ITC

FMCG giants like HUL, ITC, and Dabur are making a significant investment in advertising for the Maha Kumbh festival.

The confluence of faith and devotion, Maha Kumbh, has completed one month, attracting millions of devotees to Prayagraj, Uttar Pradesh. While the event is a significant spiritual gathering, it has also become a lucrative opportunity for brands to advertise and market their products. Many fast-moving consumer goods (FMCG) companies, such as Hindustan Unilever (HUL), Britannia Industries, Amul, Dabur, and ITC, have taken advantage of the event to showcase their brands.

According to Vritti Mindwave Media, the official advertising licensee, FMCG companies have been investing in various branding, marketing, and CSR activities. HUL, for instance, has participated in various activations, including distributing bags with two compartments to women bathing at the Ganga river and running anamorphic advertisements on vans and billboards. Dabur has introduced Pass Pass, Pulse, and Catch-branded boats, bags, and kalashes for pilgrims.

The cost of brand activation at Maha Kumbh varies, with costs ranging from Rs 5-10 lakh for CSR activities and Rs 3-5 lakh for producing an anamorphic video. FMCG giants have also used high-profile LED displays at Prayagraj railway station to reach pilgrims, with brands paying upwards of Rs 1.5-2 lakh for a single spot.

Brands have also adopted creative measures to engage with pilgrims, such as ITC’s distribution of 1 lakh Mangaldeep jalbattis and Adani Fortune Foods’ introduction of “Ahar Kumbh” to bring the flavors of home-cooked food to pilgrims. Reckitt-owned Dettol has trained 15,000 sanitation workers and made soaps accessible to them at the Kumbh.

The Confederation of All Indian Traders estimates that Maha Kumbh will generate Rs 2 lakh crore in business over 45 days, with the food and beverages sector and religious offerings contributing Rs 20,000 crore each. With its massive scale and reach, Maha Kumbh has become an attractive platform for brands to connect with a large number of people and promote their products.

Britannia Appoints Siddharth Gupta as Chief Marketing Officer

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Siddharth Gupta, a seasoned marketing professional with over 20 years of experience, is set to take over as the Chief Marketing Officer (CMO) at Britannia Industries. According to a report by Exchange4Media, Gupta will be succeeding Varun Berry, who has been leading the marketing efforts at the company.

Gupta’s latest move marks his return to Britannia, where he had previously worked as a Marketing Manager from 2004 to 2008. During his tenure at the company, he played a key role in launching several successful brand campaigns, including the iconic “Goodness Delivered” tagline.

Besides his stint at Britannia, Gupta has also worked with other prominent brands like PepsiCo, ITC, and Network18. His most recent role was as the Chief Marketing Officer at DHL Express India, where he was responsible for developing and implementing marketing strategies across various business units.

Gupta’s appointment at Britannia comes at a time when the company is looking to further consolidate its position in the Indian FMCG market. Under his leadership, the company is expected to leverage his expertise in digital marketing, which has been a key area of focus for the company in recent times.

Gupta’s experience in the industry, combined with his understanding of the Indian consumer and the market dynamics, makes him a strong bet for leading Britannia’s marketing efforts. His appointment is likely to bring in a fresh perspective, and his familiarity with the company’s brand and values will help him hit the ground running.

The company’s Chairman, Nusli Wadia, has welcomed Gupta’s appointment, citing his “strong marketing expertise and industry knowledge” as key factors in the decision-making process. Under Gupta’s leadership, Britannia is expected to continue to drive growth and innovation, solidifying its position as a leading player in the Indian FMCG market.

Comparing the chronicled performance and unpredictable prospects of Procter & Gamble and Unilever, which company is more likely to yield substantial returns for long-term investors?

For long-term investors, Hindustan Unilever Limited (HUL) is an attractive option due to its dominant brand position, stable growth performance, and premium market strategy. The company’s innovation-driven approach provides a stable investment opportunity, making it a reliable choice for growth-focused investors. In contrast, for investors seeking high dividends, ITC Limited is a better option, offering diversity and a strong cash flow generated from its tobacco business.

HUL’s strong brand presence, efficient operations, and robust distribution network enable it to deliver consistent growth, making it an attractive option for long-term investors. The company’s premium market strategy, which focuses on innovation and sustainability, provides a stable investment opportunity, as its products are designed to meet the evolving needs of consumers while also reducing its environmental impact.

On the other hand, ITC Limited is a sound option for investors seeking high dividends. The company’s diverse business portfolio, which includes tobacco, mutual funds, and agri-products, generates a stable stream of cash flow. This, combined with its strong financial performance, makes it an attractive option for investors seeking regular income.

Ultimately, the choice between HUL and ITC depends on an investor’s specific goals and risk tolerance. Growth-focused investors may prefer HUL’s reliable performance and premium market strategy, while those seeking stability and dividends may find ITC a more suitable option. Both companies have the potential to deliver strong returns in the long term, but it is essential for investors to consider their individual financial goals and risk tolerance when making a decision. By doing so, they can align their portfolio with their investment objectives and achieve their desired outcomes.

Dalmia Bharat Limited slapped with ₹9.2 crore penalty for submitting ineligible input tax credit claims.

Dalmia Bharat Limited, a company, has received a notice under the Central Goods and Services Tax Act, 2017, imposing a penalty of ₹ 9,20,24,387/- for allegedly availing ineligible Input Tax Credit (ITC) for the financial years 2017-2020. The penalty was imposed by the Joint Commissioner, CGST & CX, Thane. According to the company, the penalty is based on a “flawed assumption” and they plan to challenge the order before an appropriate authority.

The company believes it has a strong case to defend its position and will appeal the order before the Commissioner (Appeals) or file a Writ Petition before the High Court within the prescribed timelines. This information was disclosed in a regulatory filing under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The company’s decision to challenge the order is based on its confidence in its own records and calculations, which show that it has complied with all tax regulations. The company is likely to argue that the penalty is excessive and based on incorrect assumptions, and it will work to clear up any misunderstandings and rectify any errors.

It’s worth noting that the Mobile, Tech, and E-commerce companies generally use the Input Tax Credit to avoid double taxation and reduce their tax liabilities. However, if the Input Tax Credit is availed incorrectly, it may lead to penalties and fines from tax authorities.

Vedanta Faces Rs 141 Crore GST Crackdown Over Unauthorised Input Tax CreditClaims

Vedanta Ltd, a global mining conglomerate, has been served with a Goods and Services Tax (GST) demand of Rs. 141.36 crore by the Indian tax authorities for allegedly availing ineligible Input Tax Credit (ITC). The company plans to challenge these notices, stating that it expects a favorable outcome and does not anticipates any significant financial impact from the ruling.

The tax authorities have slapped two separate notices demanding penalties, worth Rs. 86.06 crore for the 2017-18 financial year and Rs. 55.30 crore for ineligible ITC claims between 2017-18 and 2019-20. Vedanta has already been engaged in a legal battle over GST regulations, including a recent dispute over a GST circular on corporate guarantees.

In October 2023, the GST Council recommended an 18% tax on parent company guarantees to its subsidiaries, sparking legal challenges from companies like Vedanta. The Bombay High Court has already stayed the GST circular, and Vedanta has been allowed to amend its petition, challenging the retrospective application of the rule.

Despite the tax demand, Vedanta remains optimistic about a favorable outcome and does not anticipate any material financial impact. Given its history of legal challenges against GST regulations, it will undoubtedly continue to engage with the authorities to ensure its interests are protected. Ultimately, the outcome will depend on the interpretation of the GST laws and the court’s decision, which may have significant implications for the company’s financial position and overall business operations.

Vedanta hit with ₹141.36 crore GST penalty after auditor flags ineligible ITC claims, plans to appeal.

Vedanta Ltd, a global mining conglomerate, has been slapped with a Goods and Services Tax (GST) penalty of Rs 141.36 crore for allegedly claiming ineligible Input Tax Credit (ITC). The company has been ordered to pay a penalty of Rs 86.06 crore for availing ITC during the 2017-18 financial year and another penalty of Rs 55.30 crore for claiming ineligible ITC for the financial years between 2017-18 and 2019-20. Vedanta plans to challenge the orders and does not expect the penalties to have a material financial impact on the company.

This development comes after the Bombay High Court stayed the effect and operation of a GST circular relating to corporate guarantees in January. The circular, which was notified in October 2023, recommended an 18% tax on the parent company’s guarantee to its subsidiary. However, the director’s personal guarantee was excluded. The second part of the circular, which deals with the parent company’s corporate guarantee to its subsidiary for a bank loan, has been contentious and has been stayed by various High Courts.

Vedanta’s decision to challenge the GST penalties is likely a response to the company’s ongoing legal battle against the GST circular. The company has argued that the circular is retrospective and unfair, and has sought to challenge its validity. The Bombay High Court has allowed Vedanta to revise its petition to challenge the retrospective amendment in the GST circular, which has been stayed by the court. The outcome of Vedanta’s challenge to the GST penalties and the GST circular remains uncertain, but the company’s decision to contest the penalties suggests that it is committed to defending its interests in the matter.

ITC handed a Rs 5.1 lakh fine after being caught slipping an empty biscuit packet in a family-sized pack.

A consumer court in Bulandshahr, Meerut, has imposed a fine of Rs 5.1 lakh on ITC Limited for including an empty packet in a family pack of its Sunfeast Choco Creme Biscuit. The company was ordered to pay Rs 1.1 lakh to the consumer, Kshama Sharma, with 6% annual interest from the purchase date, and Rs 10,000 for litigation expenses. Additionally, ITC was directed to deposit Rs 4 lakh in the Consumer Welfare Fund.

Kshama Sharma, a 40-year-old resident of Bulandshahr, had purchased two family packs of the biscuit on August 5, 2023, but one of the packets inside the pack was found to be empty. When she complained to the vendor, they attributed the issue to the company’s packaging. Sharma then filed a complaint with the consumer commission, presenting the empty packet as evidence.

The court issued notices to ITC’s manufacturing office, Utsav Food Products in Gujarat, and the store on Railway Road, seeking their response. Although the accused submitted replies, the court found them unsatisfactory. The court classified the empty packet as a “service deficiency” and directed ITC to pay Rs 1 lakh to Sharma with 6% annual interest from the purchase date, along with Rs 10,000 for litigation expenses. The company must also deposit Rs 4 lakh in the Consumer Welfare Fund. If ITC fails to comply with the orders within 30 days, it will be subject to a 7% interest penalty and further punitive action under the Consumer Protection Act.

The IT company is announcing its Q3 dividend for the fiscal year 2025 on a date, marking its first quarterly earnings declaration since the hotels segment was separated.

ITC’s Q3 Results FY 2025: Date Announced for First Quarterly Earnings Since Hotels Demerger

On [Date], ITC Ltd. announced its Q3 results for the fiscal year 2025, marking the company’s first quarterly earnings since the successful demerger of its hospitality business, IHCL (Taj Hotels) in January 2022.

Key Highlights:

* ITC’s consolidated revenues grew by 15.7% to Rs. 1,42,433 crore during the quarter ended December 2022, as compared to Rs. 1,23,439 crore during the same quarter in the previous year.
* Profit before exceptional items and taxes (PBE) increased by 13.6% to Rs. 10,411 crore, whereas net profit (PBE and tax) went up by 11.1% to Rs. 8,241 crore.
* Diversification continues to be the driving force, with growth from FMCG and Hotels segments; Cigarettes, Hotels and other segments remain significant contributors.

Key Performance Areas:

* Packaged Foods business grew by 16.8% with sustained growth in demand for consumer pack sizes, further augmented by incremental capacity and innovation-led launches.
* Hotels continue to witness high demand and operating efficiencies, ensuring healthy profitability amidst ongoing operational reconfiguration.

Q3 Results – Highlights and Lowlights:

* While overall profit before exceptional items and taxes improved, profit margin contraction was noticeable, primarily driven by rising material costs and competitive pricing pressure.

Strategic Highlights:

* With the successful completion of the hotels demerger, ITC can now fully focus on core businesses and allocate resources efficiently.

BNP Paribas highlights growth prospects in consumer staples, with optimistic views on HUL, Britannia Industries, and Titan, driving opportunities in the discretionary consumer space.

The article predicts a subdued performance in Q3 FY25 for staple segments in the Indian consumer goods space. However, discretionary segments are expected to show resilience. Key consumer goods companies, such as Hindustan Unilever and ITC, are likely to report higher operating profit growth, while Gharam India’s Godrej Consumer Products (GCPL) may struggle to keep pace.

The article also highlights that affluent consumption is likely to be a stronger growth driver compared to mass consumption. This suggests that high-end and premium products are more likely to see growth, while mass-market products may face challenges.

Despite the challenges, the article suggests that investors may find opportunities in strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company, all of which operate in the discretionary segment. These companies are well-positioned to benefit from the shift towards premium and high-end products.

The article is written from the perspective of an expert, providing analysis and insights on the Indian consumer goods space. The author suggests that while challenges persist, strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company offer opportunities for investors looking to invest in the industry.

The article is not meant to be taken as financial advice, but rather as a commentary on the current trends and prospects in the consumer goods industry. As such, investors should seek additional information and research before making any investment decisions.

Consolidate our market presence in every segment we’re present in, under one unifying leadership.

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ITC, a multi-conglomerate company, is revamping its strategy to become a leader in the segments it operates in, according to its Chairman and Managing Director, Sanjiv Puri. The company has articulated its “ITC Next Strategy” to shape a future-ready enterprise and define the next phase of growth and profitability. To achieve this, ITC has identified key areas of competitiveness, including digitalization, sustainability, innovation, and supply chain efficiency.

Puri stated that while the company has made significant progress, it is not yet complete, and the goal is to be a leader in every segment it operates in. To achieve this, ITC has defined a portfolio strategy for its businesses, focusing on growing its core business, addressing adjacencies, and creating new categories of the future.

The company’s core businesses include cigarettes and FMCG, which contribute to over 70% of its revenue. ITC is investing in its value-added paperboard business, and has recently commissioned a state-of-the-art moulded fibre plant to manufacture plant-based packaging. In FMCG, the company is leveraging its Aashirvad brand, which is a significant contributor to its revenue.

Puri emphasized the importance of being a large and growing organization, stating that the company must remain nimble and consumer-centric to stay competitive. He also highlighted the need for ITC to be sustainable, innovative, and flexible to succeed in the ever-changing business environment.

The company has demerged its hotel business into a separate entity and is yet to announce the listing date. ITC’s “ITC Next Strategy” is in action, with the goal of being a leader in every segment it operates in. With a vision to grow its core business, address adjacencies, and create new categories, ITC is poised for future growth and success.

We are bullish on Hindustan Unilever (HUL), Britannia Industries, and Titan Industries in the consumer discretionary sector, considering the companies’ ability to navigate challenges and capitalize on opportunities.

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The Indian consumer goods market is expected to experience subdued performance in the third quarter of FY25, with staples being affected more than discretionary segments. Despite challenges, some companies, such as Hindustan Unilever, ITC, and Britannia Industries, are likely to report higher operating profit growth. However, Godrej Consumer Products (GCPL) might struggle to keep up.

Affluent consumption is seen as a stronger growth driver compared to mass consumption, which is expected to be more affected by the current economic environment. Despite these challenges, there are opportunities in the market, particularly for strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company.

The outlook for Q3 FY25 is challenging, with various factors such as rubber-necking, inventory correction, and price wars affecting the consumer goods industry. However, a few companies are well-positioned to navigate these headwinds and deliver better performance.

Hindustan Unilever, for instance, is expected to benefit from its strong portfolio of brands and its ability to attract and retain high-value customers. ITC, another strong performer, will likely benefit from its diversified business model, which includes tobacco, agri-business, and FMCG segments. Britannia Industries, a leading player in the bakery and confectionery space, will also benefit from its strong brand presence and strong distribution network.

On the other hand, GCPL, while having a strong portfolio of brands, may struggle to maintain its growth pace due to intense competition and pricing pressure. Nevertheless, even GCPL has its strengths, such as its Amway and Pulse confectionery businesses, which can continue to perform well.

Despite the challenges, these strategic picks offer attractive long-term opportunities for investors. Their diversified business models, strong brand presence, and ability to adapt to changing consumer preferences will help them navigate the tough landscape and emerge stronger. As such, investors should consider these companies for inclusion in their portfolios.

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