ITC, formerly the Indian Tobacco Company, is India’s largest cigarette company. Founded in 1910, it is regarded as one of India’s bluest blue-chip companies, and ranks among the top 15 Indian companies by market capitalisation. It is cash-rich and profitable, diversified, and professionally run. Its distribution network, which touches around six million outlets, is enviable, to say the least. Its business is defensible by moats, and it pays regular dividends.

A look at its shareholder returns over the years, however, does not bear this out. ITC has not kept up with the broader markets or peers. Over the last five-year period, market index BSE Sensex has seen returns, in absolute terms, of around 85%.

AUTHOR

Daljit Kochhar

Daljit is the founder of KT Advisory, a boutique strategy consulting and investment banking practice based in New Delhi. He has effectively counselled executive boards at multinational companies, operated and led change in a logistics business with a revenue stream more than US$ 2 billion, guided family run businesses towards institutional funding; and conceptualized and delivered real estate projects. Daljit is a keen distance/ marathon runner and a wannabe (barbeque) pitmaster.

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