100 Years of ITC

BY
Anand kumar Singh & Avinash Kumar Singh
 Journey of ITC
• It is formed in 1910 by British and company
was registered in Calcutta with a small office
in Radhabazar lane.
• It started with one expatiate manager & one
acquired cigarette manufacturing facility in
Munger (Bihar) .
 Contd………..
• Today ITC is the leading FMCG marketer in
India .
• Clear market leader in the Indian Paperboard
& packaging industry.
• Second largest hotel chain
• Country’s foremost agri business player
Various Products of ITC
 Financial Highlights:1996-2010
(RS in crores) March 31,1996 March31,2010
Gross Income 5188 26863
PAT 261 4061
Return on net assets % 28 41

Net Assets Employed 1886 14957

Net Worth 1121 14064

Market Capitalization 5571 114000

Shareholder Return in the period : 24.3%

 ITC - Business Portfolio

ITC

FMCG: Agri Business Paperboard

Cigarettes Hotels Leaf Tobacco Paper &
Other FMCG Agri Commodities Packaging
 ITC’s Cigarettes Business
 Market leadership
 Powerful brands across segments
 Leadership in all segments - geographic & price
 Extensive distribution network
 Over 900 wholesale dealers serving more than 1 million
retail outlets
 World-class state-of-the-art technology and
products
 Investment - Rs.10 billion in six years
 Exciting long term growth potential
 Cigarettes: Growth potential
 Cigarettes account for only 14% of tobacco consumed in India
unlike world pattern of 85% due to prolonged punitive
taxation
 Cigarettes (14% of tobacco consumption) contribute nearly
85% of Revenue to the Exchequer from tobacco sector
 Of the 58% of adult Indian males who consume tobacco,
barely 15% can afford cigarettes
 Biri : Cigarettes ratio = 10 : 1
 Annual per capita adult cigarette consumption in India is
appx. one tenth world average : 141
 Future growth depends on relative rates of growth of per
capita income and moderation in taxes
 P er C apita A dult C igarette C onsum ption
(S ticks)

1753
1 662

11 90

561
48 8

141

USA C hin a P akistan N epal India W orld A vg.

Source : Based on Cigarette consumption data(2003) from

“World Cigarettes”,ERC Group plc.
 FMCG Business

 4 chosen categories:
 Staples
 Aashirvaad Atta, Salt, Spices
 Snack Foods
 Sunfeast Biscuits
 Confectionery
 Candyman, mint-o
 Ready to Eat
Kitchens of India, Aashirvaad ReadyMeals, Sunfeast Pasta

Aashirvaad Atta: current market leader amongst national branded

players
Sunfeast Biscuits:Differentiated & innovative products;
 ITC’s Hotel Business

• Manages 15 full service mid-market properties

under the Fortune Hotels brand
– 100% subsidiary company : Fortune Park Hotels Ltd.
• Also operates 35 properties under the
‘WelcomHeritage’ brand
– Maharaja Heritage Resorts Ltd. 50% JV with Marudhar
Hotels (P) Ltd.
 Luxury hotel rooms - East Asia

80000
70000
60000
50000
40000
30000
20000
10000
0
HongKong Singapore India

Source: Compendium of Tourism statistics, WTO

 ITC’s Hotel properties
• ITC Hotel Maurya Sheraton & Towers,New Delhi
• ITC Hotel Grand Maratha Sheraton & Towers,Mumbai
• ITC Hotel Sonar Bangla Sheraton,Kolkata
• ITC Hotel Grand Central,Mumbai
• ITC Hotel Windsor Sheraton & Towers,Bangalore
• ITC Hotel Kakatiya Sheraton & Towers,Hyderabad (thru’ a 68% holding in
Srinivasa Resorts Ltd.)
• ITC Hotel Park Sheraton & Towers ,Chennai (managed property)
• WelcomHotel Rajputana Palace Sheraton,Jaipur
• WelcomHotel Chola Sheraton, Chennai
• WelcomHotel Mughal Sheraton,Agra
• WelcomHotel,New Delhi
• WelcomHotel Rama International , Aurangabad
• WelcomHotel Vadodara (thru’ associate company)
• WelcomHotel New Delhi
• WelcomHotel Grand Bay,Visakhapatnam (managed property)
 Indian paperboard market
 Annual paperboard demand – appx. 1 million
tonnes
 Fragmented capacity & obsolete technology
 Low per capita usage at 0.75 kg - 1/7th global
average
 Indian paperboard market growing at 7% p.a.
 Value Added Coated board - the fastest growing
segment (20% p.a.) in India driven by the growing
sophistication of the consumer
 Indian Leaf Tobacco industry

 India - the second largest producer of tobacco

 But, India’s share is only 7% in world tobacco trade

 ITC - India’s largest buyer, processor, consumer & exporter

of cigarette tobaccos
e-Chaupals
Gross Income
Return on Invested Capital
Return on capital employed
 ITC
One of India’s most valuable corporations
 One of the 8 Indian Companies to feature in ‘Forbes A-list’ for
2004

Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are
rated as the ‘most attractive companies for investors’
 Only Indian FMCG Company to feature in Forbes 2000 List

A comprehensive ranking of world’s biggest companies measured by a composite of
sales, profits, assets & market value
 Among top in :

Sustained value creation (BT-Stern Stewart survey)

Operating profits

Cash Profits
 Ranks No. 8 among Indian listed Companies by market cap.
(@31/03/06)

No. 1 in FMCG Sector; 6th amongst Private Sector
 Rated as one of India’s Most Respected Companies (IMRB-
Businessworld Survey 2006)