ITC Limited Q1FY21 Results
ITC Limited Q1FY21 Shareholding Pattern
Shareholding change QoQ of the street’s Cigarette stories.— JST Investments (@JstInvestments) July 21, 2020
Retail’s approval for ITC continues.
In addition to brightstar, Mr Damani also holds 4.97% stake in individual capacity as of June 2020.#Q1FY21withJST pic.twitter.com/HgbjSysrTv
Fun Facts on ITC Limited
- “ITC Limited” was originally named ‘Imperial Tobacco’ and was later renamed ‘Imperial Tobacco Company of India Limited,’ succeeding W.D. & H.O. Wills on 24 August 1910 as a British-owned company registered in Calcutta.
- Since the company was largely based on agricultural resources, it ventured into partnerships in 1911 with farmers from the southern part of India to source leaf tobacco.
- Under the company’s umbrella, the ‘Indian Leaf Tobacco Development Company Limited’ was formed in the Guntur district of Andhra Pradesh in 1912. The first cigarette factory of the company was set up in 1913 at Bangalore.
- Though the first six decades of the company’s business was primarily devoted to the growth and consolidation of the cigarette and leaf-tobacco businesses, ITC’s packaging & printing business at Munger was set up in 1925 as a strategic backward integration for ITC’s cigarettes business.
- It is today India’s most sophisticated packaging house. More factories were set up in the following years for cigarette manufacturing across India.
- In 1928, construction began for the company’s headquarters, the ‘Virginia House’ at Calcutta.
- ITC acquired Carreras Tobacco Company’s factory at Kidderpore in 1935 to further strengthen its presence.
- The company was converted into a Public Limited Company on 27 October 1954. The first step towards Indianization was taken in the same year with 6% of Indian shareholding of the company. ITC Limited also became the first Indian company to foray into consumer research during this time.
- The name of the company was changed to ‘I.T.C. Limited’ in 1974. The Indian shareholding grew further to 40% during this time. ITC Limited entered into the hospitality sector with hotel business in 1975 with the acquisition renaming of ITC Welcomgroup Hotel Chola in Madras. ITC chose the hospitality sector for its potential to earn high levels of foreign exchange, create tourism infrastructure, and generate large-scale direct and indirect employment.
- Y.C. Deveshwar took over as the company’s chairman in 1996 and the corporate governance structure was re-crafted to support the effective management of multiple businesses. ITC Limited exited from the edible oil business and financial services; sold the ITC Classic Finance Limited to ICICI Limited and handled the ‘Sundrop’ business to ConAgra Foods Limited in 1998. In the year 2000, an innovative initiative for farmers called ‘e-Choupal’ was started in Madhya Pradesh in 2000. The same year witnessed the launch of ITC’s ‘Wills Sport’ range of casual wear with a first retail outlet in New Delhi and ITC’s entry into stationery products and gifting business introducing the ‘Expressions’ range of greeting cards and ‘Classmate’ notebooks.
About ITC Limited
ITC Limited is an Indian multinational conglomerate company headquartered in Kolkata, West Bengal. Established in 1910 as the Imperial Tobacco Company of India Limited, the company was renamed as the India Tobacco Company Limited in 1970 and later to I.T.C. Limited in 1974.
The company now stands renamed to ITC Limited, where ‘ITC’ today is no longer an acronym or an initialized form.
ITC Limited has a diversified presence across industries such as Cigarettes, FMCG, Hotels, Packaging, Paperboards & Specialty Papers, and Agribusiness.
More on ITC Limited Businesses
- On 27 July 2020, ITC Limited acquired 100% of the equity share capital of Sunrise Foods in a 2150 crore deal.
- Consequent to it, Sunrise and its two subsidiaries, Sunrise Sheetgrah Private Ltd and Hobbits International Foods Pvt Ltd, have become wholly-owned subsidiaries of ITC Limited, it added.
- Sunrise Foods Private Limited (SFPL), an Indian company primarily engaged in the business of spices under the trademark ‘Sunrise’, subject to fulfillment of various terms and conditions as specified in the SPA.
- Sunrise is a clear market leader in eastern India in the fast-growing Spices category with a rich heritage and brand legacy of over 70 years. Over the years, the brand has built a loyal consumer franchise, anchored on a differentiated product portfolio tailored to regional tastes and preferences, both in the basic and blended spice segments.
- Upon consummation of the transaction, the proposed acquisition will augment the Company’s product portfolio and will also align with the Company’s aspiration to significantly scale up its Spices business and expand its footprint across the country.
- The deep consumer connects of SFPL in the focus markets, together with synergies arising out of the sourcing and supply chain capabilities of ITC’s Agri-Business and its pan-India distribution network, will provide significant value creation opportunities for your Company.
- The proposed transaction is also in line with ITC’s philosophy of enhancing the competitiveness of Agri value chains in India whilst making a meaningful contribution to enhancing farmer incomes.
All Its Brands
New Launches During the Lockdown
During the year, ITC Limited also launched over 60 new products. Some of which are shown below:
Competitive Value chains built by ITC Limited to benefit Farmers
Despite the challenging conditions prevailing during the year and the significant slowdown following the outbreak of the pandemic, ITC’s FMCG-Others businesses recorded Segment Revenue of Rs12844.23 crores representing an increase of 5% over the previous year (on a comparable basis, excluding the Lifestyle Retailing Business).
Branded Packaged Food
With consumer spends of nearly Rs 15000 crores anchored on robust brands that reach one out of every two Indian households, the Company sustained its market standing as the 3rd largest food company in the country (publicly listed).
During the year, the Company’s brands have been successful in entering an additional 10.5 million households (source: HHP, Kantar World Panel, MAT Dec’19).
Fabelle’s chocolates continue to receive an excellent response from discerning consumers setting new benchmarks in the luxury and FMCG chocolate segments.
In the Instant Noodles category, YiPPee! noodles sustained its overall market standing as a strong, competitive No. 2 brand in the noodles space
In the Biscuits category, Dark Fantasy Choco Fills sustained its high growth trajectory driven by superior product attributes, focused communication, efficient distribution, and consumer activation.
The recently launched Bounce Cake variants continue to receive an excellent response from consumers and are now available in all target markets.
In the Spices category, during the year, your Company expanded its geographical footprint to 17 states and recorded healthy volume growth. The industry offers significant opportunity for migration from unbranded to branded spices, the salience of which is low
Increasing consumer traction for ‘Bingo!’ Potato Chips and Tedhe Medhe continued to drive growth in the Snacks Business.
Sunbean’ gourmet coffee, which is available across all ITC Hotels and select e-Commerce platforms, continues to receive an excellent response from discerning consumers.
In the Dairy & Beverages Business, the ‘B Natural’ range of juices anchored on the proposition of ‘100% Indian Fruit, 0% concentrate’ with the added ‘goodness of fiber’, continues to deepen consumer connect by providing a more nutritive and ‘natural’ tasting experience.
The ‘Aashirvaad Svasti’ fresh dairy portfolio comprising pouch milk, pouch curd, and paneer, gained strong consumer traction on the back of high-quality standards and superior taste profile, in Bihar and West Bengal where the portfolio is currently available.
Company’s Personal Care Products Business consolidated its market standing across categories driven by sustained focus on innovation, portfolio premiumization, and expansion of distribution reach, both in traditional trade as well as e-Commerce.
In the Personal Wash & Hygiene category, the Business augmented the ‘Fiama’ body wash range with the launch of ‘Fiama’ Scents in two exciting variants, thereby strengthening the brand’s ‘mood upliftment’ value proposition.
In the Fragrances category, ‘Engage’ consolidated its position as the second-largest brand in the category. Over the years, the brand has been built on disruptive innovations anchored on ‘affordability’ and ‘convenience’ thereby driving category expansion.
During the year, the Business introduced ‘Engage L’amante’, a world-class range of masstige perfumes, and received encouraging response from the consumers
The Education and Stationery Products industry was adversely impacted during the year due to sluggish demand and tight liquidity conditions.
The situation was exacerbated by the onset of the COVID-19 pandemic towards the close of the year which led to the postponement of the academic session across the country.
This also coincided with the peak season for sales.
The Agarbatti industry witnessed a marked deceleration in growth rates during the year in line with the slowdown in consumption in the broader economy.
The trend of premiumization that had gathered pace in recent years, saw some moderation during the year with affordability considerations amidst the economic slowdown resulting in higher demand for ‘value for money’ packs.
2019-20 turned out to be a mixed bag for the domestic Hospitality industry. While General Elections and sluggish economic activity weighed on the occupancy and room rates during the first half of the year, the second half witnessed a pick-up in growth momentum driven by an increase in inbound & domestic tourism, meetings & conventions, and retail segments.
Reduction in GST rates announced in September 2019 also contributed to the recovery.
However, the revival in demand was short-lived with the onset of the COVID-19 pandemic, the impact of which was felt as early as February 2020, severely disrupting operations.
After witnessing a robust 2018-19 in terms of strong end-user demand and higher realizations on the back of higher pulp prices, the Paper and Paperboard industry remained relatively muted in 2019-20.
The general economic slowdown, sharp fall in rural demand, and tight liquidity conditions impacted end-user demand across segments.
Pulp prices which started correcting towards the end of 2018-19, declined sharply during the year due to contraction in global demand and higher inventory levels.
Also Watch: ITC Limited Case Study
New Delivery Models to Ensure Availability
- Innovative partnerships with Dominos, Swiggy, Zomato, Dunzo, Amway, etc
- ITC Store on Wheels reaching out to consumers’ homes
- ITC’s FMCG products are available in 6 million retail outlets
- ITC’s Distribution value chain provides significant sustainable livelihoods in India
Balance Sheet of ITC Limited
P&L Statement of ITC Limited
Segment-Wise Revenue of ITC Limited
Cash Flows of ITC Limited
The Cash flow from operations increased from Rs 12583 Cr in FY19 to Rs 14690 Cr in FY20. The Free Cash Flow increased from Rs 9414 Cr in FY19 to Rs 12249 Cr in FY20.
Concall Takeaways and Commentary – Q1FY21
That’s it for now. Hope you enjoyed reading it 🙂
Read more Research Reports here.
Cover Image: Twitter