Cigarettes-to-hotels conglomerate ITC is considering a de-merger of its hotel business, the company’s chairman and managing director Sanjiv Puri said at a press conference on July 21.
“We had shared plans about an alternate structure for the hotel business before the pandemic, however, with COVID-19 we had to hold it back,” Puri said.
“We have reiterated in the annual report and the AGM that we will take ahead the plan in line with industry recovery dynamics. And now that there are indications of industry on a positive trajectory, it is very much on the table,” he added.
ITC runs 113 properties under its hotel business. It launched 9 hotels in FY22 and has a healthy pipeline of new properties which will be opened over the next few quarters, said Puri while speaking at the company’s 111th Annual General (AGM) on July 20.
While the business had taken a hard blow due to the pandemic, with life returning to normal it is on the path to recovery. Puri indicated as much while speaking at the AGM.
“Undoubtedly, the last two years have been the most challenging for the travel and hospitality sector worldwide. Your company’s hotels business responded with commendable agility to tap alternate customer cohorts and garner new revenue streams,” he said.
“The segment revenue for the year doubled whilst segment PBIT turned positive in the second half of FY22. The resurgent trend in domestic tourism, MICE and banqueting highlight the immense opportunities for trusted brands like ITC Hotels in a post-pandemic era,” added Puri.
Besides the hotel business, the chairman also indicated a ‘possible listing’ of the IT business under ITC Infotech and said the company is evaluating the plan.
The company is also giving a major push to its recently launched app for farmers — ITCMAARS.
Bid to tap agri value chain
With the launch of ITCMAARS app, ITC aims to equip farmers with the latest information and technology, which will help them better their yields and ultimately raise their income. The digital platform provides farmers with AI/ML driven value-added personalised and hyperlocal crop advisories. These include a customised ‘crop calendar’ for scientific planning of crop cycles, a ‘crop Doctor’ function for real-time resolution of crop infestation, access to good quality inputs and market linkages, real-time soil testing, precision farming and so on.
The app will also connect the farmer with farmer producer organisations (FPOs), and companies and offer them services such as loans. The company, indicated Puri, will also look at onboarding insurance and other offerings on the app later.
“The newly launched super-app ITCMAARS is designed to provide maximum support to marginal farmers at their doorsteps, to give them the benefits of the best in technology and access to markets. For me, ITC MAARS will be a success when it makes a meaningful contribution to multiplying farmer incomes and making India’s agri value chains competitive,” said Puri.
“There are about 140 million farmers in India and we need to bring them together to make an impact at scale,” he added.
The app will be free for use for the farmers, however, ITC plans to monetise it through service providers such as creditors, insurers etc. The app already had onboarded about 200 FPOs and over 40,000 farmers. ITCMAARS has now been launched in seven states.
“The aim is to have 10 million farmers and 4,000 FPOs,” the chairman shared.
An FPO or Farmer Producer Organisation is a voluntary collective of farmers.
NPD key for FMCG
The company, indicated Puri, will continue its high frequency of new product development (NPD) in the FMCG segment. Last year, ITC introduced 110 products in the FMCG segment under its brands like Aashirvaad, Sunfeast, Bingo and Yippee. ITC in FY22 extended its staples brand Aashirvaad to categories like organic foods, frozen breads and vermicelli, Sunfeast beyond biscuits to cakes and Savlon to surface disinfectant sprays.
“Today the consumer access points and the channels are getting transformed. And every channel has its own unique characteristics and unique consumer preferences emerge in these channels. So, some of the new products are meant to cater to the emerging channels. And hence launched will remain elevated over a period of time,” said Puri.
ITC is also now looking at aggressively expanding its FMCG portfolio to overseas markets.
“As we achieve scale for your company’s FMCG portfolio, it is also our aspiration to take these world-class brands to overseas markets. ITC has established distribution arrangements abroad enabling appreciable progress of exports of ITC’s brands to over 60 countries,” Puri said at the company’s AGM.
“Over time, such exports will make a substantial contribution to the growth of your company’s value-added FMCG portfolio.”