Buyback, restructuring options to be considered at right time: ITC’s Sanjiv Puri

Sanjiv Puri, Chairman and Managing Director of ITC said he was surprised by the stock price underperformance, given the company’s strong balance sheet and robust cash flows. In an interview with CNBC-TV18, Puri pointed out that 41 out of 42 analysts tracking the ITC stock had either a buy or hold rating, and that the company’s earnings per share has risen by 47 percent over the last three years.

“As far as dividend distribution is concerned, we have a clear policy that 80-85 percent of dividend will be distributed and the yields at today’s price is upwards of 5.5 percent,” Puri said.

The ITC management has been under fire of late as the stock has been one of the biggest underperformers among frontline stocks over the last two years

“We have looked at various tools and facets and various suggestions that have come on how to create shareholder value. Its starts with a suggestion on capital allocation, dividend distribution, there are suggestions on buybacks, there are also suggestions on restructuring and we do take all these suggestions seriously and examine it and do what will create sustained value and not just a fleeting value at a point of time,” Puri said.

On the hotel business, Puri said the company was going the ‘asset light’ route which means that the focus will be on management contracts.

“As far as buybacks and restructuring are concerned, as I had said in the AGM, that we take note of these suggestions and the board will look at it and whatever needs to be done to unlock or create value for shareholders or stakeholders, the board will definitely look at it but it has to take a holistic view keeping the long-term sustained growth trajectory in mind and of course hotel is one area we will examine,” he said.