What is Brief History of ITC Company?

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What is the history of ITC?

ITC's journey began in 1910 as the Imperial Tobacco Company of India Limited, established in Kolkata. Initially focused on meeting India's demand for tobacco products, it grew significantly over the decades.

From its beginnings in tobacco, ITC has strategically diversified, becoming a major player in multiple sectors. This evolution reflects a commitment to adapting and expanding its business footprint across the Indian economy.

The company's transformation is a testament to its ability to navigate market changes and societal expectations, leading to its current status as a diversified conglomerate.

ITC's extensive portfolio includes FMCG, hotels, paperboards & packaging, agri-business, and information technology. Its FMCG segment, which includes popular brands, has made it a significant force in the Indian market, with its ITC BCG Matrix analysis showing strong performance across various product categories.

The ITC company history began on August 24, 1910, in Kolkata, India, as the Imperial Tobacco Company of India Limited. Established as a British-owned entity, it aimed to capitalize on India's tobacco resources and growing consumer demand.

The Genesis of ITC Limited

ITC Limited, originally the Imperial Tobacco Company of India Limited, was founded on August 24, 1910, in Kolkata. Its establishment marked the entry of a British-owned private limited company into the Indian market, succeeding entities like Imperial Brands and W.D. & H.O. Wills.

• Founded as Imperial Tobacco Company of India Limited on August 24, 1910.
• Established in Kolkata, India, during the British colonial era.
• Initial focus on importing and distributing cigarettes in India.
• Recognized the opportunity in India's vast tobacco-growing regions.

The early years of the Indian Tobacco Company history were characterized by strategic moves to build a domestic presence. In 1912, the company established the 'Indian Leaf Tobacco Development Company Limited' in Guntur, Andhra Pradesh, fostering partnerships with local farmers for leaf tobacco sourcing. This was followed by the establishment of its first cigarette factory in Bangalore in 1913, a significant step towards reducing import reliance and strengthening its manufacturing capabilities within India. The company's headquarters, 'Virginia House' in Calcutta, commenced construction in 1928, symbolizing its growing footprint. Further expansion occurred in 1953 when ITC acquired the manufacturing business of Tobacco Manufacturers (India) Limited and the lithographic printing business of Printers (India) Limited. This period of growth and integration culminated in the company's conversion to a Public Limited Company on October 27, 1954, marking a pivotal moment in its Brief History of ITC.

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ITC's early trajectory was defined by its dominance in the tobacco sector, solidifying its market leadership by the mid-20th century. Recognizing the need to broaden its horizons beyond tobacco, the company initiated a strategic diversification in the 1970s.

Consolidating Tobacco Dominance

In its nascent stages, ITC focused on establishing a strong foothold in the tobacco and cigarette markets. By the mid-20th century, it had successfully positioned itself as a leading player in these segments.

Strategic Name Changes and Diversification Signals

The company's intent to move beyond tobacco was underscored by significant name changes. It transitioned from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in May 1970, and subsequently to ITC Limited on April 1, 1974.

Entry into Hospitality and Paperboards

The 1970s proved to be a pivotal decade for transformation. ITC ventured into the hospitality sector in October 1972, launching its first hotel, ITC Chola (now ITC Grand Chola), in Chennai in 1975. Further diversification occurred in 1979 with the establishment of ITC Bhadrachalam Paperboards Limited, marking its entry into the paperboards business.

Expansion in the 1980s and 1990s

The 1980s saw ITC expand its presence in the paper and packaging industry and establish a foothold in agri-business, focusing on commodity exports. The 1990s continued this momentum with ventures into FMCG and information technology, alongside new cigarette brand launches. By 1998, ITC had approximately 105 subsidiaries.

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The ITC company history is marked by strategic expansion and adaptation. Beginning its journey, the company underwent significant diversification in the 1970s, venturing beyond its initial tobacco focus into sectors like hotels, paperboards, and agri-business. This evolution continued with a strong push into the Fast-Moving Consumer Goods (FMCG) sector in the early 2000s, introducing popular brands and expanding its product portfolio. The company's journey from its founding to the present day reflects a consistent effort to innovate and grow across various industries.

ITC's innovation is evident in its proactive approach to business development. The e-Choupal initiative, launched in 1990, revolutionized farmer engagement through technology. More recently, the company has focused on product innovation within its FMCG segment, introducing eco-friendly paper products and expanding into new consumer categories.

e-Choupal Initiative

Launched in 1990, this program leveraged technology to create a direct interface with rural farmers, providing them with information and resources to improve their agricultural practices and livelihoods.

FMCG Expansion

The early 2000s saw a significant push into branded foods, with the introduction of popular brands like 'Aashirvaad', demonstrating a strategic move to capture market share in the consumer goods sector.

Product Diversification

Innovations extended to product development, such as the eco-friendly 'Paperkraft Premium Business Paper' launched in 2008, and entry into niche markets like fairness creams in 2010.

Strategic Acquisitions

Recent acquisitions, like that of Sunrise Foods in 2020 and Sresta Natural Bioproducts in 2025, underscore a continued strategy of strengthening existing business verticals and expanding market reach.

Sustainability Focus

The company's commitment to sustainability is a core aspect of its operations, achieving carbon-positive, water-positive, and solid waste recycling-positive status for nearly two decades, with 52% of energy sourced from renewables as of July 2025.

Plastic Neutrality

Maintaining plastic neutrality for the past four years, the company has demonstrably managed environmental impact by collecting and sustainably processing significant volumes of plastic waste, including 76,000 tonnes in FY 2024-25.

Despite its successes, the company has faced challenges, including navigating competitive market landscapes and adapting to evolving consumer preferences. The company has also experienced some margin pressure, with operating profit margins falling to 37.9% in FY25 from 40.4% in FY24, and net profit margins declining from 32.0% in FY24 to 31.2% in FY25.

Competitive Pressures

The company consistently faces competition across its diverse business segments, requiring continuous strategic adjustments to maintain market share and profitability.

Margin Management

Recent financial data indicates margin pressures, with operating profit margins declining in FY25, necessitating a focus on cost management and portfolio premiumisation to counter these trends.

Market Shifts

Adapting to changing consumer demands and market dynamics is an ongoing challenge, requiring the company to remain agile in its product development and marketing strategies.

Regulatory Environment

Operating in multiple sectors means navigating various regulatory frameworks, which can present complexities and require ongoing compliance efforts.

Economic Fluctuations

Like any large conglomerate, the company's performance can be influenced by broader economic conditions, requiring resilience and strategic financial planning to mitigate risks.

Integration of Acquisitions

Successfully integrating newly acquired businesses, such as the recent acquisitions in the paper and natural products sectors, presents operational and strategic challenges to realize synergies.

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The ITC company history is a narrative of strategic evolution, transforming from its origins as a tobacco manufacturer to a diversified conglomerate. This journey is marked by significant milestones that reflect its adaptability and growth in the Indian market.

Sustainability Goals

ITC is committed to achieving Net Zero emissions by 2050, aiming for over 85% emission reduction in 25 years. Renewable energy usage currently stands at 52% of total energy requirements.

Packaging and Agriculture Initiatives

By 2028, the company aims for 100% of its packaging to be recyclable, reusable, compostable, or biodegradable. Biodiversity programs are set to reach 1 million acres by 2030, with Climate Smart Agriculture coverage expanding to 4 million acres by the same year.

Financial Performance and Outlook

Analyst predictions for ITC's share price in 2025 range from ₹420 to ₹530, with targets up to ₹580.69. For 2030, forecasts are between ₹1,200 and ₹2,000, driven by diversification and sustainability efforts.

Strategic Drivers

The company's strategy includes offering cigarettes at various price points and expanding its premium FMCG portfolio. ITC's Q4 FY25 net profit reached ₹19,727.37 crore, significantly influenced by an exceptional gain from its Hotels Business demerger, reflecting its resilient and diversified enterprise vision.

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