Isn’t this weird? Last year they said they won’t be pouring any more money into the hotel capex
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Welcome and Storii expansions are largely through management contracts and not capex
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Also, this is great time to do it, as there is stress in the sector due to covid. And if the management has to demerge this business in future, they need to provide scale to this business so that it can do on its own
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Exactly, and ITC has cash, we might see good returns from these assets in future. Hotels are not closed forever and corona will be over.
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While researching on per brand basis for ITC, it seems that ITC’s Fruit Juice brand Bnatural has not seen the limelight much in the last two years.
- The last news update on its Bnatural website was on 06/11/2018.
- The last news update on web was in late 2020s when ITC tied up with Amway or they put out an advertorial saluting the farmers or a rumor about buying Raw Pressery.
- Also, there is no update on the market share vis a vis Dabur Real, Pepsico Tropicana or Hector Beverages’ Paper Boat in the last three years.
- Sadly, none of the 20-30 brick and mortar shops I have visited also carry Bnatural while they carry dabur Real or tropicana in good quantities.
The same is also true for Fabelle Chocolates. Fabelle’s cheaper products do not have a showcase. There is no tv spend and no awareness for the brand locally.
Where is the customer engagement? ITC is paying millions for brand building, where is the money flowing?
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There are so many brands under ITC which are neglected. For example charmis and dermafique. Both are good. But nobody knows about it.
Delete this post if it’s irrelevant.
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Anyone with access to the article, please share summary
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I am not a subscriber to the website.
But the line “The conglomerate’s financial ratios may be looking their healthiest under Sanjiv Puri, but he just can’t get investors interested in the company’s stock.” is not correct.
FIIs have been selling continuously, DIIs have a stake of 42%, and public including many retail investors hold 45% stake, who else is not investing in the company?
The needle wont move until a change happens, but when will that change happen, no one knows. Until then I think no matter how many interviews are done, how many times ITC is covered, no matter the investors’ angst, nothing will happen.
FMCG products are accepted, margins are increasing, dividend is good, but the same overhangs with solutions in sight but no action for reasons known.
Invested. It is both a learning experience and a value investment for me.
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Mgmt has clearly said they will demerge hotel business but only when hospitality has right valuation, unless normalized travel and tourism start hotels will be stress valued. But at least this time they gave a sensible roadmap.
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Agriculture Ministry signs MoU with Cisco, Jio, ITC, NeML and Ninjacart to build farmers’ database
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Hi,
In the below opportunity ITC can have better margins in food business however how large is the opportunity that needs to be seen.
Thanks,
Deb
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Is this just for ‘Kitchens of India’ or also for Bing, Sunfeast and Yippee?. I don’t see huge volumes coming from this collabration but it will provide excellent visibility.
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I doubt if Inox will handover the Kitchens of India packing 
ITC brand will not be visible to end customers.
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That’s correct. It will be private labeled.
This itself is not a sizable revenue but the way I look at it is setting up base to get into institutional catering business which is high margin business.
By the way hotel TAJ also is in institutional catering. Infact in my own office in Mumbai.
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Market Standing of brands of ITC
- Aashirvaad is No. 1 in Branded atta.
- Bingo! is No. 1 in Bridges segment of Snack Foods (No.2 overall in Snacks & Potato Chips).
- Sunfeast is No. 1 in the Cream Biscuits segment.
- Classmate is No. 1 in Notebooks.
- YiPPee! is No. 2 in Noodles.
- Engage is No. 2 in Deodorants.
- Mangaldeep is No. 2 in Agarbattis (No. 1 in Dhoop segment).
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Despite such a strong portfolio of 25 mother brands, most of the products are unavailable at most of the channels- mom n pop shops, modern retail channels. There was a lot of noise about ITC opening online store, however it is unlikely that retail customer would prefer to order products from these stores rather either physical stores or online groceries. The only channel where I could find decent product availability was online grocery stores. The leadership position sounds good but is limited to a few brands, some of which are low margin (wheat), very niche / small (cream biscuits), distant second (yippee in noodle market). My biggest concern is when you ask about ITC Sales team from channel partners or peer sales team from other companies, feedback has been being lathergic, lack lustre attitude, poor or delayed supply of products. A business be it small or big would not like to keep those products on the shelves whose supply is not certain…that is why I believe (my hypothesis) that despite having good quality (I tested many ITC products myself in last 1 month across FMCG ex-tobacco category), they are not able to find space on retail stores. Stores are filled with competition product up to brim but no sight of ITC products. Secondly, I hardly come across any advertisement campaign or promotion on various channels - retail stores, online retails, you tube, etc. I could not understand how customers will buy / demand these products which are neither available on stores not visible to customers. I believe management should focus on improving their supply chain - they mentioned about SCM initiative as one of the pillar of their strategy /action plan but not sure how much impact it can have. I strongly believe if ITC is able to address SCM issues and products are available, they would definitely see traction in many high margin categories (chocolate, coffee, premium biscuits). Secondly, their marketing / advertisement cost as a % of sales appear to be low compare to the other fmcg companies - though numbers are not clearly available - they have clubbed this cost with promotion which would include channel promotion cost as well.
Anyone from FMCG would can share their view, would be great.
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Hi,
Cannot agree with you more.
The market leadership of ITC is more with less margin products.Even I believe ashirbad Brand could have been utilized more except atta to launch products which have good margin.When I go to supermarket or other stores I find Ashirbad Atta in truck loads but not other Ashirbad Products.Earlier I bought Ashirbad Salt now even They are also not available in stores.
Where as other companies like Tata Consumer beverages which I believe has used its Brand very effectively and launched varied better margin products and they are getting sold like hot cakes.
Every now and then we hear news ITC starting something new and promising.I wonder why they don’t utilize their premier position in already established brands properly which other companies are able to do!
Thanks,
Deb
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Another example is the acquired brand Minto… there is no visibility on what is happening in these brands - Minto vs Polo (Nestle) was a great story
How does one explain this situation? This is when there is so much pressure to deliver on the FMCG Biz
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Hi,
Last 4 days ITC jumps 11%,rumours of Amazon picking up stake in ITC’s Echaupal.
Thanks,
Deb
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