ITC Expects Slow Recovery In Consumption

ITC’s Bingo chips packets at a street stall in Kannauj, Uttar Pradesh, India. (Photographer: Udit Kulshrestha/Bloomberg).

ITC Expects Slow Recovery In Consumption

ITC Ltd. expects recovery in urban consumption to be relatively muted, while that in the hinterland would take a bigger hit amid disruption caused by the pandemic’s second wave.

“Rural demand, which remained strong in FY21 on the back of robust agricultural output, government support and reverse migration, may also be blunted by the large-scale spread of the virus to the hinterland in the second wave,” the cigarettes-to-consumer goods maker said in its annual report.

The company said while the Indian economy faces "multi-dimensional challenges" in the short term, it remains one of the most dynamic major economies in the world with huge potential. “With structural drivers of growth firmly in place, the pace of economic growth is expected to pick up over time.”

Policy announcements in this year’s union budget, it said, are expected to provide further impetus to build India’s competitiveness and foster inclusive growth. “Higher capital expenditure outlay along with heightened spends on agriculture and rural infrastructure development augur well for the economy and will spur a virtuous consumption-investment-employment cycle,” the report said.

The conglomerate launched over 120 products in the year, while also ramping up its direct and indirect reach. Its direct reach rose 1.3x and indirect increased 1.1x compared to pre-Covid levels. The company doubled its network of stockists to target rural markets to drive growth, mitigate the impact of disruptions in wholesale channel and service emerging demand.

As demand for hygiene products picked up during the pandemic, ITC’s hygiene brand Savlon has become a Rs 1,200-crore brand. During the year, the company’s portfolio of over 25 brands, including Bingo, Yippee, Aashirvaad among others represents an annual consumer spend of over Rs 22,000 crore.

ITC’s Market-Leading Brands

  • Aashirvaad in branded atta, or wheat flour.

  • Savlon in surface disinfectants.

  • Sunfeast in cream biscuit segment.

  • Bingo in bridges segment of snack foods.

  • Classmate in notebooks.

Brands At No. 2 Position

  • Yippee in noodles.

  • Fiama in liquid bodywash category.

  • Mangaldeep in agarbathis, or incense sticks.

  • Engage in deodrant segment.

The maker of Bingo chips also engaged with ecommerce platforms and aligned its supply chain to deliver its products. Sales through its ecommerce channel more than doubled in the last financial year.

In the year ended March, revenue from operations rose 3.7% year-on-year to Rs 48,525.5 crore, while net profit fell 14% to Rs 13,031.6 crore.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.