Physical Address
Bengaluru, Karnataka
Table of Contents
Corporate Overview
ITC Limited, one of India’s largest diversified conglomerates, continues to dominate the domestic landscape with its core cigarette business while making strategic inroads into FMCG, hospitality, IT services, agriculture, education & stationery, personal care, matches, incense sticks, and paper & packaging.
Though cigarettes remain its most profitable vertical, ITC has consistently signaled its vision to evolve into a leading FMCG and consumer-centric powerhouse. With the demerger of its hotel business and multiple acquisitions in the consumer goods space, the company seems committed to building a resilient, multi-engine growth model.
Strategic Aspirations for FMCG Growth
Back in 2016, Chairman Mr. Sanjiv Puri had articulated a bold vision: grow ITC’s non-cigarette FMCG revenue to ₹1 lakh crore by 2030. As of FY24–25, however, the segment stood at ₹21,982 crore—suggesting a substantial gap between aspiration and execution, although signs of strategic momentum remain visible.
To bridge this gap, ITC is actively:
- Launching new products across wellness, indulgence, hygiene, and convenience segments.
- Making acquisitions and investing in manufacturing facilities.
Diversifying geographically and through channel mixes, notably into e-commerce and Quick Commerce (Q-Commerce).
ITC Annual Report FY24-25 – Financial Performance Snapshot
Key Metrics
- Gross Revenue: ₹81,612.78 crore (↑ 10.2% YoY)
- PAT from Continuing Operations: ₹20,036.47 crore
- Operating Profit Margin: 35.4% (↓ from 38%)
- Net Profit Margin: 26.7% (↓ from 29.4%)
- ROCE: 37% (↑ from 36%)
- Inventory Turnover: 5.3 times (↓ from 6.0 times)
Despite moderate revenue growth, margin compression was observed—likely due to inflationary pressures, increased freight and labor costs, and elevated raw material prices.
Cigarette Business: Profitable Pillar
Cigarettes remain the cornerstone of ITC’s financial engine. In FY25:
- EBIT from cigarettes: ₹21,091.35 crore (↑ 5.1% YoY)
- EBIT margin: A remarkable 58.76%
Even as other verticals expand, this core segment continues to fund capital expenditures and dividend payouts. Regulatory stability and price inelastic demand provide a shield, although the company is keen to reduce its dependence on this category over the long term.
FMCG (Non-Cigarette) Business
ITC’s non-cigarette FMCG success is largely built on a portfolio of strong, well-known brands that have resonated with Indian consumers. In the Packaged Food segment, household names like Aashirvaad (flour, staples), Sunfeast (biscuits, noodles), Bingo! (snacks), Yippee (noodles), B Natural (juices), and Candyman (confectionery) continue to drive significant revenue. In Personal Care, brands such as Fiama, Savlon, Vivel, and Engage have carved out distinct niches. Beyond these, ITC’s reach extends to Classmate in Education and Stationery Products, Mangaldeep in Agarbattis, and Home Lite in Matches, all enjoying considerable market recognition.
Revenue and Portfolio Highlights
- Gross FMCG Revenue: ₹21,982 crore
- Packaged Foods: ₹18,282.42 crore (↑ 6.1%)
- Personal Care, Stationery, Matches, Agarbattis: ₹3,722.85 crore (↓ 1.1%)
Key Developments
- Launched 100+ new products spanning Nutrition, Hygiene, Indulgence, and Convenience.
- Maintains 18 packaged food factories and 4 personal care units, with a new facility underway in Hardoi, Uttar Pradesh.
To further bolster its presence and accelerate growth in the competitive packaged food and personal care sectors, ITC has actively pursued a strategy of inorganic growth through acquisitions. Notable acquisitions in recent times include:
- 24 Mantra Organic: A significant step into the rapidly expanding organic foods market.
- Prasuma: Known for its frozen foods and ready-to-eat products, enhancing ITC’s presence in convenience food.
- Mother Sparsh: A strategic move into the baby care segment, particularly organic and natural baby care products. ITC currently holds a 26.5% stake and has executed agreements to acquire the remaining 73.5% in tranches over the next two to three years, signaling a clear intent for full ownership and deeper integration into its personal care portfolio.
- Sproutlife (Yoga Bar): This acquisition signifies ITC’s entry into the health and wellness segment, targeting the growing demand for protein bars and healthy snacks. However, it’s worth noting that Sproutlife Foods Private Limited has been making significant losses, with ITC’s share of losses amounting to ₹12 crore in FY25, indicating the initial integration and stabilization challenges.
In a move to streamline its focus, the company has also divested its stake in Delectable Technologies Private Limited, a venture involved in the sale of FMCG products through vending machines. ITC had initially invested ₹11 crore in Delectable, but its exit suggests a strategic decision to withdraw from a non-core or underperforming distribution channel.
Financially, the Gross Revenue of Branded Packaged Food Products was ₹18,282.42 crore, marking a 6.1% increase over FY24. However, the combined gross revenue from Education and Stationery Products, Personal Care Products, Safety Matches, and Agarbattis was ₹3,722.85 crore, which surprisingly represented a 1.1% decline from FY24. This mixed performance within the non-cigarette FMCG portfolio highlights that while packaged foods are seeing healthy growth, other segments face headwinds that require strategic attention.
Agri Business: A Strong Performer
ITC’s Agri Business segment demonstrated a robust financial year in FY24-25, exhibiting commendable growth in revenue and profitability. This segment plays a dual role for ITC: it supports the company’s raw material requirements (especially for the cigarette and packaged food businesses) and acts as a significant revenue generator through trading activities.
ITC’s Agri business division posted strong results:
- Tobacco Revenue: ₹3,380.76 crore (↑ 38.15%)
- Other Agri-trading: ₹8,863.24 crore (↑ 45.86%)
- EBIT: ₹1,540.3 crore (↑ 20.49%)
Key contributors include wheat, spices, rice, potatoes, coffee, and soya. This vertical supports ITC’s backward integration and export competitiveness while serving as a hedge against raw material cost volatility.
A key component of ITC’s rural strategy is its network of Choupal Sagars, which serve as rural service centers providing farmers with various services, market linkages, and access to products. As of FY25, ITC maintained a network of 24 Choupal Sagars. However, the report notes that the company did not add any new stores to its network in FY25, suggesting a period of consolidation or strategic reassessment for this initiative.
Hotels Business and Demerger
ITC now holds 39.88% stake in ITC Hotels post-demerger. The remaining shares are held by institutional investors and public shareholders.
ITC Hotels Highlights (FY25)
- Total Hotels: 143
- Keys: 13,382 (42% owned, 58% managed)
- New Properties Added: 16
- Expansion Plan: Targeting 220 hotels by FY28 with 70:30 managed-to-owned ratio
- Geographic Spread (Top States): Himachal (19), Rajasthan (15), Gujarat & Tamil Nadu (13 each)
- Upcoming Projects (Top States): 10 in Uttarakhand, 6 in West Bengal
The company continues to build a distinctive hospitality identity under its ITC Hotels,Welcomhotel, Fortune, Storii, WelcomeHeritage and Mementos brands, with a focus on sustainability and experiential luxury.
ITC Store: Shutting Down D2C Platform
ITC officially shuttered its direct-to-consumer online store, citing persistent service and operations challenges since early 2022. Consumers reportedly faced order delays and poor service, pushing ITC to focus instead on established e-commerce and Q-Commerce platforms.
This move aligns with ITC’s decision to leverage partner ecosystems rather than go it alone in logistics-heavy D2C commerce.
Paperboards, Packaging & Printing
ITC’s paper & packaging segment faced turbulence:
- Paperboard Revenue: ₹5,957.90 crore (↑ 1.5%)
- Packaging & Printed Materials: ₹617.98 crore
Challenges:
- Surge in wood prices
- Import pressure from China and Indonesia
- Weak domestic demand
- Rising competition
In a key move, ITC signed a Business Transfer Agreement to acquire Aditya Birla Real Estate’s pulp & paper assets, likely aiming for scale and backward integration.
ITC Infotech: Growing Beyond Core
ITC’s technology arm, ITC Infotech, showed strong growth:
- Revenue: ₹3,204.32 crore (↑ 11.68%)
- PAT: ₹466.62 crore (↑ 22.10%)
- Dividend to parent: ₹488.32 crore
The company made a significant acquisition: Blazeclan Technologies, a cloud solutions firm, for ₹296.98 crore. Global expansion included entry into KSA, Abu Dhabi, New Zealand, Canada, Europe, and Southeast Asia.
Consolidated Financial Overview of ITC Limited
A holistic view of ITC Limited’s financials for FY25 presents a comprehensive picture of its performance:
The revenue from operations for FY25 stood at ₹81,612.78 crore, which notably included a grant of ₹306 crore on account of Fiscal and Exports incentives. This indicates that a small portion of the revenue was supported by government benefits.
As anticipated, the Cigarette segment remains the most profitable for the company. Its EBIT to Revenue ratio was an impressive 58.76%. The EBIT for the segment was ₹21,091.35 crore, reflecting a 5.1% increase year-on-year. This segment’s high profitability continues to be the bedrock of ITC’s financial stability, funding investments in other, less mature businesses.
Looking at expenses, Employee Benefit expense increased by 11.2% over FY24 to ₹6,169.78 crore. This rise could be attributed to annual increments, expansion of workforce in certain segments (despite overall headcount reduction in some areas like IT), or higher benefits.
Another significant increase was observed in Outward freight and handling charges, which jumped by 19.2% YoY to ₹1,928.59 crore. This surge might reflect higher logistics costs, increased volume of goods moved, or a shift in distribution channels.
Interestingly, the company’s expenditure on advertising and sales promotion saw a slight decline from ₹1,385.64 crore in FY24 to ₹1,331.69 crore in FY25. This represents less than 2% of the total revenue, a long-standing characteristic of ITC’s marketing strategy, with FY20-21 being an aberration when it briefly went above 2%. It is important to note that prior to FY23-24, these expenses also included those for ITC Hotels, meaning the current figure is solely for the continuing businesses.
This relatively conservative spending on advertising, especially compared to pure-play FMCG companies, suggests a reliance on established brand equity and extensive distribution.
Geographically, 82% of ITC’s revenue originated from within India in FY25. This figure was a slight decrease from FY24, when the contribution of revenue from within India was 83.5% of the total, indicating a minor shift towards international markets or a faster growth rate in overseas operations for some segments.
The profit after tax from continuing business was ₹19,732.74 crore, which was 1% lower than FY24. This reinforces the earlier observation of margin pressure, as a decline in net profit despite revenue growth points to higher expenses relative to sales.
Capital expenditure (CAPEX) in FY25 was lower than the previous fiscal year in both FMCG and non-FMCG segments. The company had projects worth ₹1,087.60 crore in progress, with most of these slated for completion by the end of FY26. This indicates a period of more controlled capital deployment, possibly following earlier large-scale investments.
ITC Limited maintains a healthy liquidity position, with Cash and cash equivalents of ₹620 crore and additional bank balances of ₹3,392.36 crore. This strong cash position provides financial flexibility for future investments, acquisitions, or to navigate unforeseen economic downturns.
The company’s investment portfolio is diverse. As of March 31, 2025, ITC owned 830 million shares of ITC Hotels, solidifying its continued significant stake in the demerged entity. Furthermore, ITC holds investments in four other listed companies: VST Industries Limited (5,236 shares), HLV Limited (53,413,884 shares), EIH Limited (100,853,602 shares), and Tourism Finance Corporation of India Limited (25,000 shares).
These strategic investments likely provide synergies or represent long-term value creation opportunities. Beyond listed equities, ITC also holds long-term investments in Zero Coupon and Fixed Rate Government and Corporate bonds, as well as debt mutual funds and alternative investment funds, reflecting a balanced approach to treasury management. Its current investments include Certificate of Deposits, Liquid Funds, Ultra Short-Term Funds, Money Market Funds, and Debentures, ensuring short-term liquidity.
A critical observation from the report is that the company’s revenue has remained at the same level in the last three financial years, and PAT has also stagnated. This reinforces the notion of margin pressure clearly observed in FY24-25, highlighting a period of consolidation or intense competition impacting top-line growth and bottom-line expansion across some of its core segments.
Remuneration of Directors and Key Managerial Personnel (FY24–25)
During FY24–25, ITC Limited maintained a structured and performance-linked remuneration framework for its Directors and Key Managerial Personnel (KMP), in alignment with the company’s compensation philosophy and market benchmarks.
Executive Chairman’s Compensation
- Mr. Sanjiv Puri, Chairman & Managing Director, received a fixed salary of ₹3.54 crore.
- In recognition of performance milestones, he was awarded a bonus of ₹21.39 crore during the year.
- Mr. Puri was granted stock options for 134,500 equity shares, enhancing his alignment with long-term shareholder interests.
- As of March 31, 2025, he held a total of 452,843 equity shares in the company.
Key Personnel with Total Remuneration Exceeding ₹1 Crore
The following Directors and KMP received total remuneration in excess of ₹1 crore during the financial year:
| Name | Total Remuneration (₹ crore) |
| Mr. Sumant Bhargavan | 11.81 |
| Mr. Anand Nayak | 8.87 |
| Mr. Supratim Dutta | 8.53 |
| Mr. Hemant Malik | 4.94 |
| Mr. Hemant Bhargava | 1.04 |
| Mr. Shyamal Mukherjee | 1.02 |
| Mr. Ajit Kumar Seth | 1.01 |
In addition to their remuneration:
- Mr. Supratim Dutta, Mr. Hemant Malik, and Mr. Sumant Bhargavan were each awarded 65,250 stock options during FY24–25.
- Their cumulative shareholding in the company, as of year-end, stood at:
- Mr. Supratim Dutta: 868,180 shares
- Mr. Sumant Bhargavan: 854,700 shares
These equity-linked incentives are designed to foster long-term value creation and continuity of leadership.
Median Employee Remuneration
- The median annual salary of employees (excluding Directors and KMP) during FY24–25 was ₹10,32,129.
For workers (blue-collar workforce), the median compensation stood at ₹5,10,990.
Final Remarks and Conclusion
The FY24–25 annual report positions ITC Limited as a company both anchored in its time-tested strengths and cautiously venturing into new frontiers. While the cigarette business continues to dominate profitability, the company has accelerated investments in FMCG, IT services, agri-trading, and hospitality, laying the groundwork for long-term diversification.
The non-cigarette FMCG ambition—reaching ₹1 lakh crore in revenue by 2030—still seems distant. Yet, progress is tangible through:
- Strategic acquisitions like Yoga Bar and Mother Sparsh
- Expansion of iconic home-grown brands such as Aashirvaad, Yippee, and Savlon
- Increased manufacturing footprint and rural distribution efforts
The company’s margin pressures in FY25, evident in falling operating and net profit margins, signal rising costs across the value chain—from logistics to raw materials. However, the uptick in ROCE and strong EBIT performance in core businesses like agri and cigarettes provide reassurance about operational resilience.
ITC’s retreat from its D2C e-commerce initiative underscores the challenges of building customer-facing platforms without logistics scale. It also reflects the company’s pragmatism—opting instead to partner with established players in the Q-Commerce and B2C ecosystem. This disciplined capital allocation approach has helped ITC avoid overextending itself, a risk many conglomerates face when expanding laterally.
Meanwhile, ITC Infotech is emerging as a credible, growth-oriented arm in tech services, with a sharp international expansion strategy and improved profitability. ITC Hotels, now partially demerged, offers a focused hospitality growth vehicle while still contributing indirectly to shareholder value.
The Paperboards segment, although subdued, remains integral to backward integration and environmental sustainability goals. The upcoming acquisition of Aditya Birla’s pulp & paper assets is expected to provide much-needed scale and supply-side flexibility.
From an investor standpoint, ITC remains a defensive stock with stable cash flows, generous dividends, and sector-spanning optionality. However, sustained growth will now depend on:
- Executing FMCG scale-up with speed and innovation
- Delivering on premiumization and rural market strategies
- Maintaining capital discipline amid an evolving macro backdrop
In conclusion, ITC Limited in FY24–25 exemplifies a company at an evolutionary crossroads. It has nurtured deep moats in legacy verticals and is now methodically pivoting toward a future shaped by changing consumer behavior, digital disruption, and sustainability imperatives. The next few years will determine whether this carefully choreographed transformation yields durable, value-accretive outcomes or gets mired in execution complexity.
If it succeeds, ITC could redefine what a modern Indian conglomerate looks like in the post-cigarette era—multi-platform, tech-integrated, and consumer-obsessed.
Also Read: Nestlé India, a comprehensive analysis of the company – 2025
Also Read: Hindustan Unilever: A Deep-Dive into India’s FMCG Powerhouse – 2025
Also Read: Larsen & Toubro: A Comprehensive Overview – 2025
Also Read: Trent Limited – FY2024–25: Building India’s Retail Future
References
- ITC Annual Report FY24-25
- ITC Annual Report FY23-24
- ITC Annual Report FY22-23
- ITC Annual Report FY21-22
- ITC Annual Report FY20-21
- ITC Annual Report FY19-20
- ITC Annual Report FY18-19
- ITC Annual Report FY17-18
- ITC Hotels Media Statement and Presentation for Q4FY25
- ITC Limited portal
- ITC Infotech website
- Website of Blazeclan
- We want Rs 1 lakh crore revenue from FMCG: Sanjiv Puri, COO, ITC, Economic Times
