He also expects the fast-moving consumer goods (FMCG) industry to bounce back by volume sales growth from the next fiscal year, led by rural demand, with early signs of recovery already visible. Puri said the revival will be accelerated, with inflation cooling down and product prices correcting.
Demerging hotels business
“The government has done a remarkable job in controlling inflation and managing macros, compared to what’s happening elsewhere in the world,” Puri told ET in an interview.
The chief of one of the country’s largest conglomerates said plans to create an “alternate structure” for the hotel business will be undertaken in the “next couple of quarters,” with the industry’s performance improving. This means demerging the hotels business, a plan that had been delayed since the sector was badly hit by Covid. “While we are pursuing an asset-right strategy for our hotels business,” the focus is more on management contracts. “Investments will continue in expanding our manufacturing footprint for FMCG, paper and paperboards businesses, especially for expansion of sustainable packaging solutions, renovation, upgrade of technology and assets across businesses,” Puri said.
Some of ITC’s investment plans include an integrated consumer goods factory in Odisha, a nicotine derivatives plant for exports in Karnataka, a personal care products facility in West Bengal, a moulded fibre products unit in Madhya Pradesh, and two integrated consumer goods and logistics facilities in UP and Madhya Pradesh.
ITC, number 2 in hotels after the Tata-owned IHCL, said demand for domestic tourism is strong now, with all segments reporting robust growth. “It is expected that the growth in demand will be ahead of supply growth (of rooms)… Given the industry’s improved performance in recent quarters, it would be reasonable to expect that this (demerger of the hotels business) will be taken forward suitably in the next couple of quarters,” said Puri.
FMCG on track
The CMD of the cigarettes-to-cookies conglomerate, which faces the highest exposure to agriculture within the consumer products market in terms of sales as well as sourcing, said green shoots in rural demand are visible but will only be sustainable depending on realisation from the current harvest.
