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Table of Contents
ITC is a conglomerate which is into businesses ranging from Agri to Infotech. ITC was founded in 1910 as Imperial Tobacco Company. ITC is currently into host of businesses such as:
- Cigarette
- Hotels
- FMCG
- Agri
- Infotech
- Paper and Packaging
Let us look at the highlights of ITC annual report for FY23-24. People at ITC always make beautiful and colourful annual reports, it is much better than the investor presentations they release after each quarter. ITC’s gross revenue for FY23-24 was ₹69,446 crore. The company now has 25 plus mother brands. About 50% of the energy that the company consumes comes from green energy sources. The company skilled over 1 lakh youth through its CSR initiatives.
ITC Brands – Highlights of ITC annual report
ITS has a few brands which have become market leaders in their respective segments. Aashirvaad is the biggest FMCG brand that ITC has built. It is the number one brand in packaged Atta. Classmate is the largest notebook brand. Mangaldeep, Yippee, and Fiama rank number two in agarbattis, noodles and bodywash, respectively.
Aashirvaad has a host of products under its wing. Apart from Atta, Aashirvaad brand offers pulses, vermicelli, dairy products, rava, salt, frozen breads and parathas, millets, instant mixes, and ready-to-eat meals. ITC also offers dairy products such as ghee, curd, fresh milk, lassi etc. under Aashirvaad’s sub-brand, Swasti.
ITC is focusing on the FMCG segment in a big way. The company is trying to grow both organically and inorganically. ITC acquired brands like B Natural, Sunrise, Savlon and Nimyle to enter into the segments where it did not have any presence. The major mother FMCG brands that ITC currently owns are:
- Aashirvaad
- Sunfeast
- Yippee
- Bingo
- Fiama
- Engage
- Savlon
- Classmate
- Fabelle
- B Natural
- Candyman
- Sunrise
- Nimyle
- Vivel
Apart from food products, ITC is also looking to expand its market share in the personal care segment.
Restaurants and Hotels
The annual report further lists a number of restaurant brands that the company runs. All these restaurants are iconic.
ITC operates its hotels under six distinct brands:
- ITC Hotels
- Mementos
- Welcomhotel
- Storii
- Fortune
- WelcomHeritage
After a long delay, ITC finally started operations in its first international property, ITC Ratnadipa in Colombo, Sri Lanka. The delays in commissioning of the hotel was due to COVID and economic crisis in Sri Lanka. ITC is now focusing on an approach that the company calls as “Asset-right”. The company wants to increase occupancy in its existing properties and also wants to create additional revenue streams.
The management, remuneration and the shareholding pattern
The key people at ITC are: the Chairman and Managing Director, Mr. Sanjiv Puri and Executive Director, Mr. Sumant Bhargavan.
Mr. Sanjiv Puri’s gross and net remuneration for FY23-23 was ₹28.63 crore and ₹13.12 crore, respectively. During the same period, Mr. Sumant B. had earned ₹13.60 crore as gross remuneration.
ITC has no promoter holding, but the key share holders at the end of FY23-24 were:
- British American Tobacco (through Tobacco Manufacturers (India) Limited, Rothmans International Enterprises Limited, and Myddleton Investment Company Limited) – 25.51%
- Insurance companies: GIC, LIC and New India Assurance – 20.15%
- Specified Undertaking of the Unit Trust of India (SUUTI) – 7.81%
ITC Financials
ITC is into a number of businesses, but the biggest revenue contributor is Cigarettes segment. Until a few years ago, majority of Revenue would be contributed by the Cigarettes segment, but the things have changed now. Less than 50% of the revenue came from FMCG- Cigarettes segment in FY23-24. On standalone basis, FMCG – Cigarettes contributed about 79% to earnings before tax and interest (EBIT). Cigarettes is a high margin business and it remains the cash-cow for ITC.
On consolidated basis, the revenue from FMCG – Cigarettes segment was ₹33,667.97 crore. The revenue from FMCG – Others segment is also growing well. FMCG – Others contributed 24.5% to the consolidated revenue. Agri Business segment is a big contributor to revenue, but it is a low margin business (<10%). Agri Business brings synergy to all the other businesses of ITC. Wheat procured by the Agri division of ITC goes into making Aashirvaad atta, and tobacco sourced by the Agri division goes to the Cigarettes division. ITC is also a big exporter of tobacco and wheat.
On consolidated basis, FMCG – Cigarettes segment contributed to 77.6% of EBIT. FMCG – Cigarettes segment’s EBIT was ₹20,071.04 crore in FY23-24. Hotels segment, though small, is a higher margin business. The EBIT from Hotels segment was ₹764.96 crore. ITC is working towards demerger of its Hotels business.
ITC annual report further discusses the challenges faced by the Cigarettes business. Per capita consumption of cigarettes in India is quite low when compared to China, UK, US, Japan, Bangladesh and Pakistan. Tax on cigarette in India is also quite high when compared to other countries. High taxes on cigarettes, and counterfeit and smuggled cigarettes are the biggest worries for ITC.
The IT business of ITC is doing fine in the relatively challenging environment. All the IT companies are struggling under the prevailing business condition. ITC Infotech’s Total Income on standalone and consolidated basis was ₹2,941.96 crore and ₹3,784.17 crore respectively. PAT for FY23-24 was ₹382.20 crore on standalone basis and ₹463.13 crore on consolidated basis. The Total Income and PAT numbers for FY23-24 were better than the numbers reported for FY22-23.
For highlights of Mahindra & Mahindra annual report, please click here.
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