Business
Sanjiv Puri’s ‘Next’ strategy drives ITC into future-ready lane with smart innovation in FMCG, Hotels, Agri
Diversified consumer goods conglomerate ITC appears to be closing in on turning its fast-moving-consumer-goods (FMCG), agriculture and hotel segments as its main growth drivers, with chairman Sanjiv Puri shepherding the ‘Next’ strategy for its next horizon of growth through bold acquisitions, and disruptive digital innovation.
This new strategy is aimed at ensuring that the ITC remains future-oriented, consumer-centric, and nimble to create enduring value for stakeholders, something that the financial results are mirroring with FMCG and agriculture contributing nearly half of its total revenues in the April-June quarter.
The FMCG segment has been driven by higher demand for hygiene products, fragrances, spices, snacks, agarbattis and dairy products, with Salvon standing out as a growth engine of sorts.
ITC acquired Savlon from Johnson & Johnson in 2015, foraying into the disinfectant and antiseptic products market. Savlon crossed Rs 1,200 crore in consumer spends in 2020-21, growing more than 13 times since acquisition, making it the largest brand in the company’s personal care products portfolio, overtaking Vivel.
ITC has launched over 120 new products over the last one year, with product innovations in hygiene, nutrition and convenience segments. These include Savlon’s foray into surface and cloth disinfectant sprays, ‘neem’ based cleaning solutions Nimwash and Nimeasy, convenience-focused products such as ITC Master Chef Frozen Snacks, and scale up nascent categories and products such like B Natural juices, Fabelle chocolates amongst others.
In four years from 2016-17 to 2020-21, the FMCG segment’s earnings before interest, taxes, depreciation and amortisation (EBITDA) margins have improved by 640 bps.
FMCG on fast lane
The company today is one of the largest incubators of world-class Indian brands. ITC FMCG business has garnered consumer spends of over Rs 22,000 crore and delighting more than 150 million households.
Scaling up and fortification of existing growth platforms consisting of megabrands is an essential cog in the wheel of ITC’s next strategy. The company has expanded its purpose-led brands like Savlon, Aashirvaad, and Sunfeast into adjacent categories with remarkable success. These brands have immense headroom to grow given the relatively lower household penetration and rising per capita income. ITC is exploring more value accretive inorganic opportunities as an additional pillar of growth.
Puri’s strategy to make ITC future-ready manifests in Life Sciences and Technology Centre (LSTC). LSTC helped ITC to launch 120 products amid the pandemic to meet emerging preferences. Towards this goal, the company has launched 9 state-of-the-art integrated consumer goods manufacturing facilities (ICML) to create structural advantages and drive enhanced competitiveness is also worth mentioning.
The new-age consumer is a digital native with extensive engagement in social and e-commerce platforms. Recognizing this, ITC is identifying emerging trends in real-time through its Marketing Command Centres called ‘Sixth Sense’ to speedily launch differentiated products as also creatively engage with consumers.
Under the ‘Next’ strategy, Puri has clearly sought to explore opportunities to craft disruptive business models anchored at the intersection of digital and sustainability. It is deploying a smart ecosystem with an integrated real-time operations platform across the organization to enable next-generation supply chains and smart manufacturing with digitally enabled factories.
The company has adopted multi-dimensional digital interventions for smart sourcing, smart logistics across businesses, and Industry 4.0 implementation in manufacturing. This is in addition to customized apps to facilitate digital ordering and trade engagement.
It has fast-tracked its journey in e-commerce, to meet the growing preference for ‘contactless shopping’. This is besides strengthening the direct-to-consumer platform, ‘ITC e-Store’ to reach consumers in newer geographies and introducing more ‘digital first’ brands to leverage the growing e-commerce space.
ITC under Puri’s stewardship is unwavering in its resolve to build a formidable FMCG business. Revenues from its FMCG business during the quarter stood at Rs 3726 crore, accounting for 25 per cent of the quarterly revenues. The agriculture segment turned in revenues of Rs 4,091 crore, accounting for 28 per cent of the company’s total quarterly revenues of Rs 14,649 crore before netting out inter-segment revenues of Rs 1,764 crore.
Big data, AI in agri
ITC’s decades-old agri business, powered by the e-choupal network, also appears to be coming of age.
Once the legal framework is in place that allows farmers to sell their produce outside their areas of cultivation, there is a clear opportunity in agri-business, similar to what ITC e-choupal in India and Pinduoduo in China have done successfully with scale.
Both are examples of using big data, technology network and artificial intelligence (AI) in farming to offer a better deal to peasants, make agriculture a rewarding vocation and bring them closer to the global markets by building digital platforms linking retailers with products consumers.
These will enable aggregation from farmers, incentivise creation of warehousing networks along highways, village storage schemes and the digitised app-based system for direct marketing by farmers, a model that ITC e-choupal has broadly demonstrated over the years.
Baareh Mahine Hariyali, an ITC e-Choupal initiative, which has combined multiple initiatives of cropping intensity (wheat, rice and summer moong), productivity enhancement and market linkages.
As reported by ITC, over 2 lakh farmers have already benefited from the interventions under the ‘Baareh MahineHariyali’ programme — over 35,000 farmers who have adopted the package of practices reported doubling of income and those who have implemented the programme partially reported increase in their incomes by 30 per cent to 75 per cent.
ITC, under Puri, is now implementing e-Choupal 4.0 at scale to bring the benefits of the digital revolution to agriculture. Envisaged as a ‘phygital’ system, the e-Choupal 4.0 is designed as a crop agnostic integrated solution framework that will synergistically aggregate technologies like remote sensing, precision farming, drone-based services, quality assaying and e-marketplace.
ITC e-Choupal 4.0 aims to strengthen agricultural entrepreneurship and agri-tech startups through agri services aggregator models, thereby empowering farmers with next generation agricultural practices. The aim of the model is to sharpen personalisation of agri services driven by data and analytics.
This may well be the right time for ITC’s integrated agribusiness enterprises with significant presence across crop development, procurement, supply chain, processing and marketing to decisively shift gears through a tech-driven matrix mounted on apps, blockchain, warehousing, AI and big data.
With the launch of Super App ‘ITC-MAARS’ that will bring the next phase of transformation in its agri-business and support the e-choupal through strength and scale under Puri.
Hotels and more
ITC’s hotel business has acquired scale and market standing over time. It is now set for a turnaround with the management decision to pursue asset right strategy while simultaneously leveraging ITC’s world-class properties.
Against this backdrop, the move to refresh ‘Welcomhotel’ is a long-awaited development as it will help the company to generate leads and pipeline for management contracts. Also, the launch of a new boutique brand christened ‘The Storii’ to offer the new-age traveller curated nature experiences will help the company make inroads into the emerging segment.
Business
‘Its Prime Real Estate’: Anand Mahindra Expresses Awe At Grandiose Of Brabus Big Boy 1200
In the City of Dreams that is Mumbai, one of the biggest ‘dreams’ of most who live in the metropolis is to find an abode, that they can call it their own. Real estate in Mumbai is known for its sky-high pricing, with figures of Rs 10-15 crore not surprising anyone.
The Motorhome
Space is a major issue in city, given the paucity of it, in a region that encompasses millions. However, what happens when the space is not only available but also mobile? That is precisely what a ‘motorhome’.
It may not been the most commonly seen or discussed avenue in this part of the world, but in other parts of the world, particularly in the US, an RV or recreational vehicle is the way of life, either by choice or by circumstance.
Mahindra Group chairman, Anand Mahindra recently reacted to one such motorhome. In a post on X, he shared a minute-long clipping of the Brabus Big Boy 1200. This is an uber-luxe, profligate motorhome manufactured by the German automobile company Brabus.
Mahindra, while reacting to the video of a person showing around the bus said, That’s not transport. It’s prime real estate.”
And one may arguably agree with Mahindra on this. The vehicle is extravagant and has a length of 12 meters or 39.4 ft and over 30 square meters or 320 sq ft. For context, the average size of homes in city of Mumbai hovers around 400-700 sq ft.
What Are The Features Of This Motorhome?
In addition, the vehicle also has two electrically extendable slide-outs on each side. These slide-outs can extend the bedroom and saloon to a width of 4.50 meters.
In addition, the motorhome also consists of a double bed measuring 160 x 200 centimeters.
A closet is integrated into the rear wall of the vehicle.
For amusement, the vehicle also has a desk and a 43-inch 4K television. Here one could watch TV programs that have been made available on the system play games on the integrated Playstation 5 system.
In addition, one can also connect to the internet through the Starlink system.
When it comes to the vehicle, it runs on a12.8-liter six-cylinder turbodiesel engine. This engine can deliver 390 kW / 530 hp and can generate a maximum torque of 2,600 Nm.
The vehicle is priced at around USD 1.5 million or a whopping Rs 12 crore.
Business
Maha will play key role in achieving India’s $5 trillion economy goal: Minister Tatkare
Nagpur, Dec 21: Representing Maharashtra in the pre-Union Budget meeting held in Jaisalmer, Minister Aditi Tatkare on Saturday assured that Maharashtra would play a pivotal role in India’s journey towards becoming a $5 trillion economy.
She emphasised the need for special financial assistance to the state in the upcoming Union Budget.
Minister Tatkare presented Maharashtra’s vision, highlighting its strategic role in realising the Prime Minister’s goal of a ‘Viksit Bharat’ by 2047.
Minister Tatkare outlined several critical issues and proposals for inclusion in the Union Budget. She urged the finance minister for central assistance for state Capital Investment by enhancing the allocation under the Scheme for Special Assistance to States for Capital Investment.
She emphasised the need for streamlining fund disbursement timelines to provide qualifying states with a minimum one-year utilisation window.
In the wake of rapid urbanisation, Minister Tatkare called for central support to tackle the challenges faced by the state.
“Maharashtra, with urbanisation expected to surpass 50 per cent in the upcoming census, faces challenges in resource mobilisation for urban local bodies (ULBs). The state government urges support for ULBs to access long-term loans for planned urban development and infrastructure enhancement,” she said.
Under the MukhyaMantri Saur Krushi Vahini Yojana 2.0, aimed at solarising agricultural feeders, Minister Tatkare sought increased targets and funding allocations for Maharashtra.
She requested expansion of Battery Energy Storage System (BESS) capacity from 500 MWh to 9,000 MWh to meet the state’s energy storage goals.
In order to further boost the modernisation of the home department, Minister Tatkare sought funds on a 60:40 basis, for projects such as digital forensic labs, mobile forensic vans, AMBIS systems, and the Cyber Security Project (Rs 837.86 crore).
She highlighted the need for funding major initiatives like Dial 112 emergency services integration and Maharashtra Police Station CCTV projects.
She urged financial support for faster case disposal through enhanced infrastructure for the judiciary.
She requested funding for constructing the Bombay High Court Complex in Bandra (East), estimated at Rs 3,750 crore.
Further, to push the implementation of the Mumbai Metropolitan Region (MMR) economic master plan, Minister Tatkare proposed a special package.
The master plan is aligning with NITI Aayog’s vision to transform MMR into a national growth hub by 2030.
According to NITI Aayog, the MMR has a potential to increase its GDP to $300 billion by 2030 from the present level of $140 billion.
The Centre’s public policy think tank has asked the Maharashtra government to concentrate on seven growth drivers and attract investment of $125-135 billion from the private sector to achieve the target.
In a bid to push the state government’s ambitious plan to make Maharashtra drought-free, the state government has sought central government support to include state-funded river-linking projects like Wainganga-Nalganga and Damanganga-Godavari under the National Interlinking of Rivers Scheme.
Further, the state government appealed to the Centre to ease revenue expenditure pressures to create fiscal space for capital projects and establish a ‘Kisan Vishesh Sahayata Nidhi’ to compensate farmers affected by trade policy interventions.
The state government also appealed for the enhancement of funding for ongoing schemes like the Jal Jeevan Mission and financial assistance for disaster-affected areas.
Minister Tatkare said the comprehensive representation highlighted Maharashtra’s ambitions and challenges, ensuring the state’s priorities were well-articulated for the Union Budget deliberations.
She reiterated Maharashtra’s commitment to becoming a cornerstone of India’s economic growth and development trajectory.
Business
Domestic stock markets to end 2024 on positive note, Nifty clocks 13 pc gain
New Delhi, Dec 21: Riding on resilient economic growth, the domestic stock markets are ending 2024 on a positive note, with Nifty registering a 13 per cent gain (year-to-date) — its ninth consecutive year of positive gains, a Motilal Oswal Wealth Management report said on Saturday.
The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277 in September.
In fact, the markets navigated significant events, such several global geo-political issues, General Elections and Budget in India, and any dips were swiftly met with strong buying activity, the report mentioned.
“The year 2025 could unfold as a tale of two halves. The first half may continue to see market consolidation, while a recovery could take place in the second half,” it added.
In the last two months, the market has corrected 11 per cent from its all-time high, amid selling by foreign institutional investors (FIIs) due to a combination of domestic and global factors.
Going forward, the Indian markets are likely to face significant influences from a combination of global and domestic economic events.
The anticipated rate cut by the RBI in February, the ongoing trend of US rate cuts, and the expectations surrounding trade policy changes post Donald Trump taking over as US President in January will contribute to market volatility.
“Additionally, the Union Budget in February will offer important signals to the market. With a fragile global economic environment and mixed macroeconomic factors at home, the market is expected to remain in consolidation mode in the near term,” the report noted.
Earnings are expected to recover in H2 FY25, driven by increased rural spending, a buoyant wedding season, and pickup in government spending.
“We further expect earnings to gain momentum, delivering a 16 per cent CAGR over FY25-27E. We remain optimistic about the long-term trend, given the strength of corporate India’s balance sheets and the prospects for robust, profitable growth,” the report said.
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