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Why did ITC LTD. share price move today?collapse benzinga

Why did ITC LTD. share price move today?

ITC shares are trading lower with other FMCG stocks, possibly as the RBI Governor flagged El Nino concerns.

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Shareholding Info
  • Foreign institutions-FII
    43.35 %
  • Other domestic institutions
    32.65 %
  • Retail and other
    14.54 %
  • Mutual Funds
    9.47 %

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Key Indices in NSE

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About ITC


A diversified conglomerate that has businesses spanning from FMCG, hotels, agri business, paperboards and packaging and information technology, ITC is one of the country’s foremost private sector companies which is acknowledged for being one of the most valuable business corporation with a GSV of Rs. 90,104 crore as well as a net profit of Rs. 15,058 crore.

The company was established on 24 August, 1910 with the name - Imperial Tobacco Company of India Limited. As the ownership of the company Indianised, India Tobacco Company of India Limited became Indian Tobacco Company Limited in 1970 and simply I.T.C. Limited in 1974. After this, in 2001, the fullstops in the name were removed, leaving ITC Limited, where ITC is no longer an acronym, due to the company’s multi-faceted products portfolio.

The first six decades of its existence, the company only worked in the growth and consolidation of leaf tobacco and cigarettes. The packaging and printing business was first set up in 1925, after which the company launched its first hotel with the acquisition of another hotel in Chennai, calling it ‘ITC - Welcomgroup Hotel Chola’. Now, they have over 113 owned as well as managed properties across the country and some globally, under four names - ITC Hotels, Fortune Hotels, WelcomHeritage and Welcomhotel. The agriculture sourcing business was launched in 1990 and the IT solutions subsidiary came into existence in 2000. In 2001, the company launched their own branded packaged foods. They introduced the ‘Kitchens of India’ which served ready made Indian gourmet meals. In 2002, they launched confectionaries and staples and the next year launched Sunfeast in the biscuits segment. Ever since, they have launched many products which notably include Bingo!, Safety Matches and personal care products like Fiama, Vivel, Charmis and more. As recently as 2010, the company launched hand rolled cigars - Armenteros.

Core Activities & Products


ITC businesses are very varied and there are now hundreds of products. The main sectors of business are:

  1. Packaging: This is the biggest value-added converter in South Asia of paperboard packaging. 70,000 tonnes of paper, laminates and paperboards are converted per annum into a varied number of value-added packaging solutions for liquor, food and beverages, cigarettes, quick service restaurants, personal and home care products and consumer goods industries. Since 1925, born out of the cigarette business, it is a very sophisticated set up and are the first choice for sustainability suppliers. They supply to Tata Consumer, Nestle, Hindustan Unilever, P&G, British American Tobacco, GSK, Colgate, Agio Cigars, Pernod Ricard, Royal Enfield, Burger King and more.

  • Paperboards and Speciality Papers: The business is a leader in product range, market reach, volume and environmental performance as it provides packaging, graphic, communication, printing, writing and speciality paper requirements. The company is serving a huge cross-section of industries. They provide electrical insulation papers, Bio-based Barrier Coated Board, decorative laminate base added to writing and printing papers amongst more. The brands that are supplied include Cyber Premium, OPUS Card, Filobev, Eco Blanca, Indobev, Omega Bowl, Art Maestro, NPP Pro, Wrapwell, Decor Papers and more.

  • Hotels: The company launched its first hotel with the acquisition of another in Chennai, calling it ‘ITC - Welcomgroup Hotel Chola’. Now, they have over 113 owned as well as managed properties across the country and some in Sri Lanka. They are a premier chain of luxury hotels that were built on the concept of ‘Responsible Luxury’. They integrate world class green ideas and practices into their new design elements and stick to their promise of unmatched luxury at the same time. Their hotels include the following chains:

  1. ITC Hotels
  2. Mementos by ITC Hotels
  3. Welcomhotel
  4. Storii by ITC Hotels
  5. Fortune Hotels
  6. WelcomHeritage Hotels

Within their hotels, they have their own branded culinary excellent experiences under the brands Bukhara, Dum Phukt, Royal Vega, Avartana, Kebab & Kurries, Dakshin, Ottimo Cucina Italiana, Pan Asian and The India Room.

  • Agri Commodities and Rural Services: ITC is one of the leading corporations within the agricultural sector and one of the biggest agri products exporter in India. They currently focus on the export and domestic trading of these products:
    1. Feed Ingredients - Soymeal
    2. Food Grains - Wheat & Wheat Flour, Pulses, Barley, Maize and Rice
    3. Marine Products - Prawns and Shrimp
    4. Processed Fruits - Fruit Purees, concentrates, organic fruit products and IQF
    5. Coffee

  • IT: A leading global technology services and solutions provider, ITC Infotech is led through Business and Technology Consulting. The company provides solutions that are business friendly to help clients succeed and be ready for the future. They seamlessly bring the digital expertise together with strong alliance that are industry specific. They provide solutions across industries like healthcare, business and financial services, manufacturing, travel and hospitality, consumer goods and more.

  • FMCG: Aashirvaad, Bingo!, Candyman, Sunfeast, YiPPee!, mint-o as well as Kitchens of India are some of their standout Branded Packaged Food products. Their Personal Care Products include Essenza Di Wills, Vivel, Fiama and Superia. They have also launched Classmate and Paperkraft in the education and stationery products space, Mangaldeep in Agarbattis and Aim in matches.

Board of Directors


  1. Chairman & Managing Director : Sanjiv Puri
  2. Executive Director: Nakul Anand
  3. Executive Director: Sumant Bhargavan
  4. Executive Director: Rajiv Tandon
  5. Independent Director: Shilabhadra Banerjee
  6. Independent Director: Hemant Bhargava
  7. Independent Director: Arun Duggal
  8. Independent Director: Shyamal Mukherjee
  9. Independent Director: Anand Nayak
  10. Independent Director: Nirupama Rao
  11. Independent Director: Ajit Kumar Seth
  12. Independent Director: Meera Shankar
  13. Non-Executive Director: Navneet Doda
  14. Non-Executive Director: David Robert Simpson
  15. Non-Executive Director: Sunil Panray
  16. Non-Executive Director: Mukesh Gupta

Key Executives


  1. Chairman & Managing Director : Sanjiv Puri
  2. Executive Director: Nakul Anand
  3. Executive Director: Sumant Bhargavan
  4. Executive Director: Rajiv Tandon
  5. Chief Financial Officer: Supratim Dutta
  6. Food Business: Hemant Malik
  7. Corporate Affairs: Anil Rajput
  8. Agri & IT Businesses: S. Sivakumar
  9. ITD, MAB & Start-Up Cell: Sandeep Kaul
  10. Secretary: R. K. Singhi

Presence


ITC sells through various stores through retailers across the country. It has now expanded in the hotel chain business to Columbo in Sri Lanka to start its journey into tapping into the international market.

Registered Office:


ITC LIMITEDVirginia House,37, J. L. Nehru RoadKolkata - 700071, India

Strengths:


The strengths of the company that have had effect on the ITC share price and give it competitive advantage in the market are:

  1. The management of the company is strong and experienced.
  2. The brand presence is strong and the advertising of the products are big advocators to the upward price movement.
  3. The products portfolio is very strong and diverse and includes hotels, FMCG, IT, Agri-commodities, paper and packaging.
  4. They have over 30,000 employees.
  5. Their research and development facilities are excellent and provide for high quality products.
  6. The products are exported to 90 countries across the globe.
  7. The annual revenue earned by the company is around $10 billion.
  8. Their CSR activities and sustainability initiatives enhance their brand image.

CSR and Sustainability



From the first day, ITC led forward with the policy - Nation first: sab saath badhein. This underlines their core belief that they need to build a competitive as well as profitable Indian enterprise that is structured around contributing to the creation of a larger societal value.

Globally known for their carbon positive, solid waste recycling positive and water positive dimensions for sustainability, they have been green led for over a decade. They have created over 6 million livelihoods that are sustainable. Also, 42% of the entire energy that is consumed by the company is achieved from renewable sources of energy.

The company’s Well-being Out of Waste programme (WOW) comprehensively addresses solid waste management including the biggest component - solid waste, and provides and end to end scalable as well as sustainable solution that has now affected over 1.8 crore citizens in India.

Alongside farmers and local communities, the organisation had implemented interventions that are large scale in climate smart as well as sustainable agriculture. Their initiative called Baarah Mahine Hariyali helps multiply farmer incomes.

ITC is also investing in the country’s future by building a world class consumer goods factory as well as iconic hospitality assets which will contribute to India’s competitive capacity. This initiative is called Make in India.

The company’s social investments initiative caters to three important stakeholder groups. These are:

  1. The rural communities around the company’s operational areas that face enormous difficulties in ensuring sustainability within their farming system.
  2. The communities that reside around the operational areas of the company and require sustainable solutions that can help generate some additional income streams.
  3. The central and state governments.

Some of their initiatives include:

  1. e-Choupal Ecosystem
  2. Afforestation Programme
  3. Primary Education
  4. Sustainable Agriculture
  5. Watershed Development Programme
  6. Waste Management Programme
  7. Women Empowerment
  8. Skilling and Vocational Training
  9. Health and Sanitation
  10. Livestock Development

COVID-19 Impact


During the pandemic, cigarettes and hospitality took a big hit and marked a deceleration in the economic activity of the company as the consumption declined, especially in rural areas. ITC hence, focused on the essential products industry and met consumer needs through several FMCG products that were directly delivered to the homes of the consumer through ‘ITC on wheels’. They launched more than 60 new products during the FY20 as well several more personal care products amidst the pandemic. Even then the growth decelerated through the year. Rural growth stood at only 0.8 times of urban markets in FY20 as compared to the 1.4 times in FY19.

Future Prospects


The future prospects of ITC include:

  1. The company is set to make more strategic acquisitions by purchasing Savlon from J&J as well as B Natural from Balan Natural Foods. They are trying to increase their non-tobacco FMCG sector’s revenue base.
  2. They are planning more exposure for their hotel chains.
  3. They are expanding to rural sectors of society.
  4. The processed food as well as personal hygiene are growing tremendously in India.

Did You Know!


ITC is one of the leading companies when it comes to reducing carbon emissions as they consistently work towards the expansion of their positive carbon footprint. They do this through energy conservation as well as the use of renewable sources of energy. As a matter of fact, 41% of the entire source of the company’s energy requirement is now renewable. It is the only company in the entire world that is going to be 15 years carbon positive, 13 years solid waste recycling positive as well as 18 years water positive.

Another interesting fact about the company is that the company does not have one owner. When you think Tata, you think Ratan Tata, when you think Reliance, you think Ambani, but ITC is a professionally managed company that has 0% promoter holding.

Initial Public Offering


The ITC IPO was listed on the NSE as well as BSE. It was launched in 1970, listing 5,00,000 right shares at a premium of Rs. 3 per share. 32,90,000 equity shares were offered to the public at a premium of Rs. 3 per share.

Equity Shares


Due to the robust growth in the cigarette volumes, the ITC share price has risen to the highest level in 3 years time. The ITC share price has been opening upside everyday and has recently hit its 52 week high on the NSE. The shares are in a bull trend and may go up much more in the short term.

In the long term however, what may fuel the growth of the ITC stock price is that they have delivered solid performance in every quarter due to growth of cigarette volumes. Even post the COVID 19 impact, the volumes have hit a new all time high and are more than before the pandemic hit at about 12%. A turnaround is also expected in their hotel industry as they have now gone abroad and opened their first hotel in Columbo, Sri Lanka. The other ventures and businesses have also been consistently growing. The ITC stock price has been on an uptrend since February and has delivered over 25% returns to all of its shareholders in 2022.
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