ITC chairman announces investment of Rs 20,000 cr for 'medium term'

ITC will invest Rs 20,000 crore in the medium term as it has “unwavering confidence” in India’s economic growth, said Sanjiv Puri, chairman and managing director of the consumer goods maker, on Friday.

Puri told shareholders at the company’s annual general meeting ITC was committed to partner the country in becoming the world’s third largest economy by building a “future tech, climate positive, innovative and inclusive national enterprise of pride”.

“Our confidence in the India story is unwavering and is reflected in your company’s investment outlay of about Rs 20,000 crore in the medium term,” he said.

External factors were challenging, but the value added by the company's economic activities in the last four years aggregated to around Rs 2,42,000 crore, of which over Rs 1,61,000 crores accrued to the exchequer. In four years, the cigarettes-to-hotels company’s overall revenues grew at a compound annual growth rate (CAGR) of 10.8 per cent to about Rs 79,000 crore.

Non-cigarette revenues grew at a CAGR of 11.6 per cent and account for about 65 per cent of net revenue. “Segment EBIT posted a growth of 17.9 per cent,” said Puri, referring to earnings before interest and taxes.

The company’s hotels and cigarettes businesses were affected during the pandemic but have “charted a smart recovery” since then. “The revenue and results of the cigarettes business over the last two years grew at a CAGR of nearly 13.5 per cent with volumes surpassing pre-pandemic levels.”

The hotels business emerged “structurally stronger”, clocking a revenue of nearly Rs 3,000 crore and EBITDA crossing Rs 1,000 crore in FY24.

Export has been a “growth vector” for ITC and brand strength has enabled the company to take its products and services to more than 100 global markets.

“Foreign exchange earnings of your company and its subsidiaries have more than doubled since FY20 to over Rs 9,500 crore.”

ITC is pursuing “strategic investments” in neighbouring markets. The FMCG facility set up by the company’s subsidiary, Surya Nepal Private Limited, and ITC Ratnadipa, set up by wholly owned subsidiary WelcomHotels Lanka Private Limited, served as examples.

“As part of the asset-right strategy for ITC Hotels, opportunities with focus on proximal markets will continue to be explored over time,” Puri said.

“Today, despite our growing footprint, nearly 90 per cent of all raw materials are locally procured,” he said, highlighting the company’s contribution to ‘Make in India’ domestic manufacturing campaign.

The company’s extended manufacturing network of more than 200 factories supports local entrepreneurship and sustainable livelihoods.

In the last two years, investments in three luxury hotels, manufacturing facilities, and the two-fold expansion of the company’s distribution infrastructure have generated “significant” livelihoods, he said.

“Investments underway in two state-of-the-art manufacturing facilities as well as an IT & Knowledge Centre will also add to this potential,” said Puri.