ITC eyes margin expansion of 100 bps a year

To leverage super app ITCMAARS to boost exports, enhance farmers’ income

July 21, 2022 07:02 pm | Updated 07:02 pm IST - Mumbai

Super app ITCMAARS is designed to provide maximum support to marginal farmers at their doorsteps, to give them the benefits of the best in technology and access to markets,”  says
Sanjiv Puri.

Super app ITCMAARS is designed to provide maximum support to marginal farmers at their doorsteps, to give them the benefits of the best in technology and access to markets,” says Sanjiv Puri. | Photo Credit: Partha Pratim Sharma@Delhi

Diversified conglomerate ITC Ltd. is eying a margin expansion of 100 basis points (bps) a year, its chairman Sanjiv Puri said at a virtual press conference.

“There was short-term stress,” Mr. Puri said. “Last year, the margin expansion was 10 bps. Due to the extraordinary situation, we could marginally expand. But our target is to achieve 100 bps a year,” he said while answering a question. 

He said the EBITDA was about 9% and it would take a year to be in double digits.

“There are signs of moderation, but the situation is dynamic. One has to monitor it,” he said about the current market situation.

Stating that the sharp depreciation of the Indian rupee had positively impacted the company as it was a net exporter, Mr. Puri said the company would boost exports of agricultural products in coming years.  Last year, it had achieved export revenue of ₹10,000 crore including agri-exports and efforts are on to increase it. 

ITC said it would leverage on its recently unveiled super app ITC MAARS to enhance India’s share of agri- products exports in the global market. 

“Agriculture is the lifeline of the economy but its contribution to the GDP is much smaller. Our [India’s] share in global trade is about 3%. From [food product] production perspective, we can grow vertically,” Mr. Puri said. 

He said to boost production of India’s agricultural products as well to enable farmers enhance their income, he company has come out with super app ITCMAARS that will be a catalyst for change.

“The newly launched superapp ITCMAARS is designed to provide maximum support to marginal farmers at their doorsteps, to give them the benefits of the best in technology and access to markets,” he said.

“For me, ITC MAARS will be a success when it makes a meaningful contribution to multiplying farmer incomes and making India’s agricultural value chains competitive,” he added.

“India has 140 million farmers but they have fragmented land holdings which needs to be brought together to bring scale. There is need for quality and sustainability,” he said, adding that the company was leveraging on ITCMAARS to achieve the desired objective. 

The super app now covers seven states and over 200 Farmers Producer Organisations (FPOs). In the future ITC plans to cover 4,000 FPOs having membership of 10 million farmers. 

“That is the way to empower farmers. ITCMAARS can play a transformative role. It’s about people, planet and profit covering together,” he added. 

Available to farmers free of cost it provides the whole ecosystem for them to scale up with profit. 

ITC, which is a major buyer of agricultural products to fuel its FMCG business, is also going to be a beneficiary by having assured supplies.

Mr. Puri said that a move to hive off the hospitality business was on the cards and the company had decided to exit the lifestyle business operated under the Wills brand. The inventory is being exhausted, he added.

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