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ITC grabs the market; sales surpass their pre-pandemic levels

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Despite major disruptions during the year, ITC posted robust growth in revenues and profits, surpassing pre-pandemic levels.



ITC’s customer focus, agility in seizing market opportunities, focus on execution excellence and proactive strategic interventions enabled ITC to achieve robust growth.

Overall, for FY 2021-22, gross sales of Rs 59,101.09 crore increased by 22.7 percent while EBITDA increased by 22 percent to Rs 18,933.66 crore. The pre-tax profit of Rs 19,829.53 crore grew 15.5 percent from the previous year, while the after-tax profit was Rs 15,057.83 crore, compared to the previous year’s Rs 13,031.68 crore.

The total comprehensive income for the year was Rs 15,631.68 crore (previous year Rs 13,277.93 crore). Earnings per share for the year were Rs 12.22 (last year Rs 10.59).

In recent years, a comprehensive strategy reset has been performed to design the structural drivers that will drive ITC’s next growth horizon and ensure the company remains future-proof, customer-focused and agile.

Each of ITC’s businesses has taken a turn to create new frontiers for the future, with improved competitiveness and a sharper focus on cost management to strengthen leadership or quickly improve market position in the case of newer segments.

As a core element of the ITC Next strategy, the company will continue to explore opportunities to develop disruptive business models anchored at the intersection of digital and sustainability, the two defining trends in the ‘new normal’, leveraging its institutional strengths.

The FMCG-Other segment performed resiliently, with sales growth of 8.6 percent on subdued demand. After a relatively weak first half, turnover grew by double digits in the second half of the year.

Staples and Convenience foods remained resilient even as the pace of sales growth slowed on a relatively high basis. Discretionary/Out-of-Home categories posted strong growth surpassing pre-pandemic levels, driven by a gradual improvement in mobility.

The gradual resumption of physical classes at educational institutions led to a gradual recovery in the Education & Stationery Products business, but sales remained below pre-pandemic levels. Segment EBITDA for the year grew 10 percent to Rs 1,448.97 crore, with margins maintained at 9.1 percent despite unprecedented inflationary headwinds.

To accentuate customer focus and agility and enable sharper focus in the context of the growing scale and complexity of operations, the Branded packaged foods companies have been reorganized into market-oriented clusters with integrated and powerful teams.

Targeted interventions made in the recent past have also increased ITC’s multi-channel go-to-market capability, leading to frequent expansion of the reach and availability of its products. Over the past five years, market and outlet coverage have grown 4x and 1.6x, respectively, while the dealer network has expanded to 6.4x over the same period.

The impact of these multidimensional interventions is evident in the substantial margin expansion of 650 basis points in Segment EBITDA over the past five years, even despite the significant inflationary headwinds observed during the year.

After an extremely challenging FY 2020-21, the Hotels segment witnessed a smart recovery, driven by the domestic leisure and wedding segments; Business travel also improved gradually, albeit well below pre-pandemic levels. An increase in revenues along with a relentless focus on cost management resulted in a positive swing of Rs 346.63 crore in the segment’s EBITDA despite significant disruptions caused by the two waves of the pandemic during the year.

The Agri Business segment delivered an excellent performance with segment revenue and earnings growth of 28.7 percent and 25.6 percent respectively. This was driven by strong growth in wheat, rice, spices and leaf tobacco exports, thanks to strong customer relationships, a robust sourcing network and flexible execution.

The Agri Business has been a strong backbone and a major source of competitive advantage for ITC’s FMCG and Cigarette business. Its scope and scale of operations has grown many times over the years and currently spans more than 4 million tons in 22 states and more than 20 agri-value chains.

The Paperboards, Paper and Packaging segment delivered strong growth of 36 percent in segment revenue and 54.7 percent in segment results. This was helped by a resurgence in demand in most end-user segments, higher realizations, enrichment of the product mix and exports.

Robust margin expansion of approximately 270 bps was achieved by leveraging the integrated nature of the business model, Industry 4.0 and other digital interventions.

During the year, ITC Infotech‘s consolidated total income grew by 16.8 percent to Rs 2,884.30 crore (last year Rs 2,469.29 crore). The pre-tax profit was Rs 719.64 crore (last year Rs 604.13 crore) and the net profit was Rs 541.04 crore (last year Rs 451.30 crore).

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