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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.


Maha has maximum GST dues pending with Centre, Congress says ‘stepmom treatment’




Maharashtra, which contributes the highest to the Centre’s GST kitty, has the maximum amount outstanding for the past two years of the Covid-19 pandemic, a RTI reply has revealed.

The revelations came in response to a RTI query filed by activist Binod Agarwal from the Ministry of Finance, Under Secretary (State Taxes-II) and CPIO Mahendra Nath.

State Congress General Secretary Sachin Sawant said that the RTI reply has confirmed what the Maha Vikas Aghadi government has been saying always – that the Bharatiya Janata Party-led Centre is adopting a “step-motherly treatment” towards Maharashtra.

According to the RTI response, of the total GST compensation of Rs 277,752 crore due to states from April 2020-March 2021, Maharashtra’s share was the highest at Rs 40,398 crore.

From this amount, Rs 21,697.65 crore was released from cess proceeds and another Rs 11,977 crore, leaving an outstanding balance of Rs 6,723 crore to the state.

Similarly, for the period April 2021-July 2021, of the total GST compensation of Rs 111,419 crore due to states, Maharashtra accounted for Rs 15,060 crore, the highest.

From this amount, Rs 13,782.36 crore was by way of back to back loan, and Rs 1,278 crore is still outstanding to the state.

In fact, from April 2019 till November 2021, Maharashtra’s dues were Rs 50,374.68 crore, of which it received Rs 11,111.15 crore and Rs 13,782.30 crore as back to back loan, leaving a shortfall of Rs 25,481.23 crore.

In the past couple of years, the MVA government has been continuously pleading with the Centre to release its GST dues and Chief Minister Uddhav Thackeray had shot off a letter to Union Finance Minister Nirmala Sitharaman on the same in December 2019, a month after assuming office.

Thackeray met the PM in June to raise the issue along with other pending matters and Deputy Chief Minister Ajit Pawar and Congress have also raised the matter with the Centre on several occasions.

The ruling Shiv Sena-Nationalist Congress Party-Congress leaders, including NCP President Sharad Pawar, have demanded on several occasions that the Centre should expedite the release of the state’s GST dues to help it tackle the Covid-19 pandemic and other issues effectively.

In September 2020, Thackeray had slammed the Centre for not giving its GST dues and forcing the state to take loans, and a month later demanded that if the GST system has failed “then the Centre should it” and revert back to the old system.

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Diesel, petrol prices unchanged since early November




Oil marketing companies have continued to keep prices of diesel and petrol unchanged across major Indian cities post revision of duties by the Centre and state governments on the Diwali eve in early November.

Accordingly, diesel and petrol prices in Delhi remained static at Rs 86.67 per litre and Rs 103.97 per litre, respectively on Monday.

In the financial capital Mumbai, they were priced at Rs 94.14 and Rs 109.98, respectively.

Prices also remained static in Kolkata at Rs 89.79 and Rs 104.67, respectively.

In Chennai, petrol and diesel rates remained at Rs 91.43 and Rs 101.40, respectively.

Across the country as well, the price of the fuel largely remained unchanged on Sunday but the retail rates varied depending on the level of local taxes.

The excise duty cut by the Centre on November 3 was the first such exercise since the onset of Covid pandemic.

In fact, the government had revised excise duty on petrol and diesel sharply in March and again in May 2020 to mobilise additional resources for the Covid relief measures.

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Equity indices fall marginally in early trade




The 30-scrip Sensitive Index (Sensex) declined marginally on early trade session on Monday.

At 9.45 a.m. the S&P BSE Sensex traded at 57,044 points, down 0.13 per cent.

It opened at 57,028 points from the previous close of 57,107 points.

Till now it touched a low of 56,382 points.

Besides, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 17,338 points after closing at 17,026 on Friday.

It traded at 16,985 points, down 0.21 per cent during the early-morning trade session.

Adani Green, Adani Transmission, Adani Ports, Bandhan Bank and General Insurance were some of the top losers.

On the contrary, Reliance Industries, Indusind Bank and Dr. Reddy’s Labs were the top gainers in early trade.

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