ITC Chairman and Managing Director Sanjiv Puri told CNBC-TV18 in an exclusive interaction on Monday (September 25) that he may look at an acquisition in the overseas market for the company’s consumer business. ITC’s fast moving consumer goods (FMCG) business has the maximum potential for growth, Puri noted.
“Will make all direct-to-consumer (D2C) acquisitions omni-channel in the future,” he said, adding that ITC is investing in companies playing a larger underlying trend.
Puri added that the company has grown faster than the industry. He aspires to improve the FMCG margins by 80-100 basis points annually.
The ITC chairman and MD was speaking to CNBC-TV18 at the JPMorgan India Investor summit.
On the soon-to-be-demerged hotel business, Puri said he does not foresee a significant need for capital raising. He said the hotel business will have no debt and it will be able to fund its expansion over the next 2-3 years.
As per the scheme of arrangement announced in July, ITC will hold a stake of close to 40 percent in the new entity, while the remaining 60 percent will be held by the company’s shareholders, proportionate to their shareholding in the company.
Puri said the decision on ITC holding 40 percent in the hotel business has been well thought out and that the demerger process is on track for the 15-month journey. He expected ITC’s overall return on capital employed (RoCE) to improve by 2,000 basis points with the hotel business demerger process.
Puri pointed out that ITC has opened 18 hotels in the last 16 months and that the company will look to expand its hotels’ presence in tier 2 cities and beyond. He maintained that ITC will persist with the “asset right” strategy for the hotel business.
Shares of ITC ended little changed on Monday at Rs 443.1, and have gained 33 percent so far this year.