Thread by @theBuoyantMan

A small info-thread about ITC:

- Incorporated in 1910.
- Started as "Imperial Tobacco Company of India Limited" as a British-owned company in Calcutta
- They tied up with farmers across India and set up manufacturing facilities.

- From 1910 to 1970, ITC pursued aggressive growth. It established relationships with farmers, set up factories, and put together strategic partnerships.
- Post 1960, Indian ownership increased in the company.

- It was one of the first companies to leverage and implement cutting edge technology.
- By 1970, they renamed themselves as India Tobacco Company.
- In 1973, the company decided to diversify their product portfolio and set up a research center.

- That's when they renamed themselves again to ITC Limited.
- By 1975, they acquired the Hotel Chola in Madras, and entered the hospitality sector.
- They entered the paperboards business in 1979.
- In the year 1986, they opened an Indian restaurant in New York.

- They also set up ITC Agro Tech Limited around the same time.
- Sundrop, now a seed oil + peanut butter brand under the ConAgra company, was once ITC's. They started it around 1988, to manufacture and distribute seed oils. They sold it in 1998 to the ConAgra group.

- ITC also owns the brand "Will's".
- The ITC Classic Finance company they started was later sold to ICICI Bank group.
- The year 2000 saw the launch of two of their now famous brands. "Expressions" greeting cards and gifting line, and "Classmate" brand notebooks.

- They recently acquired 100% of Sunrise Foods to gain dominant position in the spices arena.
- In the year 2001, they ventured into the packaged food products space. Sunfeast was then launched as a competitor to Britannia.
- ITC also entered into personal care products space.

ITC by now is a behemoth, a company you'd call "Too Big To Fail". Also, the government makes a lot of money through taxes levied on ITC's businesses. ITC makes so much money through its businesses now that they have more cash than they can use.

The huge amount of Free Cash Flow in their books puts them at a unique competitive advantage. They can now invest in establishing companies in sectors they want to venture into. They can also acquire companies that look attractive enough to be a part of their portfolio.

They have so many businesses in their company portfolio now.

itcportal.com/brands-microsi…

These are the list of brands that are under their umbrella.

They are the sector leader in Cigarettes. In every other product line, they are lagging behind market leaders, and are steadily gaining market share. They are also actively making their operations efficient to eventually convert it to their margins.

But, the POTENTIAL of what the company would and could do, must be factored in the price. Now, there are two questions. Should we value the company as a FMCG company or should we value it as a cigarette company?

PPFAS has recently been found upping their ITC stake at march lows. Also, quite a lot of people on Twitter (investors, fund managers, etc.,) are bullish on ITC now. Is it due to a pending re-rating because of their increasing market share in the fmcg sector?

What happens to ITC if the government decides to tax them more on the cigarettes front? How long can they keep passing on these taxes to their sticky customer base? Will those sticky customers be sticky customers?

Although no other brand has such penetration like ITC, especially in the cigarettes industry, exactly how much of ITC's business has a competitive moat around it? Can it be effectively dethroned or is it hard to replicate? Can people choose other brands of cigarettes over ITC's?