ITC is building a Nicotine producing plant near Mysore using its own Subsidiary ITC Indivision. This factory will produce pure nicotine that may go in to the vaping products of BAT, Altria or PM. If govt. allows vaping, I don’t see any danger as ITC is anyway ready with such. My views shared here on cigarettes shared here.
Also KT & G a fast growing company in HnB segment.
In india cigarette sales growth happens not because we will have more smokers but the move from illegal cigarettes to legal once ( as taxes where super high that lead to lots of smuggling ). Illegal cigarettes still command a large market size.
Any data to support such arguments ? FMCG EBITDA margin reached 10 % last quarter and revenue growth in FMCG is strong. In fact I am glad that management stuck to its long term vision ( Building ICML’s across the country ) and did not deviate from the path just because market did not value them or people repeatedly told them that their capital allocation is not correct.
Opposite views ( with data) is very welcome.
Discl: Allocation is same as my last post. No buy/sell transactions last 30 days.
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