ITC targets consumption recovery in fiscal year 2025

Bengaluru: Despite a 1.3% year-on-year (YoY) decline in net profit in FY24, FMCG major ITC Ltd, ready to divest from its hospitality arm, is betting on a more buoyant economy and promotes this fiscal market.

As indicated when it announced its annual results in May, the company’s annual report praised seeing green shoots of recovery in the rural economy, which was the biggest drag on FMCG in the last fiscal. ITC expects agricultural sector programs to increase consumer demand.

Improvements in the manufacturing and service sectors are also of great help, as they would translate into more employment. There has also been greater investment in infrastructure projects to further support the country’s manufacturing sector.

The annual report notes that the country is already seeing employment growth across all sectors. All of this bodes well for consumer demand in the near term.

The basis for this positive outlook is that India is seen as one of the fastest growing major economies in the world, with significant growth opportunities. The report indicates that a favorable demographic profile, growing affluence, rapid urbanization and accelerated digital adaptation are key structural drivers of growth.

The Indian economy is expected to maintain its high growth trajectory in fiscal 2025, driven by strong momentum in fixed investment and private consumption growth, thanks to moderation in inflation, improving terms of trade for agriculture products, good rabi harvest and normal monsoons.