Cigarettes to hotels major ITC expects consumption to pick-up in the upcoming festive season. The company is already seeing rural growing faster than urban markets. Categories like chocolates, gift boxes for biscuits and juices are expected to see an enhanced demand. It has now started seeing some recovery in discretionary categories.
"Economic activity is improving and we expect an upward trend in the festive season. The overall consumption should see an uptick. We are already seeing a fair amount of buoyancy in the FMCG portfolio," said Sanjiv Puri, Chairman & MD, ITC.
During the lockdown, ITC saw robust growth in its FMCG portfolio. It launched about 40 products across the packaged foods, ready to eat, frozen foods space during the lockdown. The company also saw its sales in the e-commerce space double.
To cater to the surge in demand, ITC is investing in expanding capacities by adding more lines in existing integrated consumer goods facilities and by adding new units.
"Handwash segment is 5-6x as compared to what ITC was producing earlier. We are also making investments to cater to surge in demand for packaged foods. Cuttack, Hyderabad facilities will cater to elevated demand, " said Puri.
As the situation is still evolving, ITC believes that it is important to conserve cash at this point in time. The company is looking at opportunities to optimize spends. ITC has decided to go ahead with an asset-right strategy for the hotel business.
Answering questions on issues of buybacks and restructuring, Puri said, "Nothing is cast in stone forever. Buybacks, restructuring are tools which are available but it depends on the opportunity in the market. We will look at giving enduring value to all stakeholders."
