositioning of premium brands like Dermafique and Fiama as ‘digital-first’ ones, the company is progressively introducing more digital-first brands.

ITC to ramp up e-store offerings

It is also exploring inorganic growth and the acquisition of Sunrise Foods will help it ramp up in the branded spices segment in underpenetrated markets.

The cigarettes business, Puri said, staged a smart recovery after being impacted by the second wave and lockdowns. The revenues had almost returned to pre-Covid levels towards end-FY21 (until the second wave hit). “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.

Hotels will continue to explore an “asset-right” strategy.

Agri-business

According to Puri, ITC will launch a super-app during the year, called “ITC-MAARS” (metamarket for advanced agriculture and rural services). This will augment the e-choupal initiatives and create a robust ‘phygital’ eco-system for customised agricultural solutions.

ITC strengthens partnerships as it aims to scale-up community development programmes

“This suite encompasses hyperlocal services, AI-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 per cent in the ongoing season,” Puri said.

Agri-exports constitute 56 per cent of ITC’s aggregate forex earnings of $7.3 billion over the last 10 years.

Published on August 11, 2021

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