NANDI INSTITUTE OF MANAGEMENT

AND SCIENCE, BALLARI

 PRESENTATION ON ITC, LTD

THE FRONTLINE TOPICS

• Gopa Rohith • History of ITC
• Shamiulla • Evolution of ITC
• S.Sneha • The Organisational Structure of ITC
• K.M.Suma • Departmentation of ITC
• K.V.Mehaboob Basha • SWOT Analysis of ITC
• D.Harsha Vardhan • Financial Analysis of ITC
 ITC, LTD

It is established in 1910, ITC Limited is a diversified mixture of businesses

spanning Fast Moving Consumer Goods comprising Foods, Personal Care,
Cigarettes and Cigarette Branded Apparel, Education & Stationery Products,
Incense Sticks and Match boxes, Hotels, Paperboards and Packaging, Agri
Business and Information Technology. The Company was incorporated on August
24, 1910 under the name Imperial Tobacco Company of India Limited. As the
Company’s ownership progressively Indianised name of the Company was
changed to India Tobacco Company Limited in 1970 and to I.T.C. Limited in
1974. The Company now stands for ITC Limited, where ITC is today no longer
any initialised form.
Evolution Of ITC
The ITC has developed as a multi-business corporation. It has adapted the changes and became a well-known brand in the
market

1925: Packaging and Printing: Backward Integration

Though the first six decades of the Company’s existence were primarily devoted to the growth and
consolidation of the Cigarettes and Leaf Tobacco businesses, ITC’s Packaging & Printing Business was set up in
1925 as a strategic backward integration for ITC’s Cigarettes business. It is today India’s most sophisticated
packaging house.

1975: Entry into the Hospitality Sector – A ‘Welcom’ Move

The Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes
in the life of the Company. In 1975, the Company launched its Hotels business with the acquisition of a hotel in
Chennai which was rechristened ‘ITC-Welcomgroup Hotel Chola’ (now renamed My Fortune, Chennai). The
objective of ITC’s entry into the hotels business was rooted in the concept of creating value for the nation. ITC
chose the Hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure
and generate large scale direct and indirect employment.
1979: Paperboards & Specialty Papers – Development of a Backward Area

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited.
Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division
of the Company, Bhadrachalam Paperboards Division.

2001: Branded Packaged Foods – Delighting Millions of Households

ITC’s foray into the Foods business is an outstanding example of successfully blending multiple internal
competencies to create a new driver of business growth. It began in August 2001 with the introduction of
‘Kitchens of India’ ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples
segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad Atta (wheat
flour).

2002: Education & Stationery Products – Offering the Greenest products

ITC launched line of premium range of notebooks under brand Paperkraft in 2002. To augment its offering and
to reach a wider student population, the Classmate range of notebooks was launched in 2003. Classmate over
the years has grown to become India’s largest notebook brand and has also increased its portfolio to occupy a
greater share of the school bag.
Organisational Structure
The term “Organisation” can be studied as a structure and also as a process. In a static sense, organisation is a structure. A
group of people functions within this structure and try to accomplish certain objectives. Organisation is a structure for the
conduct of business activities efficiently
In the words of Kast and Rosenzweig, “ Structure is the established pattern of relationships among the component parts of
the organisation.
• In this sense Organisation Structure refers to the network of relationships among individual and positions in an
Organisation

Types of Structures
* Tall Structure
*Flat Structure

ITC follows “TALL Organizational Structure”

The Organisational Structure Of ITC
Departmentation
• Departmentation means the process by which similar activities of business are grouped into units for the purpose of
facilitating smooth administration at all levels.
• It is process of dividing the large functional organisation into small and flexible administrative units.

Need and Importance of Departmentation

It increases the operating efficiency of the employees.

It makes the executive alert and responsible in his duties.
It increases the prestige and skill of the departmental heads.
It helps in better co-ordination among the managerial personnel.al
Departmentation of ITC
Head of business
CEO
information Legal
Personal Assistant
Advisor

Head of business
Microsoft dynamics Director
Office clerk

Head of business SAP Head of the department

Head of business software

services Managers

Head of Marketing
Supervisors
Head of HR

Employees
Head of Finance
SWOT Analysis Of ITC Ltd
Strengths:
Increasing Revenue of ITC Limited in the year by year is its main strength. In the year 2019, its revenue was ₹52,035
crore.
Operating Income is 2.7 Billion US Dollars in 2019.
Net Income is Rs. 12824 Crores in 2019.
Number of Employees 27279
Portfolio of Companies: under its name, ITC has 6 large and diverse businesses that boost its total revenue and allow ITC
to innovate and pursue other business opportunities.
• Powerful brand: ITC is a large brand house with most of its products leading the segments in which it works.
Weakness:
Tobacco Products Association has an impact on the brand: ITC has made a great deal of effort to enhance its corporate
image, but the fact that ITC has many tobacco products in its portfolio has an impact on its corporate image. The increase
in the Tobacco Tax has an effect on revenue: due to the rise in the tax on tobacco products, rates and, subsequently, profits
are affected.
ITC is still dependent on its tobacco sales, and people have cheaper alternatives and other brands.
• The hotel industry has not been able to build an enormous market share.
Opportunities:
Growth in purchasing power and changing lifestyles: ITC can tap into rising buying power and changing customers’
lifestyles in India. It will help to raise sales for all of its companies.
Growing Personal Hygiene as well as Food Processing Industry in India: ITC should use its distribution channel in the
Personal Hygiene and Food Processing Industry to capitalize on the growth of categories and thus increase revenue.
Tap opportunities created in the rural sector: the rising rural sector in India and other developing nations are generating
enormous opportunities to boost the company’s bottom line.
Mergers and acquisitions are planned to reinforce the brand.
• Increased people’s buying power, thus rising competition. More exposure to hotel chains to increase market share.
Threats:
Intensifying rivalry in FMCG companies: ITC is facing intense competition in its FMCG market from major MNCs such as
HUL and P&G and Indian FMCGs such as Patanjali and Dabur. It limits the market share of the ITC.
Regulations and Increased Taxation in Cigarette Business: The Tobacco and Cigarette Industry in India continues to be
regulated by strict government regulations and the tax system. This poses a threat to the highly profitable ITC Cigarette
company.
• Increasing health awareness: there has been an increase in health awareness, which has resulted in a decrease in the
demand for tobacco products in India. Anti-smoking programs throughout the country also have an effect on cigarette
sales.
• FDI in the retail sector, thereby allowing for international brands.
 Financial Analysis of ITC Ltd
Shareholder information:
• The company’s market capitalisation stood at Rs 2,68,948 Crores ($ 36.79 Billions) as on 31 st March 2021.
• FIIS: 10.81%
• DIIS: 43.72%
• Public: 45.47%
• One ITC share price as of 15th December 2021 is Rs 224
• For the year ended March 2021 ITC has declared dividend of Rs 10.75 per share.
• Over the last one year. ITC share price has moved up from Rs 213.4 to Rs 223.9,registering a Gain of Rs 10.5 or around
4.9%
Income statement analysis:
Operating income during the year fell 4.3% on a year-on-year (YOY) basis.
The company’s operating profit decreased by 11.2% YOY finance costs decreased by 28.8% YOY.
Other income grew by 1.3% YOY
• Net profit for the year declined by 14.1% YOY Net profit margine during the year declined from 31.2% in FY20 to 27.9%
in PY21
Balance sheet analysis:
The company’s current liabilities during FY21 stood at Rs 107 billion as compared to Rs 96 billion in FY20, thereby
witnessing an increase of 11.8%.
Long-term debt down at Rs 56 million as compared to Rs 59 million during FY20, a fall of 5.4%.
Current assets fell 11% and stood at Rs 350 billion, while fixed assets rose 3% and stood at Rs 388 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 738 billion as against Rs 773 billion during FY20, thereby
witnessing a fall of 5%.
Conclusion:
• ITC is promoting their brands through a advertisement campaign as well as door to door promotion.
• ITC is also focusing on Retailers and Wholesalers to promote their brand.
• The demand of their product is very low because people don't know about their brands very well.
• ITC knows their strength and weakness in the personal care market, so they are applying new concept to overcome their
weaknesses.
• ITC now offering more margins, exciting offers and long credit period to retailers and wholesalers.

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