Consumer spending on ITCs' goods rises 12% to Rs 32,500 crore in FY24

Diversified conglomerate ITC has said consumer spending on the company's FMCG products has increased 12 per cent to nearly Rs 32,500 crore in FY24 with over 25 crore households having access to its various brands.

ITC measures annual consumer spending as the sum total of what consumer spends on buying goods of the company. It is the net sales turnover of the brands along with channel margins and taxes.

The FMCG portfolio of over 25 world-class Indian brands, largely built through an organic growth strategy leveraging institutional synergies in a relatively short period of time, "represents an annual consumer spend of nearly Rs 32,500 crore and reach over 250 million households in India", the company said in its annual report for 2023-24.

This is 12 per cent higher than the numbers achieved in financial year 2022-23, when it had reported an annual consumer spend of nearly Rs 29,000 crore.

The company's reach has also expanded to 25 crore households from 23 crore a year ago.

The FMCG (fast moving consumer goods) businesses comprising branded packaged foods, personal care products, education and stationery items, incense sticks (agarbattis) and safety matches have grown at an impressive pace over the past several years, it said.

Some of its brands as Aashirvaad leads in branded atta segment. Similar Bingo leads in the bridges segment of snack foods, Sunfeast also leads in the cream biscuits segment.

In notebooks segment, its brand Classmate leads, while YiPPee, Fiama and Mangaldeep are the second players in noodles, body wash and agarbattis, respectively.

About the overall consumption demand, ITC said it remained "subdued" during the year, especially in rural markets and in the value segments.

This was "amidst a challenging macroeconomic and operating environment and on the back of significant inflationary pressures in the previous year, consumption demand", it said, adding overall, input costs remained elevated compared to pre-pandemic levels with several commodities witnessing sequential uptick in prices, while certain commodities witnessed moderation in prices on a high base.

"Notwithstanding the challenging conditions and heightened competitive intensity, your company's FMCG businesses grew ahead of the industry in both urban and rural markets driven by deep consumer insights, purposeful innovation, portfolio premiumisation, strategic portfolio augmentation, sharp execution of channel-specific business plans, enhanced distribution footprint and superior last mile execution," it said.

FMCG businesses recorded a segment revenue of Rs 20,966.83 crore, representing an increase of 9.6 per cent over the previous year.

While, segment EBITDA for the year ended on March 31, 2024 registered a growth of 19.7 per cent to Rs 2,338.50 crore with margins improving by 94 basis points on the back of premiumisation, supply chain efficiency, agile cost management and judicious pricing actions in spite of the gestation costs of new initiatives.

The Kolkata-headquartered company remains confident of rapidly scaling up its FMCG businesses on the back of a strong future-ready portfolio powered by purpose-led brands, quality, deep consumer insights, innovation and a resilient and efficient supply chain.

"The businesses will continue to leverage your company's institutional strengths viz. Strong backward linkages with the agri business, deep and wide multi-channel distribution network, cuisine knowledge resident in the hotels business, industry-leading packaging knowhow and access to robust R&D platforms nurtured by LSTC (Life Sciences and Technology Centre)," it said.

For the financial year 2023-24, ITC's gross revenue stood at Rs 69,446 crore.