ITC Project MBA Mohit

Project Report
On
Comprehensive analysis of ITC Ltd.

-Company Analysis,
-Corporate Governance Analysis,
-Management Analysis,
-Financial Analysis
Submitted for partial fulfillment of requirement for the award of

degree
Of
Master of Business Administration (Financial Management)

Of
Narsee Monjee Institute of Management Studies
Session 2022-2024
Submitted by:
Mohit Kumar Shrama
SAP ID- 77122277605
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Acknowledgment
I would like to express my deepest gratitude to, NMIMS University Faculty and Mr. Parth Verma of
the Valuation School, for his invaluable guidance, support, and encouragement throughout my
MBA project. His insights and expertise have been instrumental in shaping this project, and I am
sincerely thankful for the time and effort he dedicated to assisting me.
Additionally, I would like to thank all the faculty members and staff at NMIMS University who have
provided me with the knowledge and resources necessary to complete this project. Their
unwavering support and dedication to education have greatly contributed to my academic and
professional growth.
Finally, I extend my appreciation to my family and friends for their constant support and
understanding during the course of my studies.
Thank you.
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Abstract
This MBA project presents a comprehensive analysis of ITC Limited, one of India's leading conglomerates with
a diverse business portfolio encompassing FMCG, hotels, paperboards and packaging, agri-business, and
information technology. The objective of this study is to evaluate ITC's business strategies, financial
performance, and market position to provide insights into its operational efficiency and competitive
advantages.
The analysis begins with an overview of ITC's history, mission, and core values, highlighting its evolution from
a tobacco-centric company to a diversified entity with significant contributions to various sectors. The project
delves into ITC's strategic initiatives aimed at sustainability and innovation, focusing on its efforts to enhance
shareholder value and societal impact.
A detailed financial analysis is conducted to assess ITC's performance over recent years, examining key
financial ratios, revenue streams, and profitability metrics. The study also includes a SWOT analysis to identify
ITC's strengths, weaknesses, opportunities, and threats, providing a holistic view of its competitive landscape.
Moreover, the project evaluates ITC's marketing and operational strategies, including its approach to brand
management, supply chain efficiency, and customer engagement. The impact of regulatory policies and
economic factors on ITC's business operations is also discussed, offering a contextual understanding of the
challenges and opportunities faced by the company.
The findings of this project underscore ITC's robust business model and strategic agility, which have enabled it
to navigate market dynamics and sustain growth. The analysis concludes with recommendations for ITC to
leverage emerging trends and technologies to further strengthen its market presence and drive long-term
value creation.
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TABLE OF CONTENTS
 Declaration 1
 Acknowledgements 2
 ABSTRACT 3
 Table of Content 4
 ITC COMPANY ANALYSIS 7
o About the Company 8
o History of the Company 13
o Business Segment 16
 ITC FMCG Business 16
 Key Highlights: ITC FMCG Business 17
o ITC AGRI Business 24
 Products and Services: 26
o ITC Paperboards & Packaging Businesses 27
 Highlights and Products of ITC's Paperboards 28
o ITC Hotels 31
 ITC Hotels Business Highlights 32
 Business Overview 33
o ITC Infotech 37
 ITC CORPORATE GOVERNANCE 38
o Corporate Governance Philosophy of ITC Limited 39
o Board Of Directors Profile 40
o Report on Corporate Governance 47
o GOVERNANCE PHILOSOPHY 47
o Comment on BOARD OF DIRECTORS 51
o Remuneration Policy 52
o Contribution of ITC Limited's Board Members to Fiduciary Duties 53
o Insights on Board Members as ‘Trustees of Social Wealth’ 55
o Key Aspects of ITC's Corporate Governance: 56 4
TABLE OF CONTENTS
 ITC Management Analysis 57
o Management Analysis 58
o Commentary On Management 66
o Leadership and Vision: 67
o Conclusion: 68
 ITC Financial Analysis 69
o Historical Financial Statement 70
o Balance Sheet 71
o Cash Flow Statement 72
o Ratio Analysis 73
 Profitability Ratio 73
 Efficiency Ratio 74
 Leverage Ratio 74
 Capital Allocation Ratio 75
 Cash Ratio 75
 Valuation Ratio 75
o Key Financial Matrix and Ratio 76
o Common Size P&L ITC LTD 77
o Common Size Balance Sheet ITC LTD 78
o Weighted Average Cost of Capital (WACC) 79
o ROIIC Profiling - ITC LTD 80
o Valuation - Discounted Cash Flow 81
 ITC Industry Overview 83
o FMCG Cigarettes Industry Overview 84
o FMCG-Others 85
o FMCG- Others- Personal Care Products 87
o HOTELS 89
o PAPERBOARDS, PAPER AND PACKAGING 90 5
TABLE OF CONTENTS
 Overview on Financials 91
o Commentary On Revenue 92
o EBITDA 93
o Inventory 94
o Trade Receivables 95
o Trade Payables 96
 ITC DuPont Analysis 97
o Dupont Analysis 98
o Du-Pont Summary 101
 ITC Peer Comparison 102
o Peer Comparison 103
o Financials 105
 ITC Business Segment Financial Overview 107
o Business-wise commentary 108
 Cigarettes: 108
 FMCG 111
 Hotels: 114
 Agri Business 116
 Margin 118
 Suggestions/Recommendation 119
 Enhance FMCG Segment Expansion: 120
 Accelerate Digital Transformation 121
 Strengthen Sustainability Initiatives 122
 Optimize Agri-Business Synergies: 123
 Diversify Revenue Streams: 124
 Information Technology Services: 126
 Expand International Market Presence: 127
 Invest in Research and Development: 128
 Enhance Financial Management: 129 6
 Biblography 130
ITC
COMPANY ANALYSIS
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Project Research Report
ITC Ltd
Long Term Growth in Process.
About The Company
ITC Ltd is one of India's leading private sector companies. ITC has a diversified presence in
Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri- Business, Packaged
Foods & Confectionery, Information Technology, Branded Apparel, Personal Care,
Stationery, Safety Matches and other FMCG products. While ITC is a market leader in its
traditional business of Cigarettes, it is rapidly gaining market share even in its growing
businesses of Packaged Foods & FMCG, Branded Apparel, Personal Care and Stationery.
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ITC Ltd About The Company
About The Company
ITC Limited, formerly the Imperial Tobacco Company of India Limited, is a conglomerate
company headquartered in Kolkata, India. Founded in 1910, ITC has a rich and storied history
that spans over a century. ITC began its operations in India as a cigarette manufacturer but
over the years, the company has diversified its business interests and expanded into various
sectors.
ITC continues to focus on sustainability and responsible business practices by setting

ambitious goals for carbon emissions reduction, water conservation, and renewable energy
usage. The company's commitment to sustainable growth and its initiatives for environmental
and social welfare confirms its position as a responsible corporate.
ITC’s diversified portfolio of future-ready businesses, spanning FMCG, Paperboards &

Packaging, Agri Business, Hotels and Information Technology, enables it to contribute
meaningfully to all 3 sectors of the Indian economy. To infuse new energy into the growth
drivers of the future, significant investments are being made across building assets,
accelerating digital transformation, powering R&D infrastructure and in raising the bar in
sustainability to build an enterprise of tomorrow.
ITC’s business and value chains create sustainable livelihoods for more than 6 million people,
a majority of whom represent the poorest in rural India. ITC is the country’s leading FMCG
marketer, the clear market leader in the Indian paperboard and packaging industry, a globally
acknowledged pioneer in farmer empowerment through its wide-reaching Agri business, a
prominent noted chain in India that is trail blazed in “responsible luxury”.
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ITC Ltd
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ITC Ltd
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ITC Ltd
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ITC Ltd
ITC Limited, originally known as the Imperial Tobacco Company of India Limited, is an
Indian conglomerate with a diverse portfolio of businesses. Here is a brief history of
the company:
Founding and Early Years
•1910: ITC was established as the Imperial Tobacco Company of India Limited,
primarily focused on the tobacco business. It was a subsidiary of the British
American Tobacco Company.
•1913: ITC's first factory was set up in Bangalore for the manufacture of
cigarettes.
Diversification and Rebranding
• 1970s: The company began diversifying its business beyond tobacco. This
period saw the initiation of its expansion into various sectors.
• 1974: ITC entered the hospitality sector with the launch of ITC Hotels.
• 1975: ITC ventured into the paperboards and specialty papers business by
setting up the Bhadrachalam Paperboards Limited.
• 1985: The company was renamed ITC Limited, reflecting its diversification
and the reduced emphasis on tobacco.
Expansion into New Sectors
• 1990s: ITC expanded into new areas such as information technology with the
establishment of ITC Infotech.
• 2000s: ITC entered the branded packaged foods business with products such as
biscuits, ready-to-eat meals, and confectionery. It also launched personal care
products and expanded its agri-business.
• 2002: The company launched its lifestyle retailing business with the Wills
Lifestyle brand.
• 2003: ITC further diversified into the education and stationery products market 13
with the launch of the Classmate brand.
ITC Ltd
Sustainability and Innovation

• 2010s: ITC focused on sustainability, aiming to become a carbon-positive, water-
positive, and solid waste recycling-positive company. It also emphasized innovations in
its products and services across all sectors.
• 2016: ITC launched its premium chocolate brand, Fabelle, and expanded its presence in
the FMCG sector.
Recent Developments
• 2020s: ITC continues to expand its FMCG portfolio, leveraging its extensive distribution
network. The company is also investing in digital transformation and sustainability
initiatives to enhance its market position.
Key Business Segments
• FMCG (Fast-Moving Consumer Goods): Includes food, personal care, education, and stationery
products.
• Hotels: ITC Hotels, known for their luxury and sustainability practices.
• Paperboards, Paper, and Packaging: A major player in the Indian market.
• Agri-Business: Engages in crop procurement and distribution, contributing to rural
development.
• Information Technology: ITC Infotech provides IT services and solutions globally.
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ITC Ltd
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ITC Ltd
ITC FMCG Business

In its 2023 Annual Report, ITC Limited highlighted significant achievements and strategic
directions in its FMCG business, reflecting robust growth and diversification across various
segments. In the fiscal year 2022-2023, ITC Limited's Fast-Moving Consumer Goods (FMCG)
business showed robust performance and significant growth. Here are some key highlights
and products from their FMCG segment:
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ITC Ltd
Key Highlights: ITC FMCG Business
1. Revenue Growth: ITC's FMCG segment achieved strong revenue growth, supported by a
diversified portfolio and deep market penetration. The company focuses on both urban and
rural markets, with an emphasis on expanding its rural footprint (ITC Limited) (Seeking Indian
Alpha).
2. Product Portfolio: ITC's FMCG portfolio includes a wide range of products across several
categories:
• Foods: Brands like Aashirvaad (staples and spices), Sunfeast (biscuits and noodles), Bingo!
(snacks), Yippee! (instant noodles), and B Natural (juices).
• Personal Care: Brands include Fiama (personal wash), Vivel (personal wash), Savlon (health
and hygiene), and Engage (deodorants).
• Education and Stationery: Classmate and Paperkraft.
• Matches and Agarbattis: AIM, Mangaldeep.
• Home Care: Brands such as Nimyle (floor cleaner) and Nimeasy (dishwash) (ITC Limited)
(ITC Limited)
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ITC Ltd
ITC FMCG Business

1. Innovation and New Launches: ITC continues to introduce new products and variants to
meet). evolving consumer needs. Significant launches in 2023 included new flavors and
formats in the snack and noodle segments, premium personal care products, and innovative
home care solutions (ITC Limited) (Seeking Indian Alpha
2. Sustainability Initiatives: The company emphasized its commitment to sustainability, with

initiatives like renewable energy usage, water conservation, and sustainable sourcing. ITC's
extensive afforestation program has greened over 10.4 lakh acres, reinforcing its sustainability
credentials (ITC Limited) (ITC Limited).
3. Digital Transformation: ITC has been actively leveraging digital technologies to enhance
consumer engagement and operational efficiencies. This includes e-commerce platforms,
digital marketing command centers, and apps for farmers and retailers, which facilitate better
connectivity and service delivery (Seeking Indian Alpha).
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ITC Ltd
ITC FMCG Business

Strategic Focus Areas:
• Rural Expansion: Increasing penetration in rural areas through tailored product offerings and
enhanced distribution networks.
• Premiumization: Focusing on premium segments in personal care and foods to cater to discerning
consumers seeking higher quality and value-added products.
• Export Markets: Expanding its presence in international markets, particularly in the Middle East,
Africa, and Southeast Asia (ITC Limited) (Seeking Indian Alpha).
Through these strategic initiatives, ITC aims to solidify its position as a leading player in the FMCG
sector, driving growth through innovation, sustainability, and a consumer-centric approach.
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ITC Ltd
Key Products
ITC's FMCG portfolio is diverse, encompassing various categories:
ITC FMCG Business
Sunfeast (biscuits, noodles)
Branded Packaged Foods:
Aashirvaad (flour, spices, dairy products)
Bingo! (snacks)
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ITC Ltd
Personal Care Products:

Fiama (soaps, shampoos) Vivel (soaps, body washes) ITC FMCG Business
Superia (soaps)
Savlon (antiseptics, hand sanitizers)
Charmis (skincare)
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ITC Ltd
Education and Stationery:

Classmate (notebooks, writing instruments)ITC FMCG Business
Paperkraft (premium stationery)
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ITC Ltd
Matches and Agarbattis (Incense Sticks):

AIM (safety matches) ITC FMCG Business
Mangaldeep (incense sticks)
Dazzle (household matches)
Homelites (household matches)
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ITC Ltd
ITC AGRI Business

ITC Agri Business Highlights and Products
Key Highlights:
1. Revenue Growth:
• ITC’s agri business reported robust performance, driven by increased exports and growth in
value-added segments. The division's revenue for FY23 stood at ₹14,970 crores, reflecting
strong demand for agricultural products and commodities (ITC Limited)
2. Strategic Initiatives:
• ITC continues to align its agri portfolio with its Foods business, enhancing value creation from
its procurement infrastructure. This includes sourcing critical raw materials like chipstock
potatoes for its Bingo! brand (ITC Limited).
3. Digital and Rural Engagement:
• The e-Choupal initiative remains a cornerstone of
ITC's strategy to empower farmers. This digital platform
enhances supply chain efficiency and farmer incomes
by providing access to real-time information and
direct market linkages (ITC Limited).
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ITC Ltd
ITC AGRI Business
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ITC Ltd
ITC AGRI Business
Products and Services:
Feed Ingredients:
Soyameal: Used primarily in animal feed, ITC sources and exports
high-quality Soyameal, catering to both
domestic and international markets.
Food Grains:
Wheat & Wheat Flour, Rice, Pulses, Barley, and Maize: ITC
trades and exports these staples, ensuring quality and reliability in
supply.
Marine Products:
Shrimps and Prawns: ITC exports premium marine products,
leveraging India's coastal advantages.
Processed Fruits:
Fruit Purees/Concentrates, IQF/Frozen Fruits, Organic Fruit
Products: These value-added products cater to global markets,
including Western Europe, North Africa, West Asia, Japan, and North
America. ITC is a leading exporter of mango, guava, papaya, and
pomegranate products, focusing on organic and Fairtrade- certified
items (ITC Ltd).
Coffee:
ITC exports high-quality Indian coffee, sourced from the country’s
renowned coffee-growing regions, emphasizing sustainability
and traceability.
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ITC Ltd
ITC Paperboards & Packaging Businesses
No. 1 in Revenue and Profitability

• One of India's largest, greenest and most technologically
advanced
• ITC Next strategy focuses on value-added paperboards,
sustainable packaging and accelerated adoption of Industry 4.0
technologies
• Contributing to ‘Make in India’ and Import Substitution
• Anchoring local forestry value chains, empowering farmers,
enhancing green cover, generating livelihoods
• First in India to obtain Forest Stewardship Council-Forest
Management (FSC®-FM)
• Invested in a green boiler to increase share of renewable energy
in its operations
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ITC Ltd
Highlights and Products of ITC's Paperboards and Packaging Business

Business Highlights:
Sustainable Growth: ITC's Paperboards and Packaging business reported significant growth, driven by an
increasing demand for eco-friendly and sustainable packaging solutions. The company's sustainable product
portfolio saw a two-fold revenue increase over the previous year.
Capacity Expansion: The value-added paperboards segment has been strengthened through substantial
capacity augmentations over the past five years. ITC continues to invest in developing state-of-the-art
manufacturing facilities, like the one in Sehore, Madhya Pradesh, to produce advanced biodegradable products.
Environmental Stewardship: ITC's commitment to environmental sustainability includes significant efforts

in afforestation, with over 1 million acres greened and support for marginal farmers, generating over 190 million
person-days of employment. Their initiatives also focus on decarbonization and increasing renewable energy
usage.
Innovative Solutions: The business has pioneered several innovative and sustainable packaging solutions
such as Bioseal (compostable packaging), Oxyblock (recyclable coatings for enhanced barrier properties), and the
Filo and Omega series which include various applications for food and beverage packaging
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ITC's Paperboards, Paper and
Packaging Businesses
• Promoting manufacturing excellence with
state-of-the-art factories adopting best-in-class
technologies
• Established India's largest integrated pulp
and paper mill, anchoring inclusive fiber value
chain and enabling import
substitution
• Scaling up the value-added products
portfolio, pioneering innovative fiber-based
solutions as well as sustainable
packaging options
• A trendsetter in digital adoption and a
pioneer in Industry 4.0 technology adoption.
The digital interventions include
Industrial IoT for Smart Operations, Integrated
Data Platform, AI/ML algorithms for
optimization in manufacturing
process, AI/ML based image analytics and IoT
based crop monitoring & advisory, computer
vision-based solutions to
improve workforce safety 29
ITC Ltd
• FiloBev: Designed for beverage cups.

• FiloServe: Catering to quick-service restaurants,
bakeries, and food retail.
• FiloPack: Used for packaging sweets and deep
freeze applications.
Omega Series:
OmegaBev and OmegaBev Vio: Certified
compostable solutions, popular with eco-conscious
brands
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ITC Ltd
ITC Hotels
With ‘Namaste’ as the enduring symbol of its brand

experience and ‘Responsible Luxury’ as the guiding
premise, ITC Hotels are an archetype of the culture
and ethos of each destination offering authentic,
indigenous luxury experiences which are in harmony
with the environment and society.
With a platinum-grade commitment to our guests and
the planet, each ITC Hotel is certified with a LEED
(Leadership in Energy and Environmental Design)
Platinum rating for globally recognised planet positive
endeavours.
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ITC Ltd
ITC Hotels Business Highlights and

Financial Performance in 2023
Expansion and Growth:
ITC Hotels expanded its portfolio to over
120 properties across various segments.
The brands include:
• ITC Hotels: Luxury segment
• Mementos: Luxury lifestyle segment
• Welcomhotel and Storii:
Premium segment
• Fortune: Mid-market to upscale
segment
• WelcomHeritage: Leisure and
heritage segment
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ITC Ltd
ITC Hotels Business Highlights and
Financial Performance in 2023
• Pre-eminent Hotel Chain in India with

over 120 properties
• World-class properties under 6 brands - ITC Hotels,
Mementos, Welcomhotel, Storii, Fortune and
WelcomHeritage
• ITC Next strategy focuses on an "Asset-right"
approach, sweating existing assets and creating
additional revenue streams
• Iconic cuisine brands like Bukhara, Dum Pukht,
Avartana, Yi Jing, Royal Vega etc.
• Trailblazer in 'Responsible Luxury' & Sustainability
• All luxury collection hotels are LEED Platinum certified
• ITC Hotels & Welcomhotels achieved global 2030
Carbon emissions targets well ahead of time
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ITC Ltd
Strategic Initiatives:
• ITC implemented an "Asset-right" strategy,
focusing on maximizing returns from existing
assets and creating new revenue streams. This
approach involves leveraging management
contracts and partnerships to expand its
footprint without significant capital expenditure
(ITC Ltd).
• The business also invested in digital
transformation and technology to enhance
guest experiences and operational efficiencies.
Sustainability and Recognition:
• ITC Hotels continued its leadership in
sustainable luxury, achieving various
certifications and accolades for its
environmental initiatives. The properties
emphasize energy efficiency, water
conservation, and waste management (ITC Ltd).
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ITC Ltd
Financial Performance
Revenue and Profitability:
• The Hotels business saw substantial growth in revenue, reflecting the post-pandemic recovery in
the hospitality sector. The business contributed significantly to ITC’s overall profitability.
• ITC Hotels' revenue grew at a compounded annual growth rate (CAGR) of 12% from FY19 to FY23
Demerger Plans:
• ITC proposed a strategic demerger of its Hotels business to unlock value and improve capital
allocation. This move aims to provide greater operational focus and enhance shareholder value by
allowing the hotels business to operate as an independent entity
Investment in New Properties:

• ITC continued to invest in new properties and refurbishments to maintain its competitive edge
and cater to evolving customer preferences. This includes the launch of new properties under its
various brands across India
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ITC: Enriching Tourism Landscape of
India
ITC’s Hotels Business is one of the
fastest growing hospitality chains in the
country. The Business has over 120
properties under
6 distinctive brands – ‘ITC Hotels’ in the
Luxury segment, ‘Mementos’ in the
Luxury Lifestyle segment, ‘Welcomhotel’
and ‘Storii’
in the Premium segment, ‘Fortune’ in the
Mid-market to Upscale segment and
‘WelcomHeritage’ in the Leisure &
Heritage
segment. ITC’s Hotels business
meaningfully contributes to the tourism
potential of the country, while
supporting livelihoods.
The first 12 LEED Zero Carbon hotels in
the world and the first 2 LEED Zero
Water properties are ITC Hotels.
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ITC Ltd
ITC Infotech
• Wholly owned subsidiary of ITC Limited and a leading
global technology services and solutions provider
• Employees from 40 nationalities; Operating in 39
Countries; 60+ Fortune 500 Clients
• ‘Orbit Next’ strategy powering the next horizon of growth
and differentiation
• Capability-led differentiation through a portfolio of client
and industry-led capabilities including PLM-led Digital
Thread Solutions, Digital Manufacturing, Open Hospitality,
Cloud, and Sustainability
• Strategic partnership with PTC Inc., (US-headquartered,
global technology company) to start new Service Line, DxP
Services, comprising a global ecosystem of PLM-led
Digital Thread and SaaS experts
• Amplifying new-age Digital capabilities with sustained
Analyst recognition across CPG Digital Services, Digital CX
Services, Digital Workplace Services, Manufacturing
Digital Solutions and Intelligent Automation Services
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ITC
CORPORATE
GOVERNANCE
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ITC Ltd
Corporate Governance Philosophy of ITC Limited

ITC Limited's corporate governance philosophy is built on its
unwavering commitment to enhancing shareholder value responsibly,
with a strong focus on ethical business conduct and sustainability. ITC
adheres to the highest standards of governance, ensuring
transparency, accountability, and fairness in all its operations. The
company believes that effective corporate governance is crucial for
long-term business success and for fostering trust among
stakeholders, including shareholders, customers, employees, and the
broader community.
ITC, a diversified conglomerate in India, emphasizes transparency and

ethical conduct in its corporate governance practices. Their annual
report for FY 2022-23 [ITC Annual Report 2022-23] outlines a
governance philosophy built on the cornerstones of trusteeship,
transparency, ethical corporate citizenship, empowerment &
accountability, and control. Let's delve deeper into the composition of
their board and analyze the contribution of its members to their
fiduciary duties.
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ITC Ltd
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ITC Ltd Corporate Governance Philosophy of ITC Limited
Sanjiv Puri
Chairman & Managing Director
Education – B.Tech from Indian Institute of Technology, Kanpur
Linkedin - https://www.linkedin.com/in/sanjiv-puri/
Current Position:
• Chairman and Managing Director (CMD) of ITC Limited: Sanjiv
Puri has been serving as the CMD of ITC Limited since May 2019.
He was appointed as the Managing Director in 2018 and later
elevated to the role of Chairman
• Joined ITC in 1986: Puri began his career with ITC in 1986, starting
in the company's packaging and printing business
• CII Leadership: Puri has been actively involved with the Confederation of Indian Industry
(CII) and has served as the Chairman of the CII National Council on Agriculture and the CII
National Council on Consumer Affairs .
• Other Roles: He has contributed to various industry forums and government advisory
committees, playing a significant role in shaping policy and industry standards .
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ITC Ltd
Sumant Bhargavan
Executive Director, Wholetime Director
 Skillsets: Strategic Management; Operational Excellence; Sustainability and Safety; Leadership:
 Responsibilities: Overseeing the Paperboards, Paper and Packaging, Personal Care, and
Education & Stationery Products businesses, along with the Trade Marketing & Distribution
(TM&D) vertical.
 Director on the Board of The Tobacco Institute of India
 Director on the Board of Surya Nepal Private Limited, a joint venture subsidiary of ITC in
Nepal
 Council Member of the CII Eastern Region
Supratim Dutta
Executive Director & Chief Financial Officer
• As the CFO, Dutta oversees the company's financial operations, ensuring strategic
financial management and control.
• He is responsible for driving ITC’s financial strategy and ensuring the company’s
financial health and sustainability.
• In July 2022, he was appointed as a Whole-time Director on the Board of ITC
Limited
• Dutta is presently on the Boards of ITC Hotels Limited, ITC Infotech India
Limited, Surya Nepal Private Limited, Russell Credit Limited and
WelcomHotels Lanka (Private) Limited, amongst others.
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ITC Ltd
Hemant Malik
Executive Director
• Hemant Malik is the Executive Director and Divisional Chief
Executive of the Foods Business at ITC Limited. He was appointed as
a Whole Time Director on ITC's Board effective August 12, 2023.
• Hemant Malik joined ITC in 1989 after completing his MBA from the
Indian Institute of Management (IIM), Kolkata.
• He has served in various roles across multiple business segments
including Tobacco, Lifestyle Retailing, and Packaged Foods. Notably,
he managed the Wills World Cup sponsorship in 1995, which was
Hemant Malik's leadership,
ITC's Foods Business has one of India's largest sponsorship events at the time.
developed a robust • In 2000, Malik took charge of Lifestyle Retail Operations and was
portfolio of brands, including: instrumental in setting up the first 25 Wills Lifestyle stores.
Aashirvaad • FICCI and CII: Malik is actively involved in industry committees,
Sunfeast serving as the Chairman of the Food Processing Committee at the
Bingo! Federation of Indian Chambers of Commerce & Industry (FICCI) and
Kitchens of India as a Member of the Confederation of Indian Industry (CII) FMCG
B Natural Committee.
Fabelle
Sunbean
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ITC Ltd
Shilabhadra Banerjee Hemant Bhargava Alka Marezban Bharucha

Independent Director Independent Director Independent Director
Hemant Bhargava is an Independent Director Bharucha is a Senior Partner at Messrs.
Shilabhadra Banerjee is an Independent
on the Board of ITC Limited. He joined ITC as a Bharucha & Partners, Advocates &
Director on the Board of ITC Limited. He joined
Non-Executive Independent Director on Solicitors, Mumbai. She completed her
the ITC Board as a Non-Executive Director on
December 20, 2021. B.A. (Hons.) and L.L.B. from the University
July 24, 2014, and became an Independent
Director on July 30, 2014. Banerjee has a rich • Master's degree in Economics from Lucknow of Bombay and Masters in Law from the
University. University of London. She is a Solicitor
educational background, holding a Master's
degree in History from St. Stephen's College, • Master's in Financial Management from the with the High Court of Mumbai and
Jamnalal Bajaj Institute of Management Supreme Court of England and Wales, and
Delhi, a Post Graduate Diploma in Public
Studies. also an Advocate on Record with the
Administration from the Indian Institute of
Supreme Court of India.
Public Administration, New Delhi, and an Hemant Bhargava is also on the boards of
M.Phil. in Social Sciences from the University Larsen & Toubro Limited and The Tata Power
of Punjab. Bharucha is also an Independent
Company Limited, among other companies
Director of Ultratech Cement Limited,
Hindalco Industries Limited and
Orient Electric Limited, Aditya Birla
Sun Life AMC Limited amongst
others.
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ITC Ltd
Arun Duggal Mukesh Gupta Rahul Jain

Independent Director Non-Executive Director Non-Executive Director
Gupta holds Degrees of Bachelor in Science Jain, an IAS Officer, is also a Chartered Accountant
Duggal, a Mechanical Engineer from the and Masters in Business Administration and holds Masters Degree in Commerce from the
Indian Institute of Technology, Delhi ('IIT (Human Resources). He joined LIC as a Direct University of Pune. He is the Joint Secretary in the
Delhi'), and an M.B.A. from the Indian Recruit Officer in 1984 and retired as its Department of Investment and Public Asset
Institute of Management, Ahmedabad ('IIM Managing Director on September 30, 2021. Management, Ministry of Finance, Government of
Ahmedabad'), is an international banker with During his long tenure of 37 years, he worked India. Prior to this, he was serving as Private
global experience in financial strategy, M&A across diverse set of roles building multi- Secretary to the Minister of State (Independent
and capital raising. His professional career dimensional experience in different capacities, Charge) for Tourism and Culture, Government of
includes 26 years with Bank of America especially in Insurance and Marketing. Gupta India.
('BoA'), primarily in the USA, Hong Kong and held prominent positions in the Corporate
Japan, with his last assignment as Chief Office and three major zones of LIC, including Presently, Jain is a Government nominee
Executive of BoA, India, from 1998 to 2001. Executive Director (Personnel) and Executive on the Board of Advisors of SUUTI and a
He was the Chief Financial Officer of HCL Director (Bancassurance) at Corporate Office, Director of National Financial Holdings
Technologies Limited, India, from 2001 to Marketing Manager of Bikaner Division, Senior Company Limited, AI Airport Services
2003. He has also been the Chairman of the Divisional Manager of two Divisions viz., Limited and National Land Monetization
American Chamber of Commerce, India, and Amritsar and Hyderabad, Regional Manager Corporation Limited, amongst others.
on the Board of Governors of the National (Bancassurance & Alternate Channels) of LIC's
Institute of Bank Management. He is South Central Zone, Regional Manager
presently a Trustee of the Chennai (Marketing) of Western Zone, and Zonal
Mathematical Institute. Manager of the Central Zone. 45
ITC Ltd
Nirupama Rao Atul Singh Pushpa Subrahmanyam

Independent Director Non-Executive Director Independent Director
Subrahmanyam, a Masters in
A Post Graduate in English Literature, she Singh holds Degrees of Bachelor in Commerce Development Planning and Project
is also a Fellow - Harvard University, from St. Xavier's College, Kolkata, and Masters in Management from the University of
Fellow - Brown University, Jawaharlal Business Administration from the Neeley School of Bradford, UK, and Masters in Political
Nehru Fellow, and a recipient of the Business, Texas, USA. He is a retired executive Science from the University of Hyderabad,
Degree of Doctor of Letters (Honoris with more than 35 years of diverse experience in is a retired IAS Officer with administrative
Causa) from the Pondicherry University. consumer-oriented roles across multiple Subrahmanyam
experience joined
of over 36 years. the Indian
She was conferred with the Vanitha Ratna geographies.
Singh started his career as an Auditor with Price Administrative Service in 1985 (Andhra
by the Government of Kerala in 2016. Waterhouse, USA and has held several senior Pradesh cadre) and has worked across
A career diplomat from the Indian Foreign leadership positions at Colgate-Palmolive, Coca- several sectors including tribal, women &
Service from 1973 to 2011, she served the Cola, and Fawaz Abdulaziz Alhokair Company. In child development, urban development
Government in several important positions 2022, he assumed the role of Executive Vice and poverty alleviation. She was the
including that of the Foreign Secretary of Chairman (Senior Management Personnel) of Secretary of the Ministry of Food
India. She has represented India in several Raymond Limited, a position from which he Processing Industries, Government of
countries during her distinguished career stepped down in August, 2023. India, for more than three years, from
and was the first Indian woman to be Singh is also a Director of Compass where she retired in January, 2022. She
appointed High Commissioner to Sri Lanka Limited (ultimate Holding Company of also worked as Finance Secretary of the
and Ambassador to China. Bata India Limited). combined State of Andhra Pradesh and
has expertise in handling public finance.
She is also an Independent Director of Since 2013, she managed the
KEC International Limited and JSW 46
employment intensive sectors of textiles
Steel Limited. and food processing industries at the
ITC Ltd
Report on THE COMPANY’S GOVERNANCE
Corporate Governance PHILOSOPHY
The Directors present the Company’s Report on
ITC defines Corporate Governance as a systemic
Corporate Governance pursuant to the Securities
process by which companies are directed and
and Exchange Board of India (Listing Obligations and
controlled to enhance their wealth-generating
Disclosure Requirements) Regulations, 2015 (‘Listing
capacity. Since large corporations employ a vast
Regulations’).
quantum of societal resources, ITC believes
that the governance process should ensure that
ITC Limited has been one of the frontrunners in
these resources are utilised in a manner that
India to have put in place a formalised system of
meets stakeholders’ aspirations and societal
Corporate Governance. Its governance framework
expectations.
enjoins the highest standards of ethical and
responsible conduct of business to create value for
all stakeholders.
47
ITC Ltd
ITC’s Corporate Governance structure, systems and processes are based on two core
principles:
(i) Management must have the executive freedom to drive the enterprise forward
without undue restraints, and
(ii) This freedom of management should be exercised within a framework of effective
accountability.
ITC believes that any meaningful policy on Corporate Governance must empower the
executive management of the Company. At the same time, Governance should create a
mechanism of checks and balances to ensure that the decision-making powers vested in the
executive management are used with care and responsibility to meet stakeholders’ aspirations
and societal expectations.
Strategic supervision by the Board of Directors
THE GOVERNANCE
Strategic management by the Corporate Management
STRUCTURE Committee
The practice of Corporate Executive by the Divisional Chief
Governance in ITC takes management
Executive
place at three interlinked assisted by the Divisional
levels: Management Committee
48
49
50
BOARD OF DIRECTORS
Composition
The ITC Board is a balanced Board, comprising Executive and Non-Executive
Directors. The Non-Executive Directors include independent professionals.
Independent Directors represent at least 50% of the total strength of the Board.
The Governance Policy of the Company, inter alia, requires that Non-Executive
Directors be drawn fromamongst eminent professionals, with experience in
business / finance / law / public administration and enterprises. The present
composition of the Board represents an optimal mix of professionalism, knowledge
and experience. The Policy on Board Diversity requires the Board to have balance
of skills, competencies, experience and diversity of perspectives appropriate to
the Company.
The Directors of the Company possess the skills, expertise and
competencies, as identified by the Board, and provided in the Annexure
forming part of this Report.
51
Remuneration Policy
ITC’s Remuneration strategy is performance based,
competitive and values led. It is designed to reward
holistic performance that is in congruence with the
Company’s “triple bottom line” approach to business,
to attract and retain high quality talent and is anchored
on ITC’s values, all of which are integral in pursuit of
the Company’s vision and mission of enhancing the
wealth generating capability of the enterprise in a
globalised environment, while delivering superior and
sustainable stakeholder value. The Remuneration
Policy of the Company is market-led and factors in the
competitive context of each business. The Company
has adopted a comprehensive ‘Total Rewards’
approach to remuneration that, inter alia, promotes a
superior quality of personal and work life by combining
both cash and non-cash components / benefits.
The Company’s Policy on remuneration of
Directors, Key Managerial Personnel and
other employees, as approved by the Board,
may be accessed on the Company’s corporate website
at https://www.itcportal.com/remuneration-policy .
There has been no change in the Policy during the
year. 52
Contribution of ITC Limited's Board Members to Fiduciary Duties

ITC Limited's board members, with their extensive and diverse expertise,
play a pivotal role in fulfilling their fiduciary duties of care and diligence.
These duties are essential for maintaining ITC’s reputation as a responsible
corporate entity and ensuring the company's long-term sustainability and
success.
Key Contributions to Fiduciary Duties:
1. Strategic Oversight and Guidance: The board, led by Chairman and Managing Director Sanjiv Puri,
provides strategic direction and oversight, ensuring that ITC’s operations align with its long-term goals and
stakeholder interests. Their collective experience in various industries helps in formulating strategies that are
innovative, sustainable, and growth-oriented.
2. Independent Oversight and Accountability: Independent directors like Shilabhadra Banerjee, Hemant
Bhargava, and Alka Marezban Bharucha bring an impartial perspective to the board's decision-making
process. Their involvement in key committees, such as the Audit Committee and Nomination & Remuneration
Committee (NRC), ensures robust checks and balances, enhancing transparency and accountability within
the company. 53
1. Risk Management and Compliance: Board members with backgrounds in finance and
legal affairs, such as Supratim Dutta and Alka Marezban Bharucha, contribute significantly
to ITC’s risk management and compliance frameworks. They help in identifying potential
risks and ensuring that the company adheres to regulatory requirements and ethical
standards.
2. Sustainability and Corporate Social Responsibility (CSR): The board's commitment to
sustainability is evident in their active promotion of eco-friendly practices and CSR
initiatives. This aligns with ITC's philosophy of creating enduring value for society and the
environment. The involvement of directors in the Sustainability Committee underscores their
dedication to integrating sustainability into the core business strategy.
3. Innovation and Operational Excellence: Executive directors like Sumant Bhargavan and
Hemant Malik drive innovation and operational excellence within their respective domains.
Their leadership ensures that ITC remains competitive and continues to deliver high-quality
products and services safely and sustainably.
4. Stakeholder Engagement: The board members' extensive networks and experience in
various sectors enhance ITC’s stakeholder engagement efforts. They play a crucial role in
building and maintaining relationships with customers, suppliers, regulators, and the
community, fostering trust and goodwill.
54
Insights on Board Members as ‘Trustees of Social Wealth’
The board members of ITC Limited are indeed trustees of social wealth. They are not only
focused on generating financial returns but are equally committed to creating social and
environmental value. Their diverse expertise and ethical leadership ensure that ITC operates with
a high degree of corporate responsibility.
 Ethical Leadership: The board’s adherence to ethical practices sets a strong example for the
entire organization. This ethical leadership is crucial for maintaining the trust of stakeholders
and the general public.
 Long-Term Vision: By focusing on sustainability and responsible business practices, the

board ensures that ITC’s growth is inclusive and beneficial to all stakeholders, including future
generations.
 Balanced Decision-Making: The presence of independent directors ensures that decisions

are well-balanced and consider the interests of all stakeholders, thus preventing any potential
conflicts of interest.
55
ITC Limited's corporate governance framework is

built on a foundation of trusteeship, transparency,
ethical corporate citizenship, empowerment, and
accountability. This philosophy is designed to
create a robust corporate culture that prioritizes
ethical conduct and value creation for all
stakeholders
Key Aspects of ITC's Corporate Governance:
• Transparency: ITC ensures maximum appropriate disclosures both externally and internally to promote
accountability and trust among stakeholders. This transparency helps in explaining the company’s policies
and actions clearly (India CSR).
• Ethical Corporate Citizenship: The company emphasizes high standards of ethical behavior within the
organization and in its external relationships. This commitment to ethics is seen as fundamental to
protecting stakeholder value and fostering a healthy corporate environment (India CSR) (Media Infoline).
• Empowerment: ITC promotes decision-making at appropriate levels to encourage innovation and creativity,
aligning with their governance principle that management should have the freedom to drive the enterprise
forward. Empowerment is paired with accountability to enhance performance and effectiveness (India CSR)
(Media Infoline).
• Control: ITC implements a framework of checks and balances to ensure that management’s freedom is
exercised responsibly, preventing misuse of power and ensuring effective risk management (India CSR) (ITC).
• Board Composition and Skills: ITC's board is composed of members with diverse skills, expertise, and
competencies to guide the company in strategic decision-making, risk management, and fostering a
56
cohesive and ethical organizational culture (India CSR).
ITC
Management
Analysis
57
ITC Ltd Management Analysis
Management Analysis
Sr. no. Name Designation Education Background Comments
1 Sanjiv Chairman & He is an alumnus of the Mr. Sanjiv Puri, aged 61, is the Chairman & Managing Mr. Puri is well qualified and has
Puri MD Indian Institute of Director of ITC Limited. He joined ITC in 1986 and has lots of experience. He has been
Technology, Kanpur, and held various leadership roles. Mr. Puri is known for his with ITC for over 3 decades and
the Wharton School of focus on innovation and sustainability, driving ITC's has held various leadership
Business, USA. growth and competitiveness. Mr. Puri has received positions. Since he took charge
numerous awards and honors for his contributions to as MD in May 2018 and as
business and sustainability. He is actively involved in Chairman a year later, ITC has
various industry associations and initiatives promoting grown rapidly across segments,
agriculture, sustainability, and economic development. be it on revenue, profitability, or
market share.
2 Supratim CFO & A qualified Chartered Mr. Supratim Dutta, aged 57, serves as the Chief Mr. Dutta is well qualified as he
Dutta Whole Time Accountant and Cost Financial Officer (CFO) and Wholetime Director at ITC. has held various senior positions
Director Accountant He joined the company in November 1990 and he is a in fields of finance both at
Chartered Accountant and Cost Accountant. Dutta has business and corporate level. He
over three decades of experience in various finance has been with ITC for more than
roles at ITC, including Corporate Financial Controller 3 decades and has loads of
and Executive Vice President of Corporate Finance. experience.
He is responsible for Finance, Accounting, Internal
Audit, IT Functions, and Investment Subsidiaries.
He is also involved in industry committees and serves
on the boards of several companies, including ITC
Infotech India Limited and Surya Nepal Private Limited.
58
3 Hemant Executive He completed his B.A. Mr. Hemant Malik, aged 57, assumed the role of Mr. Malik joined ITC in 1989 and
Malik Director from Delhi University Wholetime Director on the ITC Board starting from August has more than 33 years of
and M.B.A. from the 12, 2023, overseeing the Foods Business Division. With experience. He is in charge of the
Indian Institute of over 33 years of experience at ITC, Mr. Malik has held Foods Business Division of the
Management, Calcutta. various leadership positions across different sectors Company. He has worked across
including Tobacco, Lifestyle Retailing, and Packaged Foods. multiple businesses including
Prior to his current role, he served as the Divisional Chief Tobacco, Lifestyle Retailing and
Executive of the Foods Business Division since October Packaged Foods. With Loads of
2016, and previously led the Trade Marketing & experience, he is the right person
Distribution ('TM&D') Vertical. Mr. Malik's contributions for his role.
include the development of the FMCG Sales Network and
setting up the new FMCG distribution highway during his
tenure. Malik does not hold directorship in any other
company.
4 Sumant Whole time He is an alumnus of NIT Mr. Sumant Bhargavan, aged 59, serves as a Wholetime Mr. Bhargavan joined ITC in
Bhargavan Director Durgapur Director on the Board of ITC since November 16, 2018. He January 1986, and has handled a
oversees the Paperboards, Paper and Packaging, Personal wide range of responsibilities
Care, Education & Stationery Products Businesses, and the across several businesses. He
Trade Marketing & Distribution Vertical. Mr. Sumant joined spent his first 19 years with ITC in
ITC in January 1986, gaining extensive experience across Manufacturing operations of the
various businesses. Before his directorial role, he served as Tobacco Division and has worked
President of FMCG Businesses since April 2016 and was in four production units as well as
previously Divisional Chief Executive of the Tobacco at the Head Office. He is well
Division. Mr. Sumant spent 19 years in Tobacco Division qualified for his role as a Whole
manufacturing operations and later transitioned to the time Director.
Foods Business, where he established the 'Bingo!' Snack
Food category in October 2004. He also led ITC Infotech
India Limited as its Managing Director from September
2009 to October 2014. Mr. Sumant has served on the
boards of ITC Infotech's subsidiaries in the UK and the USA,
as well as Surya Nepal Private Limited and The Tobacco
Institute of India. 59

5 Nakul Executive Mr. Anand is an Mr. Nakul Anand led ITC's Hotels Division until Mr. Anand is well qualified and
Anand Director Economics Honours December 24, 2015, known for his great leadership. has lots of experience. He has
graduate from Delhi He's highly respected for his ability to manage people, held various leadership roles at
University and holds build teams, and for developing a culture of action and ITC and is responsible for high
an AMP degree from results. Mr. growth of ITC’s Hotel Business.
the Bond University, Anand introduced quality control measures like
Australia. Operational Excellence and Six Sigma standards
revolutionizing ITC's hotel business. He joined ITC's
Hotels Management Training Programme in 1978 and
has since been instrumental in pioneering innovative
concepts in the hospitality industry. Mr. Anand has
held various leadership roles at ITC, including
Executive Director and Managing Director of ITC
Hotels Limited. His contributions have earned him
recognition in the hotels and tourism sector.
6 Shilabhadra Independen He is a Masters in Mr. Shilabhadra Banerjee, aged 75, became a Non- Mr. Banerjee is well qualified
Banerjee t Non- History from St. Executive Director at ITC in July 2014 and later and has 37 years of experience
Executive Stephen's College, became an Independent Director. Banerjee joined as he served in various
Director Delhi, Post Graduate the Indian Administrative Service in 1971 and served positions within the
Diploma holder in in various significant positions within the Government of India. His
Public Administration Government of India, including Joint Secretary in the qualifications and recognition
from the Indian Ministry of Petroleum and Natural Gas and Ministry makes him a strong candidate
Institute of Public of Urban Development. He retired as Secretary of for the role of independent
Administration, New the Ministry of Tourism in October 2008. Mr. director.
Delhi. He joined the Banerjee brings has 37 years of experience in public
Indian Administrative service and has previously served on ITC's board
Service in 1971 from February 2010 to March 2014.
He does not hold directorship in any other company.
60
7 Arun Kumar Independent He is a Mechanical Mr. Arun Duggal, aged 77, joined the ITC Board as a Non- Mr. Duggal has lots of
Duggal Non- Engineer from IIT Executive Independent Director in September 2014. experience in the field of
Executive Delhi and an M.B.A. Mr. Duggal has extensive global experience in financial Banking and Finance making
Director from IIM Ahmedabad strategy, M&A, and capital raising, with 26 years at Bank him a good candidate for his
of America (BoA) in the USA, Hong Kong, and Japan.He role as an independent director.
served as Chief Executive of BoA India and later as CFO
of HCL Technologies Limited, India. Duggal has chaired
the American Chamber of Commerce, India, and served
on the Board of Governors of the National Institute of
Bank Management. He is a Trustee of the Chennai
Mathematical Institute and has spearheaded initiatives
in social and educational sectors, including founding
FICCI's 'Women on Corporate Boards' Programme.
Duggal is currently Chairman & Independent Director of
ICRA Limited and a Non-Executive Director of Dr. Lal
PathLabs Limited, among other positions. He has
received Distinguished Alumnus Awards from both IIT
Delhi and IIM Ahmedabad
8 Anand Independent He is a Post Graduate Mr. Anand Nayak, aged 72, became a Non-Executive Mr. Nayak served ITC for over 42
Nayak Director in Personnel Independent Director at ITC on July 13, 2019. Mr. Nayak years until his retirement. With
Management and joined ITC in 1973 and served for over 42 years until his his extensive business
Industrial Relations retirement in December 2015. During his tenure, Mr. knowledge, he is right fit for the
from XLRI Nayak held various roles across different businesses and role of an independent director.
Jamshedpur. at Corporate Headquarters. He led the Human
Resources Function from 1996 to 2015 and served on
the Corporate Management Committee for over 18
years. He also oversaw Social Sector initiatives as part
of ITC's CSR agenda and mentored the Mission Sunehra
Kal team, focusing on sustainability solutions for rural
India. He does not hold directorship in any other
company. 61
9 Hemant Independent He is a Post Graduate in Mr. Hemant Bhargava, aged 64, joined the ITC Board as a Mr. Bhargava has loads of
Bhargava Director Economics from the Non-Executive Independent Director on December 20, experience as he has worked in
Lucknow University and 2021. Mr. Bhargava began his corporate journey in 1981 India as well as abroad, making
has also studied Masters with the Life Insurance Corporation of India and him a good fit as an
in Financial Management eventually became its Chairman and Managing Director independent director.
from the Jamnalal Bajaj in January 2019. He also served as the Non-Executive
Institute of Management Chairman of IDBI Bank and LIC Housing Finance Limited.
Studies With 38 years of experience, Bhargava has worked
extensively in Marketing, International Operations, and
new ventures, both in India and abroad. He is currently
on the Boards of Larsen & Toubro Limited, The Tata
Power Company Limited, and UGRO Capital Limited,
among others
10 Alka Independent She completed her B.A. Mrs. Alka Marezban Bharucha, aged 66, assumed the role Mrs. Bharucha has extensive
Marezban Director (Hons.) and L.L.B. from of Non-Executive Independent Director on the ITC Board knowledge of law, banking and
Bharucha the University of Bombay starting from August 12, 2023. She is a Senior Partner at finance. She has both national
and Masters in Law from Messrs. Bharucha & Partners, Advocates & Solicitors, and international experience,
the University of London. Mumbai. Mrs. Bharucha is recognized as a Solicitor with making her a good fit for her
the High Court of Mumbai and Supreme Court of role as an independent director.
England and Wales, as well as an Advocate on Record
with the Supreme Court of India. With over 30 years of
experience, she co-founded Bharucha & Partners in
2008, a firm ranked among India's top law firms by RSG
Consulting, London. Mrs. Bharucha specializes in
mergers & acquisitions, joint ventures, private equity,
and banking & finance. She currently serves as an
Independent Director of Ultratech Cement Limited,
Hindalco Industries Limited, Orient Electric Limited,
Aditya Birla Sun Life AMC Limited, among others.
62
11 Mukesh Non- Mr. Gupta holds Degrees Mr. Mukesh Gupta, aged 62, became a Non-Executive Mr. Gupta was part of the
Kumar Executive of Bachelor in Science and Director on the ITC Board starting from October 27, 2021, biggest insurance company in
Gupta Director Masters in Business representing the Life Insurance Corporation of India ('LIC'). India “LIC”. He held various roles
Administration (Human Gupta began his career as a Direct Recruit Officer at LIC in in LIC and served it till
Resources) 1984 and served until his retirement as Managing retirement, this long tenure gave
Director on September 30, 2021. During his extensive 37- his lots of experience about
year tenure, Gupta held various significant roles across government workings, making
different zones and divisions of LIC, him an ideal fit for his role as an
including Executive Director (Personnel) and Executive independent director.
Director (Bancassurance) at the Corporate Office. His
experience spans areas such as insurance and marketing.
Currently, Gupta serves on the Boards of IDBI Bank
Limited and Jindal Worldwide Limited
12 Shyamal Independent Mr. Mukherjee is a Mr. Shyamal Mukherjee, aged 64, assumed the role of Mr. Mukerjee was with PWC,
Kumar Director Chartered Accountant Non-Executive Independent Director on the ITC Board one of the Big Four, for 37 years
Mukherjee and also holds Degrees of starting from August 11, 2021. Mr. Mukherjee previously and was known his vision and
Bachelor in Commerce served as the Chairman and Senior Partner of governance. His leadership
and Law from Delhi PricewaterhouseCoopers ('PwC') in India, where he qualities make him a perfect fit
University. dedicated over 37 years of his career. His leadership at for his role as an independent
PwC was marked by strategic vision and a focus on director.
innovation, governance, and strengthening capabilities..
Additionally, Mr. Mukherjee is actively involved in
educational initiatives as the Managing Trustee of the
Phanindranath Education Trust, Howrah. He also
contributes to the legal profession as a Member of the
Bar Council of Delhi. Presently, Mukherjee serves on the
Boards of Bharti Airtel Limited and UrbanClap
Technologies India Private Limited
63
13 Sunil Non- He holds Degrees of Mr. Sunil Panray, aged 65, assumed the role of Non- Mr. Panray has held various senior
Panray Executive Bachelor in Commerce and Executive Director on the ITC Board starting from positions at companies like Grant
Director Masters in Business August 11, 2021, representing Tobacco Thornton, Imperial Tobacco, etc.
Administration from Manufacturers (India) Limited, a subsidiary of British He is right for the role of
Concordia University in American Tobacco p.l.c. ('BAT'). He brings with him a independent director as he has
Montreal, Canada. wealth of experience gathered from his tenure in already worked in the Tobacco
various senior executive positions. Mr. business and has expertise in this
Panray's professional journey includes roles at field.
Raymond Chabot Grant Thornton, Imasco Limited,
Imperial Tobacco, Canada, and BAT. He notably
served as the Vice-President Finance and Treasurer
of Canadian National Railway Company from 2012
to 2016. He does not hold directorship of any other
company.
14 Ajit Non- He did his post-graduation in Mr. Ajit Kumar Seth, aged 71, assumed the role of Mr. Seth, as an Ex-IAS, has worked
Kumar Executive Chemistry from St. Stephen's Non-Executive Independent Director on the ITC in diverse roles and has gathered
Seth Independent College, Delhi. Mr. Seth also Board starting from July 13, 2019. As a retired IAS extensive knowledge about Trade
Director has an M. Phil in Life Officer with over 41 years of administrative and Commerce. He has loads of
Sciences from the Jawaharlal experience, he served as the Cabinet Secretary of experience and is well qualified for
Nehru University, New Delhi, the Government of India for four years until his his role as an independent
and a Masters in retirement in June 2015. Seth's diverse career director.
Development Finance from includes significant roles in various ministries and
the University of postings, including the Ministry of Commerce, the
Birmingham, UK. Permanent Mission of India to the United Nations
at Geneva, and the Ministry of Textiles.. Currently,
Seth is not associated with the directorship of any
other company.
64
15 Meera Independent A Post Graduate in English Mrs. Meera Shankar, aged 73, assumed the role of Mrs. Shankar has loads of
Shankar Non- Literature, she joined the Non-Executive Independent Director on the ITC experience as she was an IFS
Executive Indian Foreign Service in Board starting from September 6, 2012. With a Post officer for 38 years and has
Director 1973 and had an illustrious Graduate degree in English Literature, she worked on foreign policy, security
career spanning 38 years. embarked on a distinguished career in the Indian matters, etc. Her knowledge on
Foreign Service in 1973, accumulating 38 years of foreign policy as well as on
service. Noteworthy roles include her tenure in the domestic policy makes her an
Prime Minister's Office, where she worked on ideal candidate for her role as an
foreign policy and security matters, and her independent director.
leadership of the Commercial Wing at the Indian
Embassy in Washington. Shankar also served as
Director General of the Indian Council of Cultural
Relations, overseeing India's cultural diplomacy,
and held key positions focusing on South Asia.
Beyond her contributions to ITC, Shankar serves as
an Independent Director for Pidilite Industries
Limited and Adani Transmission Limited, among
other organizations.
16 Rahul Non- He is an IAS Officer, a Mr. Rahul Jain, aged 43, assumed the role of Non- His expertise on urban and rural
Jain Executive Chartered Accountant and Executive Director on the ITC Board starting from development makes him an ideal
Director holds Masters Degree in January 1, 2024, representing the Specified fit for his role as an independent
Commerce from the Undertaking of the Unit Trust of India('SUUTI'). director as he can guide ITC’s
University of Pune. He is With over 18 years of experience in the Indian FMCG business.
the Joint Secretary in the Administrative Service, he has held various key
Department of Investment positions, including District Collector and Director
and Public Asset of the MP Town and Country Planning Department.
Management, Ministry of His expertise is in rural and urban development,
Finance, Government of disaster management, and electoral conduct. Mr.
India. Jain's board memberships include roles in Rewa City
Transport Services Limited, Bhopal Smart City
Development Corporation Limited, and Indore
Smart City Development Limited. 65
Commentary
The company has a skilled management team with extensive experience and technical knowledge.
Independent directors come from diverse backgrounds, including former civil servants like IAS
and IFS officers. After reviewing public data, we found no political connections among the
leadership or independent directors. Additionally, there are no conflicts of interest between
independent directors and the company.
The Current Managing director Mr. Sanjiv Puri has been with ITC since January 1986, holding
various leadership roles over more than three decades. He has led the company through
significant growth and transformation. Mr. Puri served as the Chief Operating Officer and President
of FMCG Businesses, showcasing his expertise in managing operations and driving growth. He's
also been involved in guiding ITC's subsidiaries. Mr. Puri's 'ITC Next' vision focuses on making
products that consumers love and he is all for using technology and making sure ITC is
sustainable. Mr. Puri aims to make ITC a big part of national goals like a net-zero economy.
Mr. Sanjiv Puri has been running ITC since December 6, 2015, when he became a Whole-time
Director on the Board. He later became the CEO in February 2017 and then the Managing Director
in May 2018. He took on the role of Chairman on May 13, 2019. During his leadership, ITC's FMCG
revenue grew massively from Rs 108 crore in 2003 to Rs 19,123 crore in 2023. This growth shows
how the company has expanded its range of products beyond just tobacco.
66
ITC Limited's management has demonstrated robust leadership and strategic vision, particularly in navigating
challenges and capitalizing on growth opportunities across diverse sectors.
Leadership and Vision:
• Under the leadership of Chairman Sanjiv Puri, ITC has maintained its focus on sustainability, innovation, and
digital transformation. Puri's vision emphasizes creating enduring value for stakeholders while contributing to
the nation's economic growth (Media Infoline).
• The company's credo, 'Nation First – Sab Saath Badhein,' reflects its commitment to holistic growth, ensuring
that business success translates into socio-economic benefits for India.
Strategic Initiatives:
• Sustainability: ITC is recognized for its sustainability initiatives, with a significant emphasis on eco-friendly
products and processes. The company leads in the eco-labelled products segment and the premium recycled
paperboards space (ITC).
• Digital Transformation: ITC has been investing in digital technologies to enhance operational efficiencies and
customer engagement across its businesses, including FMCG, hotels, and paperboards
Financial Management:
The management has effectively navigated the financial challenges posed by the pandemic, with a focus on
cost optimization and maintaining strong cash flows. Despite global supply chain disruptions and rising input
costs, ITC has shown resilience by adapting its strategies to mitigate these impacts
67
Innovation and Customer Focus:

• ITC has fortified its leadership in the Value Added Paperboard (VAP) segment through continuous
innovation. The company develops customized solutions tailored to the specific needs of end-use
industries, ensuring high levels of customer satisfaction and loyalty (ITC).
• In the Hotels Business, ITC's strategy includes offering diversified services and special packages to
attract various customer segments, enhancing revenue streams and enriching guest experiences
Corporate Governance:
• ITC's corporate governance is anchored in transparency, ethical corporate citizenship, and
accountability. The company has received accolades for its governance practices, reinforcing its
commitment to high ethical standards and responsible business conduct
Conclusion:
ITC's management has effectively steered the company through challenging times while positioning
it for sustainable growth and value creation. Their strategic initiatives in sustainability, digital
transformation, innovation, and strong corporate governance underscore ITC's commitment to its
stakeholders and the broader community.
68
ITC
Financial
Analysis
69
Financial Analysis India Tobacco Company Limited
NSE - ITC II BSE CODE-500875
Historical Financial Statement - ITC LTD
Year Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 LTM
Income Statement
Sales 35,306.4 38,817.2 39,192.1 42,767.6 43,448.9 48,339.6 49,387.7 49,257.5 60,644.5 70,919.0 70,593.2
# Sales Growth - 9.94% 0.97% 9.12% 1.59% 11.26% 2.17% -0.26% 23.12% 16.94% -0.46%
COGS 17,785.1 19,688.4 19,162.9 21,949.1 21,967.5 24,216.0 24,330.4 26,881.5 34,053.1 38,302.1 44,341.1
COGS % Sales 50.37% 50.72% 48.89% 51.32% 50.56% 50.10% 49.26% 54.57% 56.15% 54.01% 62.81%
Gross Profit 17,521.4 19,128.8 20,029.2 20,818.5 21,481.4 24,123.6 25,057.3 22,375.9 26,591.5 32,616.9 26,252.1
Gross Margin 49.63% 49.28% 51.11% 48.68% 49.44% 49.90% 50.74% 45.43% 43.85% 45.99% 37.19%
Selling & General Expenses 4,441.5 4,877.2 5,497.7 5,349.0 4,960.9 5,586.2 5,713.8 5,311.2 5,968.3 6,912.6
S&G Exp % Sales 12.58% 12.56% 14.03% 12.51% 11.42% 11.56% 11.57% 10.78% 9.84% 9.75%
EBITDA 13,079.9 14,251.6 14,531.5 15,469.5 16,520.6 18,537.4 19,343.5 17,064.8 20,623.2 25,704.3 28,973.1
EBITDA Margins 37.05% 36.71% 37.08% 36.17% 38.02% 38.35% 39.17% 34.64% 34.01% 36.24% 41.04%
Depreciation 964.9 1,028.0 1,077.4 1,152.8 1,236.3 1,396.6 1,644.9 1,645.6 1,732.4 1,809.0 -
Depreciation % Sales 2.73% 2.65% 2.75% 2.70% 2.85% 2.89% 3.33% 3.34% 2.86% 2.55% 0.00%
EBIT 12,115.0 13,223.7 13,454.1 14,316.7 15,284.3 17,140.8 17,698.6 15,419.2 18,890.7 23,895.3 28,973.1
EBIT Margins 34.31% 34.07% 34.33% 33.48% 35.18% 35.46% 35.84% 31.30% 31.15% 33.69% 41.04%
Interest 29.2 91.0 78.1 49.0 115.0 71.4 81.4 58.0 60.0 77.8 -
Interest % Sales 0.08% 0.23% 0.20% 0.11% 0.26% 0.15% 0.16% 0.12% 0.10% 0.11% 0.00%
Earning Before Tax 12,085.8 13,132.7 13,376.0 14,267.7 15,169.3 17,069.4 17,617.3 15,361.2 18,830.8 23,817.5 28,973.1
EBT % Sales 34.23% 33.83% 34.13% 33.36% 34.91% 35.31% 35.67% 31.19% 31.05% 33.58% 41.04%
Tax 4,060.9 4,596.4 5,358.2 5,549.1 5,916.4 6,313.9 4,441.8 4,555.3 5,237.3 6,438.4 6,349.7
Effective Tax Rate 33.60% 35.00% 40.06% 38.89% 39.00% 36.99% 25.21% 29.65% 27.81% 27.03% 21.92%
Net Profit 8,024.9 8,536.3 8,017.8 8,718.6 9,252.9 10,755.5 13,175.5 10,805.9 13,593.4 17,379.1 22,623.4
Net Margin 22.73% 21.99% 20.46% 20.39% 21.30% 22.25% 26.68% 21.94% 22.41% 24.51% 32.05%
No of Equity Shares 1,193.0 1,202.3 1,207.1 1,214.7 1,220.4 1,225.9 1,229.2 1,230.9 1,232.3 1,242.8
Earning Per Share 6.7 7.1 6.6 7.2 7.6 8.8 10.7 8.8 11.0 14.0
EPS Growth % 5.55% -6.44% 8.06% 5.63% 15.72% 22.17% -18.10% 25.65% 26.77%
Dividend Per Share 4.0 4.2 5.7 4.8 5.1 5.8 10.1 10.8 11.5 15.5
Dividend Payout ratio 59.46% 58.69% 85.31% 66.18% 67.93% 65.54% 94.70% 122.45% 104.25% 110.84%
70
Retained Earnings 40.54% 41.31% 14.69% 33.82% 32.07% 34.46% 5.30% 0.00% 0.00% 0.00%
ITC Ltd Financial Analysis
71
ITC Ltd Financial Analysis
72
Ratio Analysis
ITC LTD
Profitability Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales Growth 9.9% 1.0% 9.1% 1.6% 11.3% 2.2% -0.3% 23.1% 17.0%
Expenses Growth 11.5% 0.1% 4.2% -4.7% 21.5% 4.1% 6.5% 23.6% 11.1%
Sustainable Growth Rate 15.5% 15.0% 6.2% 10.1% 9.9% 9.8% 4.8% 0.3% 2.1% 5.2%
Gross Profit Growth 8.5% 6.8% 7.4% 4.8% 7.3% 2.0% -9.1% 17.9% 23.8%
EBITDA Growth 9.0% 2.0% 6.5% 6.8% 12.2% 4.3% -11.8% 20.9% 24.4%
EBIT Growth 9.2% 1.7% 6.4% 6.8% 12.1% 3.3% -12.9% 22.5% 26.3%
PBT Growth 10.0% 3.5% 7.9% 8.6% 10.0% 4.6% -10.5% 15.6% 24.7%
Net Profit Growth 8.6% -2.7% 10.3% 9.7% 11.7% 21.5% -14.2% 15.8% 25.3%
Dividend Growth 5.0% 36.5% -15.6% 8.9% 12.1% 77.0% 6.1% 7.1% 11.8%
Dividend Payout 53.1% 51.3% 72.0% 55.1% 54.7% 54.9% 80.0% 98.9% 91.4% 81.6%
Gross Margin 62.2% 61.3% 64.9% 63.9% 65.9% 63.5% 63.5% 57.8% 55.4% 58.6%
Operating Margin 37.0% 36.7% 37.1% 36.2% 38.0% 38.3% 39.2% 34.6% 34.0% 36.2%
PBT Margin 37.0% 37.0% 37.9% 37.5% 40.1% 39.6% 40.6% 36.4% 34.2% 36.5%
Net Margin 25.5% 25.2% 24.2% 24.5% 26.5% 26.6% 31.6% 27.2% 25.6% 27.4%
73
Ratio Analysis
Efficiency Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Debtor Days 25.22 18.64 17.85 21.12 22.53 30.47 18.94 18.54 14.82 15.21
Debtor Turnover 14.47 19.58 20.44 17.28 16.20 11.98 19.27 19.69 24.63 24.00
Inventory Days 85.34 80.74 84.40 69.27 62.96 59.35 65.62 77.04 65.39 60.57
Inventory Turnover 4.28 4.52 4.32 5.27 5.80 6.15 5.56 4.74 5.58 6.03
Net Fixed Asset Turnover 2.73 2.54 2.59 2.69 2.63 2.50 2.27 2.11 2.50 2.74
Total Asset Turnover 0.86 0.84 0.76 0.77 0.68 0.67 0.64 0.67 0.79 0.83
Sales/Capital Employed 1.28 1.21 0.92 0.92 0.83 0.82 0.75 0.81 0.97 1.02
Leverage Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Debt/Equity 0.9% 0.8% 0.2% 0.1% 0.1% 0.0% 0.4% 0.4% 0.4% 0.4%
Debt/Assets 0.6% 0.6% 0.2% 0.1% 0.1% 0.0% 0.4% 0.4% 0.3% 0.4%
Debt/EBITDA 1.9% 1.9% 0.6% 0.3% 0.2% 0.1% 1.4% 1.6% 1.2% 1.2%
Debt/Capital 0.9% 0.8% 0.2% 0.1% 0.1% 0.0% 0.4% 0.4% 0.4% 0.4%
CFO/Debt 3029.4% 3661.9% 11696.2% 23244.3% 36663.1% 93626.6% 5294.5% 4625.4% 6324.4% 0.0%
Debt Burden 1854.1% 2437.6% 8903.1% 16525.2% 28890.3% 70203.9% 4633.5% 3723.7% 5522.6% -882.2%
Interest Coverage (Times) 448.43 158.89 191.18 327.87 152.37 269.20 247.19 310.44 346.73 599.75
Operating Leverage 0.92 1.80 0.70 4.24 1.08 1.50 48.83 0.97 1.55
Financial Leverage 1.50 1.45 1.21 1.20 1.22 1.21 1.18 1.22 1.24 1.24
DuPont Ratio Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
DuPont ROA 22.0% 21.3% 18.4% 18.7% 17.9% 17.9% 20.2% 18.1% 20.1% 22.6%
Net Profit Margin 25.5% 25.2% 24.2% 24.5% 26.5% 26.6% 31.6% 27.2% 25.6% 27.4%
Sales/Total Asset 0.86 0.84 0.76 0.77 0.68 0.67 0.64 0.67 0.79 0.83
74
Return on Equity 33.0% 30.8% 22.3% 22.6% 21.9% 21.7% 23.9% 22.2% 24.8% 28.1%
Ratio Analysis
Capital Allocation Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Return on Capital Employed 47.6% 45.2% 34.9% 34.6% 33.4% 32.5% 30.7% 29.7% 33.2% 37.3%
EBIT Margins 34.3% 34.1% 34.3% 33.5% 35.2% 35.5% 35.8% 31.3% 31.1% 33.6%
Sales/Capital Employed 1.28 1.21 0.92 0.92 0.83 0.82 0.75 0.81 0.97 1.02
NOPAT 8345.46 8991.57 8602.52 9359.58 10089.99 11489.26 13774.73 11503.58 14120.49 17917.87
Return on Invested Capital 37.5% 40.5% 25.9% 24.1% 23.1% 23.3% 26.8% 23.9% 26.7% 30.1%
Cash Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Free Cash Flow (Rs Cr) 4,495 6,552 7,459 7,555 10,377 9,435 12,856 10,085 13,776 -2,700
Operating Cash Flow Growth 34.0% -0.4% 8.5% 23.9% -4.4% 16.7% -14.7% 25.9% -100.0%
Free Cash Flow Growth 45.8% 13.8% 1.3% 37.4% -9.1% 36.2% -21.6% 36.6% -119.6%
FCF/Sales 13% 17% 19% 18% 24% 20% 26% 20% 23% -4%
CFO/Total Assets 18% 21% 19% 19% 21% 18% 19% 17% 20% 0%
CFO/Total Debt 3029% 3662% 11696% 23244% 36663% 93627% 5295% 4625% 6324% 0%
Cash Interest Coverage 391.97 159.75 195.00 330.93 166.95 265.67 236.09 295.67 351.27 150.04
CFO/Capex 2.58 2.99 4.19 3.46 4.72 4.00 8.01 5.13 7.89 -
Valuation Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Enterprise Value (EV) 277376.9 253554.7 258165.8 337569.9 308956.2 360248.3 204057.2 264559.1 304478.5 472039.7
EV/EBITDA 21.21 17.79 17.77 21.82 18.70 19.43 10.55 15.50 14.76 18.39
Price/Earnings 31.21 26.75 27.80 32.50 27.13 28.39 13.54 20.10 19.92 24.53
Price/Sales 7.95 6.73 6.74 7.96 7.18 7.54 4.27 5.46 5.09 6.72
Price/CFO 38.21 26.53 26.96 32.04 23.68 28.96 14.37 21.47 19.58 #DIV/0!
75
Price/Book Value 10.30 8.23 6.19 7.34 5.94 6.16 3.23 4.46 4.95 6.89
76
Common Size P&L ITC LTD

Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Raw Material Cost 37.8% 38.7% 35.1% 36.1% 34.1% 36.5% 36.5% 42.2% 44.6% 41.4%
Change in Inventory 0.3% 0.6% 0.5% -1.4% -2.4% 0.4% 1.4% 1.3% 1.1% 0.5%
Power and Fuel 1.8% 1.6% 1.5% 1.4% 1.5% 1.5% 1.6% 1.4% 1.5% 0.0%
Other Mfr. Exp 4.0% 3.9% 4.0% 3.9% 3.9% 3.9% 3.9% 3.2% 3.1% 0.0%
Employee Cost 7.1% 7.1% 8.8% 8.5% 8.7% 8.6% 8.7% 9.1% 8.1% 8.1%
Selling and Admin Cost 9.5% 10.0% 10.9% 9.8% 9.1% 9.4% 9.1% 8.6% 8.0% 0.0%
Other Expenses 3.1% 2.6% 3.2% 2.7% 2.3% 2.2% 2.5% 2.2% 1.8% 14.8%
Operating Profit 36.4% 35.5% 36.1% 38.9% 42.8% 37.5% 36.3% 32.0% 31.7% 35.2%
Other Income 2.7% 3.2% 3.8% 4.1% 5.2% 4.3% 4.9% 5.2% 3.1% 2.9%
Depreciation 2.7% 2.6% 2.7% 2.7% 2.8% 2.9% 3.3% 3.3% 2.9% 2.6%
Interest 0.1% 0.2% 0.2% 0.1% 0.3% 0.1% 0.2% 0.1% 0.1% 0.1%
Profit Before Tax 37.0% 37.0% 37.9% 37.5% 40.1% 39.6% 40.6% 36.4% 34.2% 36.5%
Tax 11.5% 11.8% 13.7% 13.0% 13.6% 13.1% 9.0% 9.2% 8.6% 9.1%
Net Profit 25.2% 24.9% 23.8% 24.1% 25.9% 26.0% 31.0% 26.7% 25.1% 27.1%
Dividend Amount 13.5% 12.9% 17.5% 13.5% 14.5% 14.6% 25.3% 26.9% 23.4% 22.3%
77
Common Size Balance Sheet ITC LTD

Equity Share Capital 1.9% 1.7% 1.6% 2.2% 1.9% 1.7% 1.6% 1.7% 1.6% 1.4%
Reserves 64.7% 67.3% 81.1% 80.9% 79.8% 80.7% 82.8% 80.1% 79.3% 79.1%
Borrowings 0.6% 0.6% 0.2% 0.1% 0.1% 0.0% 0.4% 0.4% 0.3% 0.4%
Other Liabilities 32.7% 30.4% 17.2% 16.9% 18.2% 17.5% 15.2% 17.8% 18.8% 19.1%
Total Liabilities 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Net Block 31.6% 33.3% 29.2% 28.4% 25.7% 27.0% 28.1% 31.6% 31.4% 30.1%
Capital Work in
Progress 7.6% 5.9% 5.0% 6.7% 8.6% 5.8% 4.2% 5.4% 4.2% 3.5%
Investments 17.8% 15.1% 22.7% 31.5% 34.3% 34.9% 37.1% 33.7% 32.2% 34.3%
Other Assets 42.9% 45.7% 43.1% 33.4% 31.4% 32.3% 30.6% 29.3% 32.3% 32.2%
Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Receivables 6.0% 4.3% 3.7% 4.4% 4.2% 5.6% 3.3% 3.4% 3.2% 3.4%
Inventory 20.2% 18.7% 17.5% 14.5% 11.7% 11.0% 11.5% 14.1% 14.1% 13.7%
Cash & Bank 8.5% 17.2% 11.7% 5.3% 4.5% 5.8% 9.4% 6.3% 6.0% 5.7%
78
Financial Analysis
India Tobacco Company Limited
Weighted Average Cost of Capital

All figure are in INR unless stated otherwise
Peer comps
Debt/ Debt/ Levered Unlevered
Name of the Company Country Total Debt Total equity 1
Tax rate Equity Capital Beta 2 Beta 2
ITC India 284.06 549327.74 30.00% 0.05% 0.05% 0.62 0.62
Godfrey Phillips India 346.63 17222.99 30.00% 2.01% 1.97% 1.01 0.99
VST Industries India 0 6361.59 30.00% 0.00% 0.00% 0.54 0.54
Average 30.00% 0.69% 0.67% 0.72 0.72

Median 30.00% 0.05% 0.05% 0.62 0.62
Cost of Debt Cost of Equity

Pre Tax Cost of Debt 27.46% Risk Free Rate 7.19%
Tax Rate 30.00% Equity Risk Premium 8.42%
Post tax Cost of Debt 19.22% Levered Beta 0.62
Cost of equity 12.42%
Capital Structure Levered Beta

Comps Median Unlevered Beta 0.62
Current Target Target Debt/Equity 0.05%
Total Debt 284.06 0.05% 0.05% Tax Rate 30.00%
Market Capitalization 549327.74 99.95% 99.95% Levered Beta 0.62
Total Capital 549611.8 100.00% 100.00%
Weighted Average Cost of Capital
Debt / Equity 0.05% 0.05% Cost of Equity 12.42%
Equity Weight 99.95%
Cost of Debt 19.22%
1. Tax rate considered as Marginal Tax Rate for the Country Debt Weight 0.05%
2. Levered Beta is based on 2 year weekly data.
3. Unlevered Beta = Levered Beta/(1+(1-Tax Rate)*Debt/Equity) WACC 12.43%
4. levered Beta = UnLevered Beta*(1+(1-Tax Rate)*Debt/Equity) 79
ROIIC Profiling - ITC LTD
Net Income 8,990.6 9,765.6 9,500.9 10,477.2 11,492.7 12,835.9 15,592.8 13,382.9 15,503.1 19,427.7
Capital Employed 23,989.2 24,108.1 36,700.0 43,491.3 49,646.4 55,002.3 58,273.4 55,959.2 58,050.6 64,581.1
ROIIC Profiling
Cumulative Net Income 1,26,969.4
Incremental Capital Deployed 40,591.93
Net Income vs Capital Employed
Reinvestment Rate 31.97%
90,000
80,000
ROIIC 25.71% 70,000
Intrinsic Compounding Rate 8.22% 60,000
50,000
40,000
Stock Price (10 Year CAGR) 5.44%
30,000
Stock Price (5 Year CAGR) 8.86% 20,000
10,000
0
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
Net Income Capital Employed
80
Valuation - Discounted Cash Flow

ITC LTD
Key Assumptions FCF CAGR Trend
Years 1-5 6-10 9-Years 7-Years 5-Years 3-Years
FCF Growth Rate 12% 10% 2% -6% -15% -35%
Discount Rate 13%
Period (t) Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-29 Mar-30 Mar-31 Mar-32
Year 0 1 2 3 4 5 6 7 8 9 10
Free Cash Flow to Firm 8690.3 9733.1 10901.1 12209.3 13674.4 15315.3 16846.8 18531.5 20384.7 22423.1 24665.4
Discount rate (r) 13% 13% 13% 13% 13% 13% 13% 13% 13% 13%
PV of Cash Flows 8613.4 8537.2 8091.8 8386.7 8312.5 8091.8 7877.0 7667.9 7464.3 7266.2
Stage 1: Sum of Present Values 80308.9
Terminal Value Reverse DCF

Terminal Growth Rate 2% DCF Value 142499.7
10th Year FCF x (1+g) 25158.7 Current Market Cap 521542.9
Terminal value 228715.9 DCF as % of Mkt Cap 27%
Stage 2: PV of TV 67377.0
Enterprise Value (Stage 1 + 2) 147685.9
Net Debt (Latest Year)

Debt 306.0
Less: Cash -4880.2
Net Debt 5186.2
81
DCF Value (Equity Value) 142499.7
Reverse DCF
FCF CAGR Trend
DCF Value 142499.7
9-Years 7-Years 5-Years 3-Years
Current Market Cap 521542.9
2% -6% -15% -35%
DCF as % of Mkt Cap 27%
FCF CAGR Trend DCF Value Vs Market Cap

30%
0%
-30%
-60%
9-Years 7-Years 5-Years 3-Years DCF Value Current Market Cap
82
ITC
Industry
Overview
83
Tax per 2000 Cigarettes as a percentage of Per
FMCG Cigarettes Industry Overview Capita GDP
Post-COVID Recovery USA 0.46%

1. After two years of economic slowdown caused by the COVID-19 pandemic, the legal Japan 0.75%
cigarette industry has shown signs of recovery, largely due to the normalization of the
Germany 1.14%
operating environment. This recovery was facilitated by:
2. Stability in Taxes: The tax regime on cigarettes remained stable, avoiding further hikes China 1.14%
that could have discouraged legal sales. Russia 1.19%
3. Strict Enforcement Actions: Government and enforcement agencies cracked down on Canada 1.37%
illicit cigarette trade, helping legal products regain some market share.
Malaysia 2.03%
Market Dynamics in India
Thailand 2.10%
1. Diverse Tobacco Use: India has a wide range of tobacco products, including chewing
tobacco, bidi, gutkha, zarda, snuff, and cigarettes. Cigarettes, however, face heavy Pakistan 2.44%
taxation. UK 2.66%
2. Low Legal Cigarette Consumption: Despite being the second-largest consumer of Australia 3.01%
tobacco globally, legal cigarettes make up only 8% of India’s tobacco consumption
India 7.70%
compared to a global average of 90%.
3. Per Capita Consumption: India’s per capita cigarette consumption is among the
Source: Tax data-WHO Report on Global Tobacco Epidemic, 2021 Per capita
lowest worldwide, even lower than neighboring countries like Bangladesh and GDP- World Bank
Pakistan.
Impact of Taxation
1. High Tax Burden: Indian cigarettes are taxed significantly higher than in many
No. of Cigarettes per Annum
developed countries (e.g., 17 times higher than in the USA).
2. Shift to Illicit Products: High taxation has led consumers to switch to lightly taxed or 1971
untaxed forms of tobacco, such as illicit cigarettes and local tobacco products. This
shift has caused the share of legal cigarettes in total tobacco consumption to drop
from 21% in 1981-82 to just 8% today.
1133
3. Revenue Contribution: Despite low consumption, duty-paid cigarettes contribute
898 897
over 80% of the revenue from the tobacco sector due to high taxes.
Industry Challenges and Responses 468 394
1. Tax Increases and Industry Impact: Between FY 2012-13 and FY 2016-17, excise duty
on cigarettes increased at a compound annual growth rate (CAGR) of 15.7%, while 90
tax revenue grew by only 4.7% CAGR. The sharp 20% tax increase in FY 2017-18
further impacted the legal industry.
2. Clawing Back Volumes: Stability in taxation from FY 2017-18 until January 2020
allowed the legal industry to partially regain volumes lost to illicit trade, with a
revenue growth of 10.2% during this period. Source: The Tobacco Atlas- 7th Edition, 2022
84
FMCG-Others FMCG-Others Revenue(in Crs)
ITC's FMCG Business Performance
• Market Outperformance: ITC's FMCG businesses outperformed the industry in 19123
both urban and rural markets through an expanded distribution network,
15994
superior last-mile execution, deep consumer insights, and purposeful innovation. 14728
• Brand Portfolio: ITC's diverse portfolio of over 25 Indian brands, with an annual 12505 12844
consumer spend of nearly ₹29,000 crores, reaches over 230 million households. 10512
11329
These brands are largely built through organic growth, supporting domestic 9038
9731
8122
value chains, especially in agriculture. 7012
Focus Areas and Growth Strategies 3642

2511
Branded Packaged Foods:
• Health and Nutrition: Emphasis on meeting emerging consumer needs related to 109
health and nutrition. FY03 FY08 FY10 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
• Organic Growth: Building and improving own brands instead of acquisitions.
• Exports: Exporting to more than 60 countries, with plans to accelerate growth in
focus markets using core brands like Aashirvaad, Sunfeast, and Kitchens of
India.
Personal Care Products:
• Innovations: Introducing first-in-category innovations and focusing on future-
oriented categories.
• Product Quality: Enhancing product quality to improve consumer experience.
• Strategic Focus: Strengthening core categories such as Personal Wash and
Fragrance, backed by robust science-based claims from ITC's R&D facility.
Economic Context and Industry Response
• Inflation and Demand Slowdown: The FMCG sector faced challenges from rising
inflation and slowing consumption demand, particularly in rural markets and
discretionary urban categories. Input costs remained high, despite some moderation
in commodity prices towards the end of the year.
• Margin Pressure: The first half of the year saw significant price increases for key
inputs such as edible oils, packaging materials, fuel, and logistics, which pressured
margins.
85
86
FMCG- Others- Personal Care Products
ITC’s Personal Care Products Business continued to strengthen its core strategic levers of building brands with purpose
by introducing first-in-category innovations and focusing on categories of the future. Inflationary pressure on prices of
key inputs witnessed in the previous year continued to impact the industry for most of the financial year. This
increase in inflation also led to demand decreasing especially in rural markets however now improvement is being
witnessed in this segment. The state-of-the-art R&D facility of ITC continued to develop innovative and differentiated
products backed by robust science-based claims to meet the emerging consumer needs. ITC’s strategic focus continues
to be on increasing the core categories of Personal Wash, Fragrance and other innovative consumer centric products.
It’s also focusing on improving the quality of these products so that it can enhance consumer experience. ITC with its
future-ready portfolio, purpose-led brands and their commitment towards improving product quality and consumer
experience, all this can help them achieve greater success in this segment and emerge as a significant player in the
‘Personal Care’ space.
87
88
HOTELS
Travel & Tourism Industry Recovery: Luxury: ITC Hotels
• Global Impact: The global Travel & Tourism industry faced severe
impacts due to the pandemic but is now seeing strong recovery. Premium: Welcomhotel
• Economic Contribution: In 2022, the sector is expected to Mid-market to Upscale: Fortune
contribute US$ 8.6 trillion to the global economy, about 94% of pre-
pandemic levels.
Leisure & Heritage: WelcomHeritage
• Job Recovery: After losing 62 million jobs in 2020, the sector has added
40 million jobs in 2022, following 18 million in 2021.
Importance in India:
• Economic Significance: The sector contributes approximately 7% to
India's GDP.
• Tourism :Value Chain Includes hotels, travel agents, airlines, tour
operators, restaurants, tourist transporters, and guides, creating a
significant economic multiplier effect.
ITC's Hotels Business Performance:

• Revenue Growth: Segment revenue doubled to ₹2585.03 crores in the
current year.
Hotels – Q4 FY23
• EBITDA: Segment EBITDA increased to ₹831.62 crores, up from ₹78.03
crores the previous year. Growth Drivers:
• Strategy: Focused on offering services across accommodation, dining, and RevPAR(Revenue per Available Room) well ahead of pre-
banqueting to enhance revenue. pandemic levels. Weddings, Leisure and
• Introduced special packages for short getaways/staycations. MICE(Meetings,Incentives,Conferences and Exhibitions) drive
• Revamped packages for MICE (Meetings, Incentives, Conferences, growth.
and Exhibitions) and wedding segments. Margins:
• Extended exclusive privileges to Club ITC Loyalty members. Segment EBITDA margin at 34.8% (Q4 FY20: 23.1%), Margin
expansion driven by higher RevPAR, operating leverage and
Asset-Right Strategy: Continues to be the fastest growing structural cost interventions.
hospitality chain in India with over 120 properties and 11,500 Expansion:
rooms across various brands: ITC has a portfolio of 131 hotels and 12,000 rooms across 80
destinations and aims to reach 200 hotels and 18,000 keys in
the next five years. 89
Paperboards, Paper & Packaging – Q4 FY23
PAPERBOARDS, PAPER AND PACKAGING
Performance:
ITC Paper & Paperboards Market in FY22-23: Paperboards, Paper & Packaging Segment posted resilient
• Growth: Demand grew by 6-7%.
performance. Softening of pulp prices, muted demand in
• Input Costs:
global markets impacted segment revenue leading to
• High Costs: Increased global pulp prices, geopolitical
under-satisfactory growth in segment revenue.
tensions, adverse weather events, higher power and
chemical costs. Growth:
• Pulp Prices: Normalized in the second half due to Robust growth in Fine Paper segment driven by strong
subdued Chinese demand, recessionary conditions in demand for notebooks and publications, Rapid scale up in
Europe, and supply chain stabilization. Sustainable Products portfolio and Strategic interventions
• Chemical Prices: Moderated towards the end of the year (in house pulp manufacturing, pro-active capacity
but remained above pre-pandemic levels. expansion in value-added products,
• Coal Supplies: Impacted by supply chain disruptions and Digital) continue to be leveraged.
prioritization of domestic supplies to thermal power Expansion:
plants. Second Carton line commissioned at Nadiad, Gujarat and
• Currency Impact: Depreciation of the Indian Rupee capacity utilization is also being ramped up.
against the US Dollar increased import costs.
ITC's Response and Market Position:

• Innovation: Strengthened leadership in the Value
Added Paperboard (VAP) segment with a focus
on customized solutions and top-tier customer
service.
• Eco-friendly Leadership: Leading position in eco-
labelled products and premium recycled
paperboards.
90
ITC
Overview on
Financials
91
Commentary
Revenue
Despite facing difficulties in the economic and operational
environment, the company managed to perform well in Sales & Sales Growth
the quarter. Its gross revenue for Q4FY23 reached Rs. 90000.00 25.0%
17,224 crores, growing by 6.1% compared to previous 80000.00
70000.00 20.0%
year quarter(Q4FY22), and its annual revenue for FY23
60000.00 15.0%
stood at Rs. 69481 crores, increasing by 17.6% % 50000.00
compared to FY22. With a focus on consumer needs, 40000.00 10.0%
innovation, agility, and execution excellence, the company 30000.00
5.0%
aims to overcome short- term challenges and continue 20000.00
creating value for its stakeholders. Despite the pandemic, 10000.00 0.0%
0.00 FY22 FY23 FY24E FY25E
inflation, and taxation issues, ITC has maintained a
revenue compound annual growth rate (CAGR) of 10% Net Revenues Sales Growth
and a profit after tax (PAT) CAGR of 11.1% from FY18 to
FY23.
ITC LTD
Sales 35,306 38,817 39,192 42,768 43,449 48,340 49,388 49,257 60,645 70,937
% Growth YOY 10% 1% 9% 2% 11% 2% 0% 23% 17%

92
Ebitda
EBITDA & EBITDA Margins
ITC is working hard to improve its business by focusing on 35000.00 38.0%
innovation, making its main products stronger, and 30000.00

37.0%
expanding into related categories. They're also launching 25000.00
36.0%
new products with extra value, reaching out to new 20000.00
markets, and looking for opportunities to grow through 15000.00 35.0%
partnerships or acquisitions. The management team 10000.00

34.0%
predicts that they will increase their profits each year by
5000.00 33.0%
improving their EBITDA margin by 80-100 basis points (bps).
0.00
They plan to achieve this by making their products more 32.0%
FY22 FY23 FY24E FY25E
premium, expanding into new areas, and cutting costs
EBITDA Margin
wherever possible. EBITDA
ITC LTD
EBITDA 13,080 14,252 14,531 15,470 16,521 18,537 19,344 17,065 20,623 25,665
EBITDA Margins 37% 37% 37% 36% 38% 38% 39% 35% 34% 36%
93
Inventory INVENTORY
Inventory days reduced slightly in FY23( 148 80000 200

70000 180
compared to 150 in FY22 but reduced substantially 60000 160
compared to FY19 which stood at 165). The 50000
140
120
median inventory days of peers stand at 190( 40000 100
Peers taken are Godfrey Phillips, VST Industries 30000 80
20000 60
and NTC Industries). Reducing inventory days is a 40
10000
good sign and it shows efficient inventory 0
20
0
management.
FY19 FY20 FY21 FY22 FY23
Sales Inventory Inventory Days
Efficiency Ratios Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Inventory Days 80.74 84.40 69.27 62.96 59.35 65.62 77.04 65.39 60.58 72.88
Inventory Turnover 4.52 4.32 5.27 5.80 6.15 5.56 4.74 5.58 6.02 5.01
ITC's inventory management practices are characterized by strategic foresight, technological integration, and a
strong commitment to sustainability. By focusing on these areas, ITC not only enhances its operational
efficiency but also reinforces its position as a responsible and forward-thinking enterprise. The company's
proactive approach to managing inventory amidst global challenges highlights its resilience and adaptability in
an ever-evolving market landscape.
94
Key Points on ITC's Trade Receivables in FY23:
Receivables Increase:
Trade receivables rose by 20% in FY23, reaching ₹2956 crores, up
from ₹2462 crores in FY22.
Receivable Days:
• The receivable days remained constant at 15 days for both
FY23 and FY22.
• This is in line with the median receivable days of peers such
as Godfrey Phillips, VST Industries, and NTC Industries.
Credit Policies:
• Credit is extended based on established guidelines and
policies, with exceptions reviewed on a case-by-case basis.
• Credit risk is generally low due to these stringent credit
controls.
ITC's effective management of trade receivables, with consistent
receivable days and a strong customer base, reflects robust
financial health and risk management practices. The increase in
trade receivables aligns with business growth, while stringent
credit policies and low overdue balances underscore the
company's solid credit control mechanisms.
95
Key Points on ITC's Trade Payables in FY23:
ITC's trade payables in FY23 stood at ₹1,457 crores, reflecting a
modest increase compared to the previous fiscal year.
Management Strategy:
ITC maintained a disciplined approach in managing its payables,
ensuring timely payments to suppliers while optimizing working
capital. The company focused on leveraging its strong balance
sheet to negotiate favorable terms with suppliers.
Supply Chain Efficiency:
Despite global supply chain disruptions, ITC managed to keep its
supply chain operations efficient. The company's robust supply
chain management practices helped mitigate the impact of
increased costs and delays.
Cost Pressures:
During FY23, ITC faced increased input costs due to higher global
pulp prices, geopolitical tensions, and elevated power and
chemical costs. The company navigated these pressures by
enhancing operational efficiencies and strategic sourcing.
Future Outlook:
Looking ahead, ITC aims to further strengthen its supplier
partnerships and enhance supply chain resilience to adapt to
evolving market conditions and continue delivering value to
stakeholders.
96
ITC
DuPont
Analysis
97
Dupont Analysis – Financial Summary
Dupont Analysis
DuPont Analysis is a framework used to decompose a company's return on equity (ROE) into three
components: profit margin, asset turnover, and financial leverage, providing a detailed understanding of the
factors driving ROE. This method helps in pinpointing areas of strength and weakness in a company's financial
performance
Return on Equity (ROE)
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 10,289.40 11,271.20 12,592.30 15,306.20 13,161.20 15,242.70 19,191.70
Average Shareholder Equity 44,546.20 49,461.50 55,825.50 62,207.10 62,810.30 61,401.50 65,805.40
Return on Equity 23.10% 22.79% 22.56% 24.61% 20.95% 24.82% 29.16%
ROE - Dupont Equation

Net Profit 10,289.40 11,271.20 12,592.30 15,306.20 13,161.20 15,242.70 19,191.70
Revenue 42,767.60 43,448.90 48,339.60 49,387.70 49,257.50 60,644.50 70,919.00
Net Profit Margin (A) 24.06% 25.94% 26.05% 30.99% 26.72% 25.13% 27.06%
Revenue 42,767.60 43,448.90 48,339.60 49,387.70 49,257.50 60,644.50 70,919.00
Average Total Asset 53,774.80 60,069.60 67,990.00 74,524.90 75,535.80 75,478.40 81,513.50
Asset Turnover Ratio (B) 0.8x 0.7x 0.7x 0.7x 0.7x 0.8x 0.9x
Average Shareholder Equity 44,546.20 49,461.50 55,825.50 62,207.10 62,810.30 61,401.50 65,805.40
Equity Multiplier (C) 1.21x 1.21x 1.22x 1.20x 1.20x 1.23x 1.24x
Return on Equity (A*B*C) 23.10% 22.79% 22.56% 24.61% 20.95% 24.82% 29.16%
98
Dupont Analysis
Return on Asset
Net Profit 10,289.40 11,271.20 12,592.30 15,306.20 13,161.20 15,242.70 19,191.70

Return on Asset 19.13% 18.76% 18.52% 20.54% 17.42% 20.19% 23.54%
ROA - Dupont Equation

Net Profit 10,289.40 11,271.20 12,592.30 15,306.20 13,161.20 15,242.70 19,191.70

Revenue 42,767.60 43,448.90 48,339.60 49,387.70 49,257.50 60,644.50 70,919.00
Net Profit Margin (A) 24.06% 25.94% 26.05% 30.99% 26.72% 25.13% 27.06%
Revenue 42,767.60 43,448.90 48,339.60 49,387.70 49,257.50 60,644.50 70,919.00
Asset Turnover Ratio (B) 0.8x 0.7x 0.7x 0.7x 0.7x 0.8x 0.9x
Return on Asset (A*B) 19.13% 18.76% 18.52% 20.54% 17.42% 20.19% 23.54%
99
100
Du-Pont Summary
• ROE of ITC Ltd decreased to 20.95% during COVID in FY20 but it didn’t stay there for
long as it
increased to 29.16% in FY23. The ROE increased from 23.10% in FY17 to 29.16% in
FY23.
• The Net Profit Margin increased from 24.16% in FY17 to 29.16% in FY23. The Asset
Turnover ratio was constant throughout the period whereas Financial Leverage
increased slightly from 1.21x in FY17 to
1.24x in FY23.
• ROA of ITC Ltd has increased from 19.13% in FY17 to 23.54% in FY23. The reason for
increase in ROA is increased Net Profit Margins of the company, the slight decrease
in ROA in 2021 is due to company’s Net Profit margins taking a hit in FY21 as they
reduced from 30.99% in FY20 to 26.72% in FY21.
101
ITC
Peer
Comparison
102
Peer Comparison
ITC Ltd, a major player in the FMCG and tobacco sector, has several notable peers in the market. Key
competitors include Godfrey Phillips India Ltd, VST Industries Ltd, and NTC Industries Ltd. Here’s a
detailed comparison based on various financial metrics:
Market Capitalization and Stock Performance:
• ITC Ltd: With a market cap of around ₹5.43 trillion (approximately $65.19 billion), ITC is one of the largest
companies in its sector. Its stock price is roughly ₹436 as of May 2024.
• Godfrey Phillips India Ltd: This company has a smaller market presence compared to ITC.
• VST Industries Ltd: The stock is priced at around ₹6,191, showing a high market valuation relative to its size
Valuation Metrics:
• Price-to-Earnings (P/E) Ratio: ITC's P/E ratio stands at 26.47, indicating it is moderately valued in comparison
to its peers.
• Price-to-Book (P/B) Ratio: ITC's P/B ratio is 7.84, higher than VST Industries (5.32) and Godfrey Phillips
(5.75), suggesting that ITC is more highly valued in terms of its book value.
• Dividend Yield: ITC offers a 3.15% dividend yield, which is competitive compared to Godfrey Phillips at
1.12% and VST Industries at 3.69%
Profitability and Growth:
• ITC is noted for its strong profitability metrics, performing well in terms of profit margins and
return on equity.
• Growth metrics, however, indicate that ITC is lagging behind the market average in financial
growth, which could be a concern for long-term investors
103
Peer Comparison
Peer Stock Performance(1YR)-Indexed
104
Peer Comparison
Peers Financial Performance
S.No. Name CMP MKTCAP(in Crs) P/E PEG EV / EBITDA Debt Int Coverage ROCE % ROE %
1ITC 429.15 535781.77 26.17 2.24 18.36 284.06 595.11 39.01 29.09
2Godfrey Phillips 3086.55 16048.18 19.66 0.52 15.61 346.63 31.8 21.51 18.17
3VST Industries 3573.15 5516.95 19.54 1.55 13.53 0 0 38.05 29.01
4NTC Industries 108.55 129.65 27.65 6.73 9.8 6.33 18.11 10.03 7.35
Sector Performance:
Within the tobacco and FMCG sector, ITC holds a significant market share and enjoys strong
brand recognition, especially in India. The comparison against peers shows ITC's dominance
but also highlights areas where it could improve, particularly in growth metrics.
105
FMCG/Alco Bev & QSR
HSIE Research is also available on Bloomberg
Challenging demand environment

 Demand environment continues to remain challenging: FMCG demand sentiment has stayed
consistent during the quarter, largely mirroring trends seen in Q3FY24. While urban markets continue
to outgrow rural markets, price rollbacks on softening commodity inflation have aided the narrowing
of the gap. Nonetheless, we expect a gradual recovery in CY2024, led by (1) moderating inflation; (2)
government spending; (3) a positive outlook for rabi crop harvest; (4) conducive consumer pricing
across categories; and (5) expectation of normal monsoon. Although international geographies are
expected to report healthy CC growth, INR growth will be impacted on account of currency
depreciation. Against this backdrop, we expect our FMCG coverage universe to deliver 3% YoY growth
(8% five-year CAGR) in revenue in Q4FY24. Within QSR, sustained softness in consumption trends will
keep key growth metrics (SSSG, ADS, etc.) under pressure. We expect our QSR coverage universe to
report 16% YoY growth in revenues (primarily driven by store addition and KFC Thailand
consolidation in Devyani). Radico is expected to deliver double-digit YoY growth.
 FMCG to report stable margin print; QSR margins to remain under pressure: With softening
commodity inflation, we expect gross margins to improve across our coverage universe. Within the
FMCG universe, EBITDAM expansion will be limited given passing on RM benefits to consumers
(price cuts and promotions), higher A&P spending and category-led investments. We expect our FMCG
universe to deliver 5/7% YoY EBITDA growth. Within QSR, we expect pressure on RoM and EBITDAM
will sustain, given the weakness in SSSG leading to negative op-lev. We expect our QSR universe to
report a 14% YoY growth in EBITDA. 106
ITC
Business
Segment
Financial
Overview
107
Business-wise commentary
Cigarettes: Net revenue grew 8.1%, on back of ~2% volume growth :(2 year
CAGR +13.5%)
Cigarettes Segment witnesses consolidation of volumes on a high base
after a period of sustained growth momentum
The business continues to counter illicit trade and growth was led by
portfolio innovation, premiumisation and enhancing product availability
backed by superior onground execution
Several differentiated variants launched recently continue to perform well
Sharp escalation in costs of leaf tobacco and certain other inputs largely
mitigated through improved mix, strategic cost management and
calibrated pricing
Recent product introductions like 'Classic Alphatec', 'Classic Icon',
and 'GoldFlake Indie Mint' bolstered the portfolio
Stability in taxes helped the legal industry regain some lost ground to illicit
trade, benefiting both domestic demand and tax revenue
Segment EBIT margins 62.1% (-162bp) due to higher inflation in leaf
tobacco and packaging material
108
109
110
FMCG: Revenue up 7.2% YoY led by staples Atta, Spices, Personal Wash and Agarbatti
Packaged Foods Business – Staples led by strong growth in Aashirvaad, Sunfeast
Biscuits & Cakes, YiPPee Noodles and Bingo Snacks portfolio
Under FMCG portfolio expanded with new offerings such as 'Atta with Millets' and
various millet-based and organic products. Aashirvaad Besan' and 'Aashirvaad Salt’
also saw strong growth, while 'Sunrise' spices gained ground in key markets
'Sunfeast' biscuits maintained resilience, introducing new variants like 'Bounce Day &
Night' and 'All Rounder Sweet and Salt’
Personal Care Products – Fiama’ registered strong growth towards premium
offerings, Engage portfolio has witnessed encouraging response
Frozen Foods Business, 'ITC Master Chef' and 'Farmland' brands, grew with
innovative products like 'Paneer Pakoda' and 'Crispy Onion Rings' in Retail and Food
Service channels
A new manufacturing unit in Uluberia, West Bengal, will soon be operational to meet
growing demand in East markets, reduce distance to market, improve supply chain
agility, and optimize costs
Education & Stationery Products – ‘Classmate’ Notebooks fortified its leadership
position, delivering a superior performance driven by premiumisation, judicious
pricing, exports and institutional strengths
Segment EBITDA margins margin sustained at 11.2% (+94bp) where EBIT margin at
9.0% (-114bp)
111
112
113
Hotels: Revenues up 14.9% despite higher base, on the back of

higher Rev Pars and operating leverage
Strong growth was witnessed in ARRs across properties, though
Occupancy remained flattish on a high base due to relatively
fewer wedding dates during the quarter
ITC Limited’s wholly owned subsidiary WelcomHotels Lanka
(Private) Limited has launched ITC Ratnadipa, a 352-room Hotel,
in Colombo in April’24
Renovations across properties timed strategically for high
season. Welcomhotel Chennai reopened Jan 2024 after
comprehensive revamp, boasting signature dining, upgraded
rooms, and banquet facilities
EBITDA margin at 35.1% (+295bp) led by operating leverage
along with high RevPAR, EBIT margin stood at 29.7% (+421bp)
114
115
Agri Business: Segment revenue declined by 13.4% YoY while

Strategic portfolio (value added agri products) and leaf tobacco
revenues up 18%
Leveraging strong customer relations & agile execution and
new state-of- the-art valueadded Spices processing facility
in Guntur
Geopolitical tensions and climate emergencies are fuelling
food security concerns. Government trade restrictions
on agricultural commodities are limiting business
opportunities
Stock limits on wheat, ban on non-basmati rice exports
and export duty on parboiled rice, limited business
opportunities for the Agri Business
The business strengthened its position as a leading global
supply chain partner through crop development
expertise, sustainable practices, and increased engagement
with international buyers for Indian Burley tobacco
Business expands wheat and spice sourcing for Aashirvaad
atta and Sunrise brands, while enhancing milk
procurement for Aashirvaad Svasti and Sunfeast Dairy
Beverages.
116
117
Margin EBIIT MARGIN EBIT GROWTH

Cigarettes: 62.1% 5.0%
FMCG 9.0% 4.0%
Hotel 29.7% 33.8%
Agri 6.5% 34.0%
Paper 14.2% -34.1%
Considering PLI benefit in the base FMCG EBIT has grown double digit
Overall gross Margins jumped to 59.4% (159bp) YoY, given muted RM/PM
prices, cost saving initiative and efficient supply chain management
EBITDA grew 0.9% to Rs.59.8bn, despite higher other exp./ employee
+11.8%/8.4% respectively, resulting in EBITDA margin at 36.5% (-30bp) YoY
APAT increased by 0.2% to Rs50.2bn on the back of rise in other income by
7.0%
ITC Infotech – Revenue stood at Rs 993 Cr (up 13% YoY). For FY24 revenue stood
at Rs 3730 Cr, up 12% YoY. Q4FY24 EBITDA stood at Rs 217 Cr, up 37% YoY, while
for full year the EBITDA stoodat Rs 691 Cr, up 19% YoY.
118
ITC
Business
Suggestions/
Recommendation
119
Suggestions/Recommendation
Strategic Recommendations for ITC Ltd.

Enhance FMCG Segment Expansion:
ITC Ltd's FMCG segment, particularly branded packaged foods and personal care products, has
shown robust growth, contributing significantly to overall revenue. To capitalize on this
momentum, ITC should continue to expand its product lines within the FMCG sector. This can be
achieved through:
• Product Innovation: Developing new products that align with current consumer trends, such
as health and wellness, organic, and sustainable products. For example, launching more
products under the health and nutrition category, given the increasing consumer shift
towards healthier lifestyles.
• Market Penetration: Increasing market penetration in both urban and rural areas by
leveraging ITC's extensive distribution network. Enhanced market research to understand
regional preferences can help tailor products to meet local demands effectively.
• Brand Building: Investing in strong marketing campaigns to build brand equity and loyalty.
This involves both traditional media and digital platforms to reach a wider audience.
• Strategic Acquisitions: Acquiring smaller FMCG companies that align with ITC’s strategic
objectives can provide immediate market share gains and expand product offerings.
120

Accelerate Digital Transformation:
ITC has already made strides in digital transformation across its operations, but there is
potential to go further:
• Supply Chain Digitization: Implementing advanced technologies like AI and IoT in

supply chain management to enhance efficiency and reduce costs. This includes
smart warehousing, predictive analytics for inventory management, and real-time
tracking of shipments.
• E-Commerce Expansion: Strengthening ITC’s presence in the e-commerce space,

especially with the rise in online shopping post-pandemic. Collaborations with major
e-commerce platforms and developing a robust direct-to-consumer (DTC) platform
can drive significant growth.
• Consumer Engagement: Utilizing data analytics to gain insights into consumer

behavior and preferences. This data can inform personalized marketing strategies,
improving customer retention and acquisition.
121

Strengthen Sustainability Initiatives:
ITC’s commitment to sustainability is a significant differentiator in the market. Enhancing
these initiatives can build brand loyalty and meet increasing regulatory and consumer
demands for environmentally responsible practices:
• Sustainable Packaging: Increasing the use of biodegradable and recyclable materials in

packaging. This not only aligns with global sustainability trends but also reduces
environmental impact.
• Renewable Energy: Expanding the use of renewable energy sources in manufacturing

processes. ITC has already made strides in this area, but there is room to further increase
the percentage of energy sourced from renewables.
• Water Management: Implementing advanced water conservation techniques across its

operations, particularly in water-scarce regions. This can include rainwater harvesting and
wastewater recycling.
122

Optimize Agri-Business Synergies:
ITC’s strong presence in the agri-business sector provides a unique opportunity to optimize
synergies between agriculture and FMCG segments:
• Integrated Supply Chain: Creating a more integrated supply chain where raw materials
sourced from ITC’s agri-business are directly utilized in its FMCG production. This reduces
dependency on external suppliers and can improve margin control.
• Farmer Engagement: Strengthening partnerships with farmers through initiatives that

provide them with better resources, training, and technology. This can improve the quality
and reliability of raw materials while fostering goodwill and loyalty among the farming
community.
• Value-Added Products: Expanding into value-added agricultural products that can be

marketed under ITC’s FMCG brands. For instance, promoting organic produce or specialty
grains through existing FMCG distribution channels.
123

Diversify Revenue Streams:
While the tobacco business remains a major profit driver, ITC must continue to diversify its
revenue streams to mitigate risks associated with regulatory changes and market volatility:
• Non-Tobacco FMCG: Focusing on scaling the non-tobacco FMCG business to reduce
dependency on tobacco revenues. This includes aggressive marketing and innovation in
personal care, packaged foods, and health products.
• Health and Wellness Products: With an increasing consumer focus on health, ITC can expand
its portfolio of health and wellness products. This includes launching new products in
categories like organic foods, gluten-free options, and fortified foods. ITC can leverage its
strong brand presence to introduce these products effectively.
• Hospitality and Real Estate: Expanding ITC's footprint in the hospitality sector by leveraging
its 'Responsible Luxury' brand. Additionally, exploring opportunities in the real estate market
can provide new revenue streams.
• Ready-to-Eat and Convenience Foods: The market for ready-to-eat meals and convenience
foods is growing rapidly, driven by busy lifestyles. ITC can introduce a variety of products in
this category, leveraging its expertise in packaged foods.
124

Diversify Revenue Streams:
Expansion of Agri-Business:
ITC’s agri-business segment has significant growth potential. Diversifying within this sector can
lead to increased revenue:
• Value-Added Products: Developing value-added agricultural products, such as processed

foods, organic produce, and specialty grains. This can be marketed under ITC’s existing
FMCG brands.
• Export Opportunities: Expanding the export of agricultural products to international

markets. This includes leveraging global demand for high-quality Indian agricultural products
and entering new geographies.
• Agri-Tech Solutions: Investing in agri-tech solutions to improve productivity and

sustainability. This can include precision farming, smart irrigation systems, and sustainable
agricultural practices.
125

Information Technology Services:
ITC can diversify into the information technology services sector. Given the growing demand
for digital transformation across industries, ITC can leverage its expertise to offer:
• IT Consulting: Providing IT consulting services to help businesses navigate digital

transformation. This includes cloud computing, cybersecurity, and data analytics services.
• Software Development: Developing custom software solutions for various industries,

including retail, manufacturing, and healthcare.
• Digital Marketing Services: Offering digital marketing services, including social media
management, search engine optimization (SEO), and online advertising.
126

Expand International Market Presence:
Exploring and expanding into international markets can provide significant growth
opportunities:
• Global Branding: Developing a strong global brand presence for ITC’s FMCG products,
particularly in regions with a high demand for Indian products. This includes targeted
marketing campaigns and participation in international trade fairs.
• Strategic Partnerships: Forming strategic alliances with international distributors and

retailers to penetrate new markets efficiently.
• Localization: Adapting products to meet the tastes and regulatory requirements of different
regions. This might involve product reformulation, packaging changes, and localized
marketing strategies.
127

Invest in Research and Development:
Continuing to invest in R&D is crucial for maintaining competitiveness and fostering innovation:
• Product Innovation: Focusing on cutting-edge R&D to develop new products that cater to
emerging consumer needs and preferences. This includes investment in health and wellness,
convenience foods, and sustainable products.
• Process Innovation: Implementing innovative manufacturing processes that increase
efficiency, reduce costs, and minimize environmental impact.
• Collaborations with Institutions: Partnering with academic and research institutions to
leverage external expertise and accelerate innovation.
128

Enhance Financial Management:
Strong financial management is key to sustaining growth and profitability:
• Cost Optimization: Continuously seeking ways to optimize costs across operations without
compromising on quality. This can involve renegotiating supplier contracts, improving energy
efficiency, and reducing waste.
• Capital Allocation: Prudent capital allocation to ensure funds are invested in high-return
projects. This involves a careful evaluation of potential investments in new products,
technologies, and market expansions.
• Debt Management: Maintaining a healthy balance sheet by managing debt levels prudently.
This includes taking advantage of favorable interest rates and ensuring sufficient liquidity to
meet operational and strategic needs.
129
BIBLIOGRAPHY:
Bibliography
1.ITC Limited. (2023). Annual Report 2022-2023. ITC Limited. Retrieved from
https://www.itcportal.com
2.ITC Limited. (2023). Sustainability Report 2022-2023. ITC Limited. Retrieved
from https://www.itcportal.com
3.Reuters. (2023). ITC Ltd (ITC.NS) Company Profile. Reuters. Retrieved from
https://www.reuters.com
4.Moneycontrol. (2023). ITC Ltd Financials. Moneycontrol. Retrieved from
https://www.moneycontrol.com
5.Bloomberg. (2023). ITC Limited: Company Analysis. Bloomberg. Retrieved from
https://www.bloomberg.com
6.Economic Times. (2023). Corporate Governance at ITC: Overview and
Practices. The Economic Times. Retrieved from
https://economictimes.indiatimes.com
7.Financial institutions and Markets - NMIMS Centre for Distance and Online
Education
8.Strategic Financial Management- NMIMS Centre for Distance and Online Education
130

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Project Report

Comprehensive analysis of ITC Ltd.

Submitted for partial fulfillment of requirement for the award of

Master of Business Administration (Financial Management)

About The Company

ITC continues to focus on sustainability and responsible business practices by setting

ITC’s diversified portfolio of future-ready businesses, spanning FMCG, Paperboards &

Sustainability and Innovation

ITC FMCG Business

Key Highlights: ITC FMCG Business

ITC FMCG Business

2. Sustainability Initiatives: The company emphasized its commitment to sustainability, with

ITC FMCG Business

Personal Care Products:

Education and Stationery:

Matches and Agarbattis (Incense Sticks):

ITC AGRI Business

ITC AGRI Business

ITC Paperboards & Packaging Businesses

No. 1 in Revenue and Profitability

ITC Paperboards & Packaging Businesses

Highlights and Products of ITC's Paperboards and Packaging Business

Environmental Stewardship: ITC's commitment to environmental sustainability includes significant efforts

ITC Paperboards & Packaging Businesses

• FiloBev: Designed for beverage cups.

With ‘Namaste’ as the enduring symbol of its brand

ITC Hotels Business Highlights and

• Pre-eminent Hotel Chain in India with

Investment in New Properties:

Corporate Governance Philosophy of ITC Limited

ITC, a diversified conglomerate in India, emphasizes transparency and

Shilabhadra Banerjee Hemant Bhargava Alka Marezban Bharucha

Arun Duggal Mukesh Gupta Rahul Jain

Nirupama Rao Atul Singh Pushpa Subrahmanyam

Contribution of ITC Limited's Board Members to Fiduciary Duties

Insights on Board Members as ‘Trustees of Social Wealth’

 Long-Term Vision: By focusing on sustainability and responsible business practices, the

 Balanced Decision-Making: The presence of independent directors ensures that decisions

ITC Limited's corporate governance framework is

Sr. no. Name Designation Education Background Comments

Sr. no. Name Designation Education Background Comments

Sr. no. Name Designation Education Background Comments

Innovation and Customer Focus:

Common Size P&L ITC LTD

Common Size Balance Sheet ITC LTD

Weighted Average Cost of Capital

Average 30.00% 0.69% 0.67% 0.72 0.72

Cost of Debt Cost of Equity

Capital Structure Levered Beta

ROIIC Profiling - ITC LTD

Net Income Capital Employed

Valuation - Discounted Cash Flow

Stage 1: Sum of Present Values 80308.9

Terminal Value Reverse DCF

Enterprise Value (Stage 1 + 2) 147685.9

Net Debt (Latest Year)

FCF CAGR Trend DCF Value Vs Market Cap

Post-COVID Recovery USA 0.46%

Focus Areas and Growth Strategies 3642

ITC's Hotels Business Performance: