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Informist, Friday, Jul 26, 2024

By Avishek Rakshit

KOLKATA – Diversified conglomerate ITC Ltd is planning to scale up its technology arm, ITC Infotech India Ltd in the coming years before it takes a call on demerging the business, its Chairman and Managing Director Sanjiv Puri said today.

“We are looking at building ITC Infotech as a large engine of growth and continue to build up the company,” Puri told media in an online interaction after the company’s 113th annual general meeting.

Asked if the company has plans to demerge the business, Puri said: "These are possibilities in the future, but the priority is to scale up the business."

During the company’s annual general meeting, some shareholders raised questions about the future of the information technology business of ITC. Speculations have been rife about a possible demerger of the business following the company’s decision to demerge and list its hotel business. Some investors consider ITC Infotech, a wholly-owned subsidiary of ITC, as a non-core business as it lacks intra-departmental synergies.

Currently, ITC has five primary business divisions – cigarettes, non-cigarette consumer goods, hotels, agricultural vertical, and paper and paperboards division. These verticals have synergies, which give ITC a cost advantage.

For instance, its agricultural division procures leaf tobacco and exports it. The same tobacco procured by the agricultural division is used by the cigarettes division. Similarly, ITC procures wheat and exports it via the agricultural division, while the same wheat is used by the consumer goods division for value-added products under the Aashirvaad brand. 

Puri said that ITC Infotech has done substantial acquisitions in the past and has business agreements in place, which will help the information technology division to increase its revenues in the coming years.

During the year ended March 2024, ITC Infotech reported a 12.5% growth in its consolidated revenue at 37.8 bln rupees. The net profit of the company increased 14.3% to 4.6 bln rupees in 2023-24. Although the information technology business of ITC is smaller compared to peers like Tata Consultancy Services and Infosys, the company has a global presence in many countries including the US, the UK and Brazil. This week, ITC incorporated a subsidiary of ITC Infotech in Italy.

Today, shares of ITC closed 2.5% higher at 502.20 rupees on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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