ITC Ltd., the diversified Kolkata based conglomerate bucked the trend on stock exchanges by closing in the green on day when the market witnessed the steepest fall in four months. The reason primarily was the better than expected quarterly results.
ITC has major expansion plans in almost all the segments it operates in but faces problems owing to rising real estate prices, problems of land acquisition and a delay in regulatory clearances which is hampering its growth plans.
ITC is investing Rs.8000 crore in building five luxury hotels in Chennai, Bangalore, Hyderabad and Ahmedabad, and a golf resort at Gurgaon through its subsidiary company. It is also investing Rs.1500 crore in West Bengal for food processing and logistic hub and an IT Park.
ITC is even contemplating reducing its reliance on its primary business of tobacco due to higher taxes and strict regulations. But with VAT now being introduced @12.5%, there would be a level-playing in this industry.
In the retail segment, ITC has a presence in agriculture retail through Choupal Fresh in urban areas and Choupal Sagar in villages catering to lower segment. It also runs premium apparel stores under Wills Lifestyle and John Players brand.
However, ITC is willing to start large supermarket and hypermarket chain to cater to mid-segment and is even considering acquisition of smaller retailer players in case of a shakeout in the industry.
Given the huge reserves of Rs.10000 crore in ITC balance sheet, expansion into modern retail cannot be ruled out for ITC. It may even enter the burgeoning financial services sector too. What next, maybe a telecom venture?