ITC - Template Is Set (With Scalability Plans): ICICI Securities
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ICICI Securities Report
ITC Ltd.’s fast moving consumer goods scale-up has ingredients to drive a long-term success story, in our view. We like the focus on:
creating sub-categories (adjacencies) over targeting (direct) share gains,
power brands and mother brands,
developing deep research and development capabilities,
dedicated Chief Operating Officer (structure) for large (food) categories and
calibrated spends with a focus on capital allocation.
ITC’s new product development aggression has been robust for the last few years. Furthermore, it displayed one of the best abilities to leverage previous year’s hygiene tailwinds (Savlon). That said, we believe ITC’s success in the personal care segment is slightly underwhelming.
We would (also) expect a faster scale-up in some of the premium products like coffee and chocolates (discussed below) even as ITC is looking to first develop/grow mass brands.
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