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

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4 years ago

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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.

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New excise duty, health cess on cigarettes, pan masala to begin from Feb 1

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2 days ago

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January 31, 2026

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New Delhi, Jan 31: From February 1, the government is bringing a new tax structure for cigarettes, tobacco products and pan masala, aiming to tighten regulation and keep tax levels high on these so-called ‘sin goods’.

An additional excise duty will now be charged on cigarettes and tobacco products, along with a new health and national security cess on pan masala.

These new levies will replace the earlier system under which these products were taxed at 28 per cent GST along with a compensation cess that has been in place since the launch of GST in July 2017.

The government is also introducing a new MRP-based valuation system for several tobacco products such as chewing tobacco, filter khaini, jarda scented tobacco and gutkha.

Under this system, GST will be calculated based on the retail price printed on the packet, instead of factory value.

This move is expected to reduce tax evasion and improve revenue collection. Pan masala manufacturers will now have to take fresh registration under the new health and national security cess law starting February 1.

They will also be required to install CCTV cameras that cover all packing machines and store the video recordings for at least two years.

In addition, companies must inform excise authorities about the number of machines in their factories and their production capacity.

If any machine remains non-functional for 15 days in a row, manufacturers will be allowed to claim a reduction in excise duty for that period.

Even after the new changes, the government has ensured that the overall tax burden on pan masala, including 40 per cent GST, will remain around the current level of 88 per cent.

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Indian stock markets gain this week ahead of Budget 2026

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2 days ago

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January 31, 2026

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Mumbai, Jan 31: The Indian equity benchmarks gained around 1 per cent during the week, though the trading sessions were volatile but with a cautiously constructive tone amid mixed global cues and rising geopolitical tensions.

Risk appetite weakened toward the end of the week ahead of the Union Budget 2026-27, with volatility resurfacing amid sustained FII outflows and rupee depreciation leading to losses in the last trading session.

Nifty added 1.09 per cent during the week and dipped 0.39 per cent on the last trading day to 25,320. At close, Sensex was down 296 points or 0.36 percent at 81,537. It added 0.90 per cent during the week.

Sectoral indices traded mixed this week with diversified consumer services stocks and hardware tech stocks logging the worst-performance, dipping 2.5 to 3.7 per cent. FMCG, media and software stocks slide over 1 per cent.

Metal stocks as well as oil and gas were the top weekly gainers up over 2 per cent, however Nifty metal index plummeted over 5 per cent on the last trading session. Profit booking also intensified in IT amid a firmer dollar and global liquidity concerns, and caution over incoming Fed Chair, analysts said.

Select pockets of weakness were observed in autos and beverages amid intensifying competitive pressures.

Broader indices posted stronger gains during the week, with the Nifty Midcap100 up 2.25 per cent, while Nifty Smallcap100 gained 3.2 per cent.

The markets opened the week with a subdued sentiment due to renewed tariff-related concerns and mixed corporate earnings, although optimism surrounding the India–EU trade agreement lent support, particularly to trade-oriented sectors.

Market sentiment improved mid-week following a favourable economic survey that reinforced expectations of robust FY27 growth and a benign inflation outlook.

Analysts said that markets remain wary that a potentially stronger inflation focus could prolong tight financial conditions and weigh on emerging markets.

Looking ahead, markets are expected to remain largely event-driven, with the Union Budget acting as the key domestic trigger, they said.

Cyclical sectors may continue to show relative resilience if supported by policy measures, while IT and export-oriented stocks are likely to remain sensitive to global macro cues, analysts added.

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Centre’s fertiliser supplies to states scale record high of 530 lakh metric tons in April-December

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3 days ago

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January 30, 2026

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New Delhi, Jan 30: Fertiliser movement from the Centre to the states on Indian Railways, during the first nine months (April-December) of the financial year 2025-26, reached an all-time high with total supplies crossing 530.16 lakh metric tons to surpass the 500 lakh metric ton mark for the first time during this period, an official statement said on Friday.

This represents a 12.2 per cent increase over the corresponding period of FY 2024–25 and is 8.5 per cent higher than the previous record of FY 2023–24, it said.

The Centre has ensured sufficient availability of all major fertilisers across states, including the supply of 350.45 lakh metric tons of urea, against a requirement of 312.40 lakh metric tons in the first nine months (April-December) of the financial year 2025-26. Similarly, in the case of major P&K (phosphorous and potassium) fertilizers including DAP, MOP & NPKS, the total supply reached 287.69 lakh metric tonnes against the requirement of 252.81 lakh metric tonnes, consistently exceeding the assessed requirement and ensuring uninterrupted availability, the statement said.

Faster and smoother movement of fertiliser rakes enabled timely supplies to states, ensuring that farmers did not face any shortages during the critical stages of cultivation. Department of Fertilisers worked in close cooperation with the Ministry of Railways and stated that such coordinated efforts have helped ensure adequate availability of fertilisers across the country, the statement added.

During this period, average rake loading on Indian Railways increased to 72 rakes per day in July 2025, rose to 78 rakes per day in August 2025 and reached 80 rakes per day in September 2025, according to the official figures.

Urea rake movement rose to 10,841 rakes, registering an 8 per cent increase over last year, while P&K fertilisers recorded 8,806 rakes, marking an 18 per cent growth. Enhanced coordination with the Ministry of Railways, ports, state governments, and fertiliser companies ensured seamless and timely supply to states during peak agricultural seasons, the statement said.

Ensuring the timely availability of fertilisers to farmers has remained one of the government’s highest priorities. In this direction, the improved coordination between the Ministry of Railways and the Department of Fertilisers during Kharif 2025 and the ongoing Rabi season was clearly visible at the ground level. The states also took concerted measures to ensure last-mile availability to farmers, the statement added.

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