From Hotel Business Demerger to Cigarettes: Highlights of CMD Sanjiv Puri’s ITC AGM Speech
Written by Sanjay Kumar
ITC Limited
Conglomerate company
- Headquarters: Kolkata
- Subsidiaries: ITC Hotels, ITC Infotech India Ltd., MORE
- Revenue: 48,151 crores INR (31 March 2021)
- Area served: Indian subcontinent
- Founded: 24 August 1910, Kolkata
- Divisions: ITC Hotels; ITC Paperboards and Specialty Papers Division; ITC Infotech; Sunrise Foods
- Key people: Sanjiv Puri; (Chairman & MD)
During the ITC AGM 2023, Sanjiv Puri, the Chairman and Managing Director, emphasized that the recently announced demerger of ITC Hotels from the parent company would have multiple positive impacts. He highlighted that this move would create value for ITC shareholders, enhance capital allocation strategies, and optimize asset efficiency ratios.
ITC, a prominent FMCG player, convened its 112th Annual General Meeting on August 11, during which Puri addressed the company’s shareholders. He underscored that this reorganization would not only lead to improved capital allocation but also bring about enhanced value for shareholders. Additionally, he pointed out that institutional synergies would be harnessed effectively.
Regarding the demerged entity, Puri expressed that ITC’s sustained interest in it would provide a stable foundation, fostering confidence among partners, investors, and employees. This approach would also allow the newly formed entity to capitalize on ITC’s institutional strengths, including its enduring goodwill, renowned brands, and robust governance processes.
Puri further elaborated that the proposed reorganization would empower ITC to shape its future growth trajectory as a dedicated player in the hospitality sector. The company would enjoy a strong financial position, coupled with a promising pipeline of projects, which was particularly advantageous given the industry’s projected growth.
Notably, he shared that in FY23, ITC’s hotel business had delivered an impressive performance, with segment revenue doubling and EBITDA margins expanding by a significant 930 basis points compared to FY20. This success positioned the ITC hotel business favorably to harness the abundant growth opportunities within India’s thriving tourism landscape.
Shifting focus to the FMCG business, Puri highlighted the remarkable achievements in building a portfolio of over 25 vibrant FMCG brands in a relatively short span. The FMCG business had witnessed substantial growth, with turnover increasing by 1.8 times, and EBITDA margins expanding by 770 basis points. He emphasized that ITC’s world-class FMCG brands, including paperboards, packaging, and agri products, had gained global recognition by being exported to more than 100 countries.
Puri emphasized that the non-cigarette segment had become a significant driver of ITC’s financial performance, accounting for 67% of revenue and 28% of segment EBITDA.
As of 11:40 am, the trading data on the BSE indicated that ITC’s share price was experiencing a marginal decline of 0.94%, settling at ₹447.20 per share.
