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FMCG business growth in moderation, Inflation poses significant challenges – ITC

FMCG business growth

FMCG business growth in moderation

FMCG business growth – The fast-moving consumer goods industry’s watchdog in India, ITC Limited, released its annual report on Wednesday and noted that inflationary headwinds are still a major concern. 
 
According to the research, the FMCG business growth moderated as a result of low demand in rural regions, high inflation, and large base effects in a number of categories, including convenience foods and staples. 
 
According to the business report, the low demand in rural markets and high inflation caused the FMCG industry to moderate its growth during FY22. Because of the COVID-19 pandemic’s fluctuating intensity, demand for personal care goods for health and hygiene also fluctuated, but it remained much higher than pre-pandemic levels. 
 
“During the year, prices for essential inputs such as food oils, packaging supplies, soap noodles, petrol, logistics, etc. increased at an unprecedented rate, placing significant pressure on profits. This was reduced by implementing a thorough strategy across the entire value chain, it added, emphasizing cost control, portfolio premiumization, aggressive trade and marketing investments, financial incentives, supply chain agility, and prudent pricing decisions.

FMCG business growth

According to ITC’s annual report, the FMCG-Cigarettes category recovered in FY22 as a result of the return to normalcy in the economy, and sales even topped those of the pre-pandemic period in the second half of the year. 
 
The growing corporate travel, domestic leisure, and wedding segments helped ITC’s hotel segment rebound as well. It is still far below pre-pandemic levels, though. 
 
Increased revenue and a continuous focus on cost control led to a positive swing.

ITC Agribusiness

On the other hand, ITC’s agribusiness section performed exceptionally well, with sales increasing by 28.7% and results by 25.6%. This, according to the report, was caused by a significant increase in the exports of wheat, rice, spices, and leaf tobacco. 
 
The company’s overall financial performance for FY22 shows that ITC’s gross sales is at Rs 59,101 crore (up 22.7%), while its EBITDA is at Rs 18,934 crore (up 22.0%). Profit After Tax increased to Rs 15,058 crore from Rs 13,032 crore in the prior year, a growth of 15.5% over Profit Before Tax of Rs 19,830 crore. 
 
ITC’s full-year comprehensive income was Rs 15,632 crore, up from Rs 13,278 crore in FY21. As opposed to the previous year’s earnings per share of Rs 10.59, this year’s earnings per share were Rs 12.22. 
 
The highest grade among all global tobacco firms, ITC also maintained its ‘AA’ rating by MSCI-ESG for the fourth consecutive year and was included in the Dow Jones Sustainability Emerging Markets Index. 

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