Indian Tobacco Company (ITC).

Presented by Subrata Mahapatra Supratik Mukherjee Surya Sarthi Ghosh Suvadip Saha Tithi Ray
ITC. Touching your life. Everyday

‡ ‡ ITC market capitalisation- $ 30 billion with a turnover more than $ 6 billion. Has been highly acclaimed for its mode of business and growth by various magazines like ± FORBES, business today, business world ,business week and the economic times ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery, Information Technology, Personal Care and Stationery and FMCG. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade) through its agri-business and e-choupal. ITC employs over 26,000 people at more than 60 locations across India and consistently rewarding more than 4,15,000 shareholders .

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‡ ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. The name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. The Company now stands rechristened 'ITC Limited'. It initially started with Cigarettes and Leaf Tobacco businesses. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India.

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It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. In 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities and they have reached out to 4 million farmers in 10 states. A line of premium range of notebooks under brand ³Paperkraft´was launched in 2002. Classmate´ over the years has grown to become India¶s largest notebook brand.

Permanent Ink Markers and White Board Markers in 2009. the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands. Wills Classic formal wear (2002).‡ ‡ ‡ ‡ ‡ In 2008. . ITC also entered the Lifestyle Retailing business with the Wills Sport. Wills Lifestyle became title partner of the country's most premier fashion event . In 2006. Wills Clublife evening wear (2003). introduction of Sunfeast as the Company entered the biscuits segment and snacks category with Bingo! In eight years. In 2002. ITC entered the confectionery and staples segments with the launch of the brands minto and Candyman confectionery and Aashirvaadatta (wheat flour). John Players. ITC Infotech India Limited. In 2000. ITC spun off its information technology business into a wholly owned subsidiary.Wills Lifestyle India Fashion Week. It began in August 2001 with the introduction of'Kitchens of India' readyto-eat Indian gourmet dishes. ITC repositioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the ³Paperkraft´ Brand and entered new categories in the office consumable segment with the launch of Textliners.

Madhur.‡ ‡ ‡ ITC now markets popular safety matchesbrands like iKno. 'Fiama Di Willsµ and Vivel are its vivid products.(2002) ITC's popular agarbattis brands include Spriha and Mangaldeepacross a range of fragrances like Rose. Sandalwood. Mangaldeep. Aim Mega and Aim Metro. Sambrani and Nagchampa. an exclusive range of fine fragrances and bath & body care products for men (Inizio Homme) and women(Inizio Femme) in July 2005. Jasmine. Bouquet. Aim.(2003) ITC introduced Essenza Di Wills. .

creating growing value for the Indian economy and the Company¶s stakeholders ‡ Mission:-To enhance the wealth generating capability of the enterprise in a globalizing environment. delivering superior and sustainable stakeholder value .Vision and Mission ‡ Vision:-Sustain ITC's position as one of India's most valuable corporations through world class performance.

000 crores over the next 7 to 10 years to drive growth in this sector. 8.55.000 crores in the next 7 to 10 years to fuel its growth Agri-business will be progressively leveraged to widen Company¶s FMCG distribution network. Paperboards & Packaging industry by increasing the per capita consumption. 6.000 crores in Paper. Vision. an investment opportunity of up to Rs. 9.000 crores by 2018 thus creating investment opportunity for ITC of up to Rs. R & D : Investing in the game changers of tomorrow . ITC¶s Hotels carries an investment opportunity up to Rs. vitality and values continuously invest in existing and new capabilities adoption of environment friendly technologies  is expected to triple in size in FMCG sector to over Rs 3.Chairman¶s speech Issue of bonus shares in the ratio 1:1.

ITC¶s corporate strategies are ‡ Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. ‡ ‡ ‡ ‡ ‡ ‡ . Ensure that each of its businesses is world class and internationally competitive. Agri Business and Information Technology. Hotels. Continuously strengthen and refine Corporate Governance processes and systems to catalyze the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability. Continue to focus on the chosen portfolio of FMCG. Paperboards & Packaging. Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITC¶s various businesses. Profitability and Internal Vitality. Benchmark the health of each business comprehensively across the criteria of Market Standing. Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses. Paper.

Strategy of Organization to manage diversity of Portfolio Formal 3-tiered governance structure: Board of Directors : Comprising executive (4) and non-executive directors (11) Strategic supervision Corporate Management Committee : Comprising executive directors and senior managers Strategic management Divisional Chief Executive & Divisional Management Committee : Executive management ITC. Touching your life. Everyday .

P. Anthony . B Vijayraghwan.K Mehrotra.B. Powell. D.Mathur. T.Kaul.G. Basudev Sen Key persons ‡ Kurush N Grant. Everyday of tobacco divison . S. Hemant Malik. Touching your life.V Ramaswamy.s. H. R Tandon ITC. R.vaidyanath Non Executive Director Anil Baijal.H Khan.K.B Ramanujam.C Deweshwar Executive Director Anup Singh K.Board of directors Chairman Y.


000 mothers-at-risk and children below 5 Women join their ITC supported self-help cow artificially inseminated at ITC s cattle development centre ITC assists rural families to construct low cost sanitary units for their homes develop water and forest resources to enhance soil fertility. apply superior farming methods to improve quality and quantity of farm yields. Everyday . ITC.CORPORATE SOCIAL RESPONSIBILITY Healthcare services have been provided to over 45. adopt soil and water management practices.700 families to construct their own sanitary units. pool knowledge and resources. ITC has assisted nearly 2. improve productivity and quality Over 8 years. the teachers at village ITC Supplementary Learning Centre persuaded parents to send children to evening coaching classes at the Centre ITC offers facilitation to farmers to form agribusiness societies. Touching your life.

Touching your life.Business Branded Apparel Hotel tationery Cigarett es Pac age d oods Incense tic s Paperbo ards Personal Care Informa tion Technolo Agricult gy ITC. Everyday ural Industry afety Matches .

Personal Care products. Everyday . ITC has rapidly scaled up presence in its newer FMCG businesses comprising Branded Packaged Foods. world-class R&D and an efficient and responsive supply chain will further strengthen its leadership position in the Indian FMCG industry ‡ ‡ ITC. Safety Matches and Incense Sticks (Agarbatti) with Segment Revenues growing at an impressive compound annual growth rate of 38% during the last 5 years. Lifestyle Retailing. innovation and differentiation backed by deep consumer insights. Touching your life. The Company¶s unwavering focus on quality.FMCG ‡ It is ITC's strategic intent to secure long-term growth by synergizing and blending the diverse pool of competencies residing in its various businesses to exploit emerging opportunities in the FMCG sector Over the last few years. Education and Stationery products.

ITC¶s FMCG Portfolio ‡ ‡ ‡ ‡ ‡ ‡ ‡ Cigarettes & Cigars Foods Lifestyle Retailing Personal Care Education & Stationery Safety Matches Agarbattis ITC. Everyday . Touching your life.


ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru. India Kings.1300 bn domestic market. Out of the top 10 brands in India. it has a leadership position in every segment of the market. ITC has become a key player in the GCC markets through growing volumes of its brands. Gold Flake. Capstan. Munger. manufacturing technology. Saharanpur and Kolkata. These factories are known for their high levels of quality. Berkeley. contemporary technology and work environment. marketing and distribution ITC's pursuit of international competitiveness is reflected in its initiatives in the overseas markets. Bristol and Flake. It's highly popular portfolio of brands includes Insignia. In West Asia. In the extremely competitive US market. Everyday ‡ ‡ ‡ . ITC. 6 belong to ITC. Touching your life. Navy Cut. Silk Cut. innovation.Cigarettes & Cigars ‡ ITC is the market leader in cigarettes in India. quality. Scissors. Classic. value-priced cigarettes and Roll-your-own solutions. With its wide range of invaluable brands. It commands 70% of India¶s Rs. ITC offers high-quality. The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design.

Everyday ‡ ‡ ‡ ‡ . Touching your life.13% of market share Vazir Sultan Tobacco (VST). 13% of the total market share Golden Tobacco Company (GTC) with 8% of the market share.COMPETITOR ANALYSIS ‡ ‡ ‡ The cigarette market in India has 3 other major players Godfrey Phillips India (GPI). Domestic competitors Kanhayya tobacco MR tobacco Sapna enterprises Sudarshan tobacco ITC still attains a gigantic market share of 66% ITC. a Philip Morris affiliate. a BAT affiliate.

Sunfeast. Aashirvaad. candyman and Bingo! ITC.Foods ‡ The Foods business is today represented in 4 categories in the market. Everyday ‡ ‡ ‡ ‡ . Confectionery.Ready To Eat Foods. mint-o. Staples. ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand In order to assure consumers of the highest standards of food safety and hygiene. Snack Foods. ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands. Touching your life.Kitchen¶s of India.

Lifestyle Retailing ‡ ITC's Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. With a distinctive presence across segments at the premium end. Everyday . ITC is committed to build a dominant presence in the apparel market through a robust portfolio of offerings. ITC has also established John Players as a brand that offers a complete fashion wardrobe to the male youth of today. With its brands. ‡ ‡ ITC. Touching your life.

Extensive insights gained by ITC through its numerous consumer engagements have provided the platform for its R&D and Product Development teams to develop superior. The product formulations use internationally recognised safe ingredients. differentiated products that meet the consumer's stated and innate needs. ITC forayed into the Personal Care business in July 2005.Personal Care ‡ In line with ITC's aspiration to be India's premier FMCG company. subjected to the highest standards of safety and performance. 'Vivel Di Wills' 'Vivel UltraPro'. Touching your life. ITC. 'Fiama Di Wills'. ITC's Personal Care portfolio under the 'Essenza Di Wills'. 'Vivel' and 'Superia' brands has received encouraging consumer response and is being progressively extended nationally. recognised for its world-class quality and enduring consumer trust. Everyday ‡ ‡ .

Tata Tetley. ‡ Its client list includes several well-known national and international companies like Nokia. UB Group. Tata Tea. Philip Morris International. Agio Cigars.etc ‡ ‡ ‡ ‡ ‡ Product Lines ITC's Packaging Business has 3 major product lines Carton Board Packaging Flexible Packaging Tobacco Packaging ITC Packaging has also pioneered offering of Green Packaging which includes usage of raw material from sustainable sources and converting it in a facility which is 100% powered by renewable WIND ENERGY. . Reckitt Benckiser. Colgate Palmolive.Packaging ‡ ITC's Packaging & Printing Business is the largest value added converter of paperboard packaging in South Asia. Diageo. British American Tobacco. Radico Khaitan. Pernod Ricard.


. The papers used in Classmate and Paperkraft notebooks are superior in quality and environment-friendly.CLASSMATE-an ITC product ‡ ‡ ‡ ‡ ITC launched its Classmate brand in 2003 with the notebooks category By 2007. erasers and sharpners. pens. Classmate papers are safe and certified non-toxic. Classmate became the largest Notebook brand in the country. math instruments. mechanical pencils. Classmate added new products to its portfolio which now consists of notebooks. pencils. .


Paper Stationery. Markers and Highlighters.PAPERKRAFT ‡ ‡ ‡ Paperkraft is the lead provider of all premium executive stationery needs. Paperkraft Premium Business Paper ‡ Paperkraft Paper Stationery ‡ ‡ Paperkraft Markers . The current Paperkraft portfolio includes Premium Business Paper. The Paperkraft range of products aims at satisfying the stationery and office consumables needs of office executives and working professionals.

 Focus on value added agri commodities  Unique CRM program in commodity exports  Leveraging IT for the transformational µe-Choupal¶ initiative Rural India¶s largest Internet-based intervention Over 40. Wheat. Marine products.000 villages linked through 6500 e-Choupals servicing over 4 million farmers  Distinctive sourcing capability for ITC¶s Foods business.ITC's Agri-Business  One of India's largest exporters of agricultural products  Farm linkages in 14 states covering Soya. Coffee etc. .

has already become the largest initiative among all Internet-based interventions in rural India The Value Chain-Farm To Factory Gate . Launched in June 2000.e-Choupal ‡ ‡ ‡ ITC's Agri Business Division has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. 'e-Choupal'.

pulses. coffee. village internet kiosks managed by farmers . rice. facilitate the sale of farm inputs and purchase farm produce from the farmers' doorsteps.called sanchalaks .themselves. ‡ With a judicious blend of click & mortar capabilities.e-Choupal(contd) The Model in Action ‡ 'e-Choupal' leverages Information Technology to virtually cluster all the value chain participants. delivering the same benefits as vertical integration does in mature agricultural economies like the USA. wheat. enable the agricultural community access ready information in their local language on the weather & market prices. disseminate knowledge on scientific farm practices & risk management. ‡ 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops . . shrimp. ‡ Real-time information and customized knowledge provided by 'e-Choupal' enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & productivity.soyabean.

Touching your life. Everyday .Comparison with Haryali Kisan Bazar Hariyali kisaan bazaar Loan for pass through to farmers Other companies Extension service ICICI Bank Farmers Repayment of loan with interest Produce procurement DSCL ITC.

Touching your life.ITC. Everyday .

DumPukht and Kebabs & Kurries are well known cuisine brands today. Dakshin. India's premier chain of luxury hotels was launched on October 18. which has 54 hotels with 4446 rooms in 41 cities across India Welcome group of Heritage Hotels ‡Its restaurants Bukhara. with the opening of its first hotel .Chola Sheraton in Chennai ‡Over 100 hotels in more than 80 destinations ‡Second largest hotel chain in India ‡The group today operates under several distinct brands: ITC . .Luxury Collection Hotels WelcomHotel Sheraton Hotels Fortune Hotels.ITC Hotels ‡ITC Welcomgroup. Peshawari. 1975.

Touching your life.ITC. Everyday .

the ITC Hotel Royal Gardenia was conferred the highest rating for green buildings in the world ±the LEED India Platinum Rating. water positive and solid waste recycling positive. ‡This recognition makes it the world¶s largest platinum rated hotel and is yet another manifestation of ITC¶s leadership in Sustainability Practices ‡It is the only company in the world to be carbon positive.Achievements ‡ITC¶s new luxury hotel in Bengaluru. .

requiring an additional 50.Reports on ITC Hotels for the year 2010 ‡ The aftermath of the terrorist attack in Mumbai in November 2008.000 rooms over the next 2 to 3 years ‡ ‡ ‡ . the swine-flu pandemic and the general squeeze on corporate travel combined to adversely affect the performance of the Indian hotel industry during the year 2010 The impact was particularly severe during the first half with occupancies and average room rates witnessing steep declines Given the adverse business environment. Company¶s hotels business posted a 9% decline in Net Revenues during the year though the business maintained its leadership position in terms of operating efficiency The chairman is still hopeful about investing in this sector because The World Travel and Tourism Council (WTTC) estimates that the Indian travel and tourism industry will grow at 12% annually until 2019.

Future Plan of Action ‡ The company is planning to invest $2 billion in hospitality business in next few years which is one of the thrust areas for investment of ITC along with FMCG and paper.000 square feet of luxury retail space). The company would introduce the new business model in ITC Grand Chola in Chennai(40. is foraying into retail mall and service apartments. ‡ ‡ ‡ . the business has and will be investing in wind energy to provide clean power to its Mumbai property. Additionally. Most of the new mega hotel projects of the company will have luxury retail space and service apartments. Construction activity of the new super luxury properties at Chennai and Kolkata are progressing satisfactorily In pursuit of Company¶s µTriple Bottom Line' objectives. the ITC Maratha. Bengaluru. It may be noted that the hotel division of ITC has a turnover of over Rs 1. New Delhi and the ITC Royal Gardenia. ITC Hotels . solar energy is being used to produce steam at the ITC Maurya. It will be part of ITC's strategy to de-risk the hotel business as hospitality is highly seasonal business.000 crore.

Manufacturing. Banking Financial Services & Insurance (BFSI). ‡The company services industries including. Touching your life. and a service delivery footprint spanning over 140 countries. Life Sciences and Transportation & Logistics. SA8000 is widely accepted as the most viable and comprehensive international workplace management system.ITC info-tech ‡Formed in 2000. Engineering Services. Media & Entertainment. Consumer Packaged Goods (CPG). Retail. Hospitality. Everyday . ITC. Travel. ‡This section also aims at the motive of people first and has got many awards and recognition under its belt. ITC Infotech has today carved a niche for itself in the arena of global IT services and solutions. ‡ITC Infotech's leadership capabilities also accrue from business critical engagements with leading organisations across five continents. ‡The company became the first Indian IT company to receive the prestigious Social Accountability (SA) 8000:2008 certification.



BCG Matrix ‡Agri Business ‡Hotels ‡Paperboards & Packaging ‡FMCG-Foods ‡ITC Infotech G R O W T H ‡Branded ‡FMCGCigarettes apparel ‡Packaged foods MARKET SHARE .ITC Ltd .

it & hotels segments 7. 3. Managing diverse business. 2. 5. Agri-export segment showing excellent growth of 28 % . Wealth of local knowledge & international expertise helps it to be globally competitive. ITC has 105 subsidiaries connected with its various operations.STRENGTHS 1. High quality standard products & services Excellent export earnings ITC used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products 6. 4. Excellent brand making capability helping it to diversify it into retailing .

Steep increase in cigarette taxes has adversely affected the revenue earned as the revenue is mainly earned from cigarettes Due to high price of cigarette. 3. consumers are switching to other cheaper forms of tobacco Its hotel industry has still not created a big share in the market size 4. .WEAKNESS 1. 5. 2. Diversification into various lines which are unrelated High competition from established brands which has resulted in reduction in profit margins.

Core brands such as Aashirvaad. Bingo! And Sun Feast (and others) can be developed using strategies of market development.OPPORTUNITIES 1. retail garment. it. 4. Big untapped market available for cigarettes . 3. Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITC's soaps. hotels . shampoos and fragrances under their Wills brand Proper publicity of the hotels would increase its brand image & revenue. packaging & agricultural products 2. Mint-o. product development and marketing penetration. .

could affect its cigarette segment 2. 5. Excise duty on unfiltered cigarettes less than 60mm in length was increased 387% last year. Agribusiness 4. 3.THREATS 1. Hike was 142% for those between 61mm and 70mm long. Competition from unbranded products Due to terrorist attacks the tourism industry has taken a back seat which would affect the hotel segment . FMCG. Negative publicity Ban on smoking. High competition from established brands on all fields be it hotels.

FROM ANNUAL REPORT 2010 ITC. Touching your life. Everyday .

Paper & Packaging Agri Business FMCG .Others 15% 4% ITC.Cigarettes Hotels 45% 20% Paperboards. Touching your life.Segment wise Revenue during FY 2008-2011 16% FMCG . Everyday .

Net Less : Intersegment revenue .82 654.Net - Total FMCG Gross c) d) 916.60 18153.81 850.84 646.74 3288.11 6100.Gross .68 3633.50 7965.Net 3874.12.44 4599.Others .15 3641.31 811.Net Paperboards.75 890.14 3862.Net .2010 Segment Revenue a) (Rs.26 5253.60 1104.57 3233.26 2772.27 5453.56 26259.Gross .14 Quarter ended 31.03 9321.33 8627.16 12955.19 .01 5314.Net Gross sales / Income from operations Net sales / Income from operations .Gross .67 2622.Gross .94 667.25 281.90 20924.51 247.16 905.12.43 845.Net Total .Segment wise Gross and Net Sales from operations Quarter ended 31.80 7329.45 b) Net Hotels Agri Business .69 661.73 303.03.95 891. in Crores) 17283.71 3862.63 1066.Gross .05 910.96 264.71 FMCG .61 3107.01 2671. in Crores) 5236.Gross .79 28931.19 1102.53 2398. in Crores) 4422. Paper & Packaging Gross .09 (Rs.28 Twelve Months ended 31.27 20775.Cigarettes .49 6661.2010 (Rs.65 905.67 877.74 1066.13 6340.

80) Profit Before Tax Tax Expense Profit After Tax 2031.51) 4588.31 4061.Others Total FMCG b) c) Hotels Agri Business Paperboards.42 201.Segment wise Profit Segment Results a) FMCG . in Crores) 4938.03) 1223.87 53.Cigarettes . Paper & Packaging (Rs.35 88.60) 1459.87 (106.81 76.61 216.96 (173.29 104. Everyday .02 556.08 (Rs.31 1954.12 (349.08 1701.84 (86.36 (142. in Crores) 1532.17 6015.36 d) 191.30) 5925.19 1389. in Crores) 1309. Touching your life.59 10.95 (73.45 22.85 1144.41 684.26 Total Less : i) ii) Interest (Net) Other un-allocable income net of unallocable expenditure 1880.78) 1605.08 (Rs.60 141.64 436.27 642.00 ITC.

) Capital Employed * Market Capitalisation as on 31/3/10 36.Financial analysis Key Economic Indicators Gross Turnover Market Capitalisation Profit Before Tax Profit After Tax EPS ± Rs Net Worth 2009-10 Rs.73 14064 Book Value per Share (Rs. Crores 26260 100475* 6015 4061 10. Touching your life. Everyday .8 14957 ITC.

Everyday .Ratio analysis ITC. Touching your life.

ITC knows their strength and weakness in the personal care market.CONCLUSION ITC promoting their brands through advertisement campaign as well as door to door promotion. because people don t know about their brands very well. The demand for some of their product is low. so they are applying new concept to overcome their weaknesses. Everyday . Touching your life. ITC. ITC now offering more margins. ITC is also focusing on Retailers and Wholesalers to promote their brand. exiting offers and long credit period to retailers and wholesalers.

ITC. Everyday . Touching your life.

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