ITC's FMCG division generates revenue of Rs 29,000 crore due to rising consumer spending

15 Jun 2023 , 12:34 PM

According to the company’s most recent investment note, consumers spent more than Rs 29,000 crore on fast-moving consumer goods (FMCG), excluding tobacco, in fiscal 2022–23.

In comparison to the prior year, when it was Rs 24,000 crore, consumer spending on the 25 mother brands of the Kolkata-based corporation increased by almost 20% in the most recent fiscal year.

During the pandemic, the growth rate was substantially slower—9% in FY22 and 11% in FY21.

Consumer spending, coupled with channel margins and taxes, is the net sales turnover of the brands and serves as a gauge for business performance. The company’s FMCG gross sales will be less than what consumers will spend. ITC’s non-cigarette FMCG total sales for the most recent fiscal year were Rs 19,122.5 crore, an increase of 19.5% from fiscal 2022.

ITC stated in the note that despite high commodity and input costs, the FMCG business’ Ebitda (earnings before interest, taxes, depreciation, and amortization) for FY23 increased 34.9% to Rs 1,953.97 crore, and the Ebitda margin increased to 10.2% from 9.1% in FY22.

Premiumization, supply chain agility, prudent pricing decisions, digital initiatives, smart cost management, and financial incentives, including production-linked tax incentives, were some of the multiple interventions that contributed to the margin expansion.

The conglomerate is putting its faith in the FMCG industry to fuel its future growth and to de-risk itself from the cigarette industry, which has been subject to greater regulatory scrutiny for a number of years.

ITC dominates the market for branded atta, cream cookies, bridge snacks, notebooks, and dhoop in the FMCG sector, while it comes in second for instant noodles, agarbatti, and floor cleaners.

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