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ITC comes out blazing

ITC comes out blazing

strategic moves across its portfolios could pay off in the markets
November 30, 2021
5 min read
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ITC comes out blazing

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the devastating pandemic has affected the lives of virtually everyone on the planet, and forced them to confront some of their worst fears. for some, it was being confined to their homes even if for their own safety, while for others it was needles when they had to receive their vaccinations. now, an Indian conglomerate is trying to make sure it can help people avoid at least the latter. The Life Sciences and Technology Centre of ITC, India’s de facto favourite meme stock, has developed a nasal spray for Covid-19 prevention. 

while it’s still in the stage of clinical-trials, it represents one of many moves that the tobacco-to-hospitality giant is now making.

in the nick of time

ITC’s innovation comes at a time when the pandemic is slowly becoming a matter of grave concern again. the number of infections are on the rise in central Europe, where Austria and Slovakia have reimposed nationwide lockdowns while Germany contemplates the same. several countries such as the UK, France, Sweden, the US, and Portugal have also rolled out booster shots (third dose) of the vaccination for their residents. the situation in India is a bit more optimistic, with AIIMS chief Randeep Guleria stating booster shots might not be necessary here.

but if such a need or a similar requirement does arise, ITC’s nasal sprays could come very handy. not only are they a boon to those averse to needles, they also eliminate the hurdles of booking an appointment and visiting a medical professional. of course, this is subject to a successful outcome of the clinical trials.

firing on all fronts

The Rs 2.76 lakh crore (market cap) behemoth has plenty of other tricks up its sleeve. after the lull during the peak of the pandemic, ITC Hotels is adopting an aggressive approach to rolling out new properties. earlier this year, there were strong rumours that ITC might spin out its hospitality business, potentially addressing a long-standing demand from its investors. however, it looks like a different division is more likely to be hived off first, with reports claiming ITC is looking to spin out its IT services business, ITC Infotech. that alone might garner a valuation of Rs 25,000 crore, if publicly listed. 

with all these moves, it might be easy to forget that ITC’s main focus now is on its FMCG business, as it looks to move away from its dependence on tobacco products. it is India’s second-largest FMCG company, behind HUL, and both are on a spree of price hikes to improve their margins as input costs spike. ITC is also continuing its acquisition spree by picking up a 16% stake in D2C Ayurvedic and natural personal care brand ‘Mother Sparsh’.

Draco Dormiens Nunquam Titillandus is the motto of the (fictional) Hogwarts School — never tickle a sleeping dragon. have all the incessant memes finally succeeded in waking up the dragon that has been snoozing in the stock market?