Sanjiv Puri takes over as ITC chairman, inherits rich legacy

Cigarette-to-soap maker ITC Ltd on Monday announced elevating its managing director Sanjiv Puri as CMD of the conglomerate, two days after its long-serving chairman Y C Deveshwar passed away.

Puri was being mentored by Deveshwar as his successor for the role of CMD.

Deveshwar steered ITC from mainly being a cigarette maker to a major FMCG and hospitality conglomerate.

The company in a regulatory filing said that the Board of Directors in a meeting on Monday appointed Puri as chairman and MD. Puri, 56, had taken over the role of MD from May 16, 2018, while he became CEO in February 2017, after the company split the role of the executive chairman – between chairman and CEO as part of succession planning.

His eventual ascent to the top post became apparent in December 2015 when the IIT-Kanpur graduate was made the head of all of ITC's fast moving consumer goods businesses that include cigarettes, toiletries, personal care, snacks and also paper and packaging.

Apart from demonstrating his ability to broker quick acquisition deals - BNatural brand in fruit juice space, Savlon in hygiene and Shower to Shower in personal care – Puri has also handled most of the verticals of ITC at different points of time.

He first became divisional chief executive of the tobacco division – ITC's single most important business unit till now — in 2009 and additionally handled the charge of the company's marketing and distribution function.

According to the company insiders, Puri, an ITC veteran, has held various responsibilities, including president – FMCG businesses, divisional chief executive of the tobacco division and managing director of ITC Infotech India Ltd, among others.

On his new role, Puri said, "It is a responsibility that I accept with humility and with a deep resolve to build on the outstanding legacy nurtured over the years, further strengthen and build market leadership across all business segments whilst reinforcing ITC's commitment to put Nation First always."

ITC on Monday also reported an 18.72% increase in standalone net profit to Rs 3,481.9 crore for the fourth quarter ended March 31, 2019. Its total income during the quarter under review rose 14.26% to Rs 12,946.21 crore, compared to Rs 11,329.74 crore in the same period last fiscal.

Revenue from total FMCG business, including cigarettes, stood at Rs 8,759.84 crore in January-March 2019, as against Rs 7,988.29 crore in the corresponding quarter previous fiscal.

During the quarter, revenue from cigarettes rose to Rs 5,485.92 crore as against Rs 4,936.45 crore a year ago. Revenue from FMCG-others segment was Rs 3,273.92 crore in the January-March quarter, as against Rs 3,051.82 crore in the year-ago period.

During the quarter, ITC's revenue from non-FMCG business, which includes hotels, agri business, paperboards, paper and packaging, rose to Rs 4,148.05 crore compared to Rs 3,517.1 crore in the same period of preceding fiscal.

The Board of the company also recommended a dividend of Rs 5.75 per share for the fiscal ended March 31, 2019.

Elaborating on its financial results, ITC stressed that a 'punitive' and 'discriminatory' taxation and regulatory regime, has put legal cigarette industry under severe pressure over the last five years. "Excessive taxation has made legal, duty-paid cigarettes in India amongst the costliest in the world in terms of per capita affordability," the company said in a statement. While the legitimate cigarette industry has declined steadily since 2010-11 at a compound annual rate of over 4% per annum, illegal cigarette volumes, in contrast, have grown nearly 5%. during the same period, making India one of the fastest growing illegal cigarette markets in the world. According to Euromonitor International, India is now the fourth largest illegal cigarette market in the world, the company said.

The company said that after continued sluggishness over the last two years, which witnessed two major economic reforms – demonetisation and Goods and Services Tax, there was an anticipation of a significant pick-up in the FMCG industry. However, after a promising first half, growth in the second half of the year, particularly in the last three-four months was muted due to tight liquidity conditions and sluggish rural demand.

THE CAREER GRAPH

• Puri served as chief executive officer of ITC since February 5, 2017
   
• He oversees FMCG, paperboards, paper & packaging and agri businesses of ITC
   
• Director for FMCG business at ITC since December 2015
   
• President, FMCG businesses since December 2014
   
• Divisional chief executive of India Tobacco Division at ITC since 2009
   
• MD at ITC Infotech India during May 2006 to August 2009
   
• MD of Surya Nepal from 2001 to 2006, a subsidiary of ITC