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Sanjiv Puri’s ‘ITC Next’ strategy to drive into commanding position in FMCG industry market

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Powered by mega brands such as Aashirvaad, Sunfeast, Bingo!, Classmate, and Savlon, ITC is set to drive into a commanding position in what some analysts have estimated to be a Rs 5 lakh crore addressable FMCG industry market segment by 2035, with Chairman Sanjiv Puri putting in motion a carefully crafted ‘ITC Next’ strategy.

This re-crafted strategy, built around portfolio revitalisation, rapid platform-based innovation, aggressive digitisation, deeper synergies with other group businesses, structural leverages and a sharper focus on margins.

As an FMCG major, ITC is the only company that is dominant across a range of product categories from branded atta to biscuits; snacks to spices; noodles to dairy; chocolates to coffee; juices to frozen snacks and vegetables; deodorants to hand and body wash; sanitizers and masks to floor cleaners; and from notebooks to agarbatti, that none of the other Indian or multinational brands can claim to be present in.

Puri’s ‘ITC Next’ strategy pivots around a multi-pronged approach to revitalize the company’s current FMCG portfolio by fortifying and scaling up its proven megabrands, leveraging adjacencies through horizontal brand extensions, and nurturing new platforms with innovative products that will scale up to be leaders in their respective categories.

Mega brands and adjacencies

ITC has a plethora of megabrands such as Aashirvaad, Sunfeast, Bingo! and Classmate that already command leadership positions in the market.

The strategy of creating value added adjacencies could be best illustrated by the new Aashirvaad portfolio including Aashirvaad Nature’s Super Foods range comprising ragi flour, multi-millet mix, gluten free flour, organic atta and pulses as well as chapatis, instant meals and the Aashirvaad Svasti dairy range.

ITC is also fostering new platforms and strengthening its new brands including Fabelle chocolates, Sunbean coffee, B Natural juices, Nimyle home cleaners, Savlon hygiene products and so on. The overarching strategy for new platforms of innovative products is to first validate the concept and business model in select beachheads. Having gained a dominant market penetration, these new lines of products and brands will gain strength to occupy adjacent markets with different opportunities, building a larger brand with each new product, creating new and steady vectors of growth for the future.

ITC under Puri is unwavering in its resolve to build a formidable FMCG business. With innovation as the new lifeblood, the company today is one of the largest incubators of world-class Indian brands.

The Company’s wide range of FMCG portfolio has demonstrable headroom to expand rapidly in the FMCG industry overall addressable market segment of Rs 5 lakh crore.

For instance, the total size of the packaged snacksmarket for the overall industry is set to vault 4.5 times from about Rs 32,000 crore to an estimated Rs 1.43 lakh crore by 2035. The market for overall spices industry is projected to grow from about Rs 22,000 crore currently to Rs 1.1 lakh crore in 15 years, a growth of five times. Similar industry growths are expected in other categories such as biscuits, branded atta, noodles, deodorants, personal care products and the cleaners categories.

Most of ITC’s FMCG products occupy the first or the second positions in their respective categories giving them unique opportunity to corner most of these segment growths.

Aashirvaad, India’s number one branded packaged atta, itself has a consumer spend of over Rs 6,000 crore.

Digital, consumer-centric and future-ready

Puri’s strategy to make ITC future-ready manifests in his focus on driving the three megatrends emerging out of the pandemic – innovation, digitalisation and sustainability. The Company’s R& D Centre, the ITC Life Sciences and Technology Centre (LSTC) in Bengaluru helped ITC to launch 120 differentiated products amid the pandemic to meet emerging preferences. To further support this goal, the company has set up 9 state-of-the-art integrated consumer goods manufacturing facilities (ICML) to create structural advantages.

Digitalisation is being accelerated pan-ITC through the use of new technologies such as Industry 4.0, Artificial Intelligence, Machine Learning, Big Data, Industrial Internet of Things (IoT), etc. These technologies are also being deployed across the entire supply chain spanning sourcing, manufacturing, trade engagements and e-commerce, including its own ordering platform the ITC e-store. The FMCG business has further driven enhanced competitiveness through a multi-channel distribution strategy which have been strengthened by-customised apps.

Power of Synergies

The ‘ITC Next’ FMCG strategy has also been bolstered by synergies flowing in from the company’s other businesses.

A good example of synergies is ITC’s foods business deriving a significant competitive advantage from agribusiness’s sourcing capabilities. The culinary expertise of ITC’s Hotels business has also enabled ITC to craft differentiated food offerings.

Stronger growth, better margins

The robustness of Puri’s strategy for FMCG is evident from the segment EBIDTA (earnings before interest, taxes, depreciation and amortisation) increasing by by 82 per cent this Q2 from Q2 FY 20, as outlined in ITC’s second quarter financial results.

The FMCG businesses have been posting steady growth ahead of industry peers. During the last four years, ITC’s revenue from FMCG increased from around Rs 10,500 crore to nearly Rs 15,000 crore.

ITC’s FMCG business during 2020-21 grew 16 per cent versus the industry average of 8.5 per cent.

There has also been a steady improvement in profitability in the FMCG segment, with EBITDA margins having improved by more than 640 basis points between 2016-17 and 2020-21.

‘ITC Next’ strategy for other businesses

In August, at the company’s annual general meeting, Puri unveiled the extensive ‘ITC Next’ strategy to architect the structural drivers that will power ITC’s next horizon of growth and ensure that the enterprise remains future-oriented, consumer-centric and nimble.

ITC’s other businesses too have pivoted to create new frontiers for the future, with enhanced competitiveness as well as sharper focus on cost management to strengthen leadership or rapidly attain the top positions in the case of newer segments.

Some of the key drivers of growth, as identified by Puri, for ITC’s other businesses include an asset right strategy for Hotels powered by a repositioned WelcomHotel brand as well as newly launched brands such as The Storii and Mementos done with management contracts. Two management contracts have already been signed under the Mementos brand.

Similarly, in the Paperboards business, the company is concentrating on sustainable packaging and value-added paper, while in agriusiness, the emphasis is on Next Generation agriculture driven by the ‘super app’ ITC MAARS and value-added agriculture.

Special strategic thrust is also being provided to ITC Infotech, the wholly owned subsidiary which is on a strong growth and profitability trajectory over the last few years.

Business

Bharat Mobility Global Expo 2025: Toyota & Lexus Unveil Future Projects In Indian Portfolio; Images Below

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New Delhi: Japanese car maker Toyota and it’s luxury arm, Lexus have showcased some of their future models from their respective India portfolios at the Bharat Mobility Global Expo 2025. Toyota’s standout concepts include the X-Van, bZ4X, and Urban EV, while Lexus has captivated audiences with the ROV Concept 2 and LF-ZC.

Toyota’s star studded lineup

Moreover, Toyota showcased some of its updated and facelifted models during the autoshow. The Japanese car maker features included the Prius Flexi-Fuel PHEV, the Hilux FCEV, and a detailed cross-section of the Innova Hycross hybrid. Additional highlights include the striking Hilux Black Edition and the Land Cruiser 300 GR Sports, adding excitement to the brand’s lineup.

Toyota X-Van (Concept)

The X-Van, envisioned as a futuristic MPV, is designed to redefine spaciousness and versatility to meet diverse customer needs. This boxy, three-row utility vehicle eliminates the B-pillar, resulting in an expansive glasshouse and flexible seating configurations, available in 1-3-2 or 2-2-2 layouts. It features sliding suicide doors, a three-pane sunroof, and robust plastic cladding on the lower sections, adding a rugged and bold aesthetic to its innovative design.

Toyota BZ4X

The bZ4X electric SUV concept, first unveiled in 2021, is built on the e-TNGA architecture developed with Subaru. Its design features sharp styling, chunky black wheel-arch trim, a contrasting roof, and a silhouette influenced by the popular RAV4 SUV. The front showcases Toyota’s ‘Hammerhead’ design language, reminiscent of the latest Camry sold in India.

In global markets, the production-spec bZ4X comes with a 71.4kWh battery, offering a WLTP range of 450km. It’s available in two variants: a single-motor version (204hp, 265Nm) and a twin-motor AWD version (218hp, 336Nm).

Lexus LF-ZC (Concept)

The Lexus LF-ZC concept offers a glimpse into the premium electric sedan slated for international launch next year. Designed with a modular structure, its centrally placed batteries free up space for versatile front and rear configurations, supporting both single- and dual-motor setups. Lexus claims the top-spec LF-ZC will deliver a range exceeding 1,000km upon production.

The concept features Lexus’s latest design language, emphasizing sharp, aerodynamic styling. Inside, it boasts a futuristic cockpit with a steering yoke incorporating steer-by-wire technology and digital control pads seamlessly integrated across the cabin.

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Maha govt signs 31 MoUs for investment proposals worth Rs 6,25,457 crore at Davos

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Mumbai, Jan 22: The Maharashtra government has signed a record 31 MoUs with investment proposals worth Rs 6,25,457 crore in the field of steel, metals, renewable energy, infrastructure, cement, Lithium-Ion Batteries and Solar Modules on the sidelines of World Economic Forum summit at Davos.

The MoUs were signed on Tuesday in the presence of Chief Minister Devendra Fadnavis and senior government officers.

CM Fadnavis said, “The MoU signed today paves the way for Maharashtra’s comprehensive growth and development.” He further stated that this marks a new record for securing such a significant investment amount in a single day. Similarly, several investment agreements are expected on the second day as well.

Of the Rs 6,25,457 crore, JSW will invest a record Rs 3 lakh crore for Maharashtra’s Green Transformation and Tata Group will also make an investment of Rs 30,000 crore in multiple sectors.

The Chief Minister met with key executives of several companies and invited them to invest in Maharashtra. Among these, Tata Group Chairman N. Chandrasekaran held discussions with CM Fadnavis during which it was confirmed that the Group would invest Rs 30,000 crore in the state. The CM also met Carlsberg Group CEO Jacob Aarup-Andersen, who expressed interest in investing in Maharashtra.

The Chief Minister assured him of full cooperation for the group’s plans. Additionally, M.A. Yusuff Ali, Managing Director of the Lulu Group, conveyed interest in investing in Nagpur and expanding operations in Maharashtra.

CM Fadnavis held discussions with ReNew Power Chairman and CEO Sumant Sinha about a 15,000 MW pipeline and wind energy projects in the Beed district. Schneider Electric India’s Managing Director and CEO Deepak Sharma also met the Chief Minister. Discussions included the use of AI in the energy sector and strengthening ITIs in the state with assistance from the World Bank. Expansion plans in Ahilyanagar and Nashik were also hinted at. Mastercard APAC President Ling Hai held talks with CM Fadnavis, while Louis Dreyfus Company CEO Michael Gelchie discussed opportunities in agriculture, food processing, international shipping, and financial sectors. Emphasis was placed on enhancing collaboration in agriculture. The CM also met Cognizant CEO Ravi Kumar S. and discussed potential investments and opportunities.

“The series of meetings highlighted Maharashtra’s focus on attracting substantial global investments and fostering economic development,” said the Chief Minister’s Office in a release.

CM Fadnavis in his post on X said, “Extremely happy to witness the historic Rs 3,00,000 crore MoU signing between Govt of Maharashtra & JSW Group, with an employment generation of 10,000 in the regions of Chhatrapati Sambhajinagar, Gadchiroli, and Nagpur. Very much thankful to Sajjan Jindal ji for being a part of this historic moment at Davos, which will give a huge boost to Maharashtra’s industrial environment. It will give a big boost to Maharashtra’s industrial environment. The areas of this investment like Renewable Energy, Infrastructure, Cement, Lithium-Ion Batteries, and Solar Modules will play a huge role in our mission ‘Green Maharashtra.”

The government signed an MoU with Waaree Energy with a total investment of Rs 30,000 crore in green energy and solar components. it will create 7,500 jobs. The company chairman Hitesh Joshi was present.

The government inked an MoU with Blackstone-Panchshil Realty for an investment of Rs 25,000 crore for the development of the data centre. It will generate 500 jobs. Further, Blackstone will invest Rs 25,000 crore in Information Technology in the Mumbai Metropolitan Region. It will create 1,000 jobs.

The government inked an MoU with Erulearning Solutions for an investment worth Rs 20,000 crore in education. The government signed an MoU with ZR2 Group for investment worth Rs 17,500 crore in automobiles and EVs in Pune region to generate 4,000 jobs.

The state government and Balasore Alloys Ltd signed an MoU for investment of Rs 17,000 crore in steel and metals. The venture will generate 3,200 jobs. The company was represented by Satish Kaushik at the time of the signing of the MoU.

The state government and Reliance Infrastructure Ltd signed an MoU for investment worth Rs 16,500 crore in the defence sector. It will generate 2,450 jobs. The company was represented by Sateesh Seth.

Powerin Urjaa will invest Rs 15,299 crore in green energy and generate 4,000 jobs. Open Origin India Inc will invest Rs 15,000 crore in green energy to create 1,000 jobs.

Viraj Profiles Pvt Ltd and the state government inked an MoU for the investment of Rs 12,000 crore in steel and metals to generate 3,500 jobs. Neeraj Raja Kochhar, Chairman and MD of Viraj Profiles was present at the time of the signing of the MoU.

Avani Power Batteries will make investment of Rs 10,521 crore in electronics to generate 5,000 jobs in Chhatrapati Sambhajinagar. H2e Power will invest 10,750 crore in green energy to create 1,850 jobs in Pune region.

The government signed an MoU with Rural Enhancers for investment worth Rs 10,000 crore in social sectors including hospitals.

The government inked an MoU with Welspun for an investment worth Rs 8,500 crore in logistics to generate 17,300 jobs.

Essar in partnership with Blue Energy will invest Rs 8,000 crore in green energy to create 2,000 jobs.

Further, United Phosphorus will make an investment of Rs 6,500 crore in green energy to generate 3,000 jobs. The government signed an MoU with Olectra EV for investment worth Rs 3,000 crore in automotive and EV to generate 3,000 jobs.

Kalyani Group will invest Rs 5,250 crore in defence, steel and EV. It will create 4,000 jobs. The MoU was signed in the presence of CM Fadnavis and Vice-Chairman & Joint MD of Bharat Forge Limited Amit Kalyani. “Thank you Amit Kalyani for joining this MoU signing at Davos! This investment is special because it is coming to Gadchiroli, which will give better lives to so many,” said the chief minister.

Gensol will invest Ra 4,000 crore in electronics in Chhatrapati Sambhajinagar to create 500 jobs. The government inked an MoU with & El Mont for the investment of Rs 2,000 crore in infrastructure. It will generate 5,000 jobs. The company director Kabir Bhandari was present.

BookMyShow will invest Rs 1,700 crore in the entertainment sector to generate 500 jobs. Further, the government signed an MoU with Tembo for an investment worth Rs 1,000 crore in the defence sector. It will create 300 jobs. The company director Shabbir Merchant was present on the occasion.

The government also inked an MoU with AB InBev in the F&B segment for investment worth Rs 750 crore. Kartikeya Sharma, President, India & South East Asia of AB InBev was present on the occasion.

Moreover, the government inked an MoU with CEAT Limited for investment worth Rs 500 crore in automotive and EC to generate 500 jobs.

Bisleri International will invest Rs 250 crore in food and beverages in the Mumbai Metropolitan Region to create 600 jobs. The MoU signed paves the way for Maharashtra’s comprehensive growth and development.

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India sees surge in deal activity at record $116 billion in 2024

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New Delhi, Jan 21: India’s deal-making landscape witnessed a landmark year in 2024, with a record 2,186 deals valued at $116 billion, marking a 33 per cent increase in volumes and 76 per cent surge in values (year-over-year), a report showed on Tuesday.

Driven by India’s status as the fastest-growing G20 economy, with a 7 per cent growth rate driven by robust domestic demand, the country’s deal-making activity reached new heights, defying global economic uncertainty, and demonstrating the resilience of its economy, according to the Grant Thornton Bharat ‘Annual Dealtracker 2024’.

“As we look ahead to 2025, we are optimistic about the prospects for continued robust deal activity, fuelled by government reforms, a stable economy, and a thriving tech ecosystem, making India an attractive destination for investors despite global uncertainties,” said Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat.

The mergers and acquisition landscape witnessed a record-breaking year, with 683 deals valued at $44.1 billion, marking a 37 per cent increase in volumes and a 75 per cent surge in values compared to the previous year.

Domestic consolidation drove growth, with 479 deals amounting to $23.5 billion, a 64 per cent increase in values, led by Indian conglomerates such as Adani Group, Aditya Birla Group and Nazara Technologies.

Outbound M&A also witnessed significant growth, with 121 deals valuing $16.9 billion, driven by two billion-dollar deals, according to the report.

The private equity landscape demonstrated resilience in 2024, with 1,298 deals raising $31 billion, up from 1,046 deals valuing $27.4 billion in 2023.

The year witnessed a 26 per cent rise in high-value deals (estimated at and over $100 million) and two billion-dollar deals.

The initial public offerings (IPO) activity reached unprecedented heights in 2024, defying global economic headwinds, with 86 listings raising a record $21 billion, more than triple the $6.2 billion raised in 2023, said the report.

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