ITC's FMCG business set for expansion and sustainable growth, annual report reveals

ITC Limited, a diversified conglomerate, is intensifying its focus on scaling up its fast-moving consumer goods (FMCG) business by capitalising on robust growth platforms and a future-ready portfolio. In its recently released annual report, the company highlighted the substantial potential for long-term growth in categories with low household penetration. With one of the highest addressable market expansion potentials in the Indian FMCG sector, ITC is strategically investing in building categories for the future, while actively pursuing value-accretive acquisitions, joint ventures, and collaboration opportunities to accelerate growth and value creation.

ITC's FMCG Expansions

The FMCG business of ITC encompasses branded packaged foods, personal care products, education and stationery items, incense sticks, and safety matches. In the financial year 2022-23, this segment generated revenue of Rs 19,000 crore, reflecting an annual consumer spend of Rs 29,000 crore. Moreover, after experiencing disruptions over the past two years due to the pandemic, the cigarettes business witnessed a recovery in the last financial year. The stability in cigarette taxes, coupled with deterrent actions by enforcement agencies, enabled the legal cigarette industry to regain volumes from illicit trade.

To support its FMCG operations, ITC has made substantial investments in state-of-the-art integrated consumer goods manufacturing and logistics facilities (ICML) strategically located near high-demand centres. The company recently commissioned a new ICML in Khordha, Odisha, bringing the total number of ICMLs to 11. Furthermore, ITC is exploring new growth opportunities through exports. The FMCG business has expanded its export footprint across 60 countries, benefitting from the production-linked incentive scheme, which has boosted ITC's exports in categories such as biscuits, cakes, snacks, dairy, and ready-to-eat products.

In addition to its FMCG endeavours, ITC's hotels business remains a significant contributor to its overall portfolio. With an asset-right strategy, the company currently operates 120 properties with 11,500 rooms. In the last fiscal year, the hotels segment generated approximately Rs 2,585 crore in revenue, with an EBITDA of Rs 831 crore. ITC continues to prioritise sustainability initiatives, actively combating climate change through its promotion of 'climate-smart agriculture.' This programme has already benefitted over seven lakh farmers in 17 states, resulting in a remarkable reduction of greenhouse gas emissions for select crops by up to 66 percent and an increase in farmers' net returns by up to 90 percent between 2016 and 2021.

According to the company, ITC is committed to advancing circularity and waste management within its operations. The company has made significant progress in improving the circularity of waste generated and continues to explore innovative solutions. With its unwavering focus on expanding its FMCG business, sustainable initiatives, and strategic investments, ITC Limited is poised to achieve substantial growth in the coming years.