ITC Chairman Sanjiv Puri has announced a long-term goal to expand the company's FMCG business market to $8 trillion by 2035. This strategy focuses on higher-value products and innovation to drive future growth. Investors are observing this shift as the company seeks to improve its non-cigarette segment profitability, even as the stock faces recent valuation pressure.
ITC is aiming for a major transformation in its business structure by targeting a $8 trillion market size for its Fast-Moving Consumer Goods (FMCG) segment by 2035. During the latest annual general meeting, Chairman Sanjiv Puri outlined a roadmap that emphasizes moving toward higher-value products, innovative launches, and deeper reach into rural markets. This strategic focus is designed to reduce the company's historical reliance on its core cigarette business, which currently accounts for nearly half of its total revenue.
Financial Context and Market Performance
Despite the long-term vision, ITC’s stock has faced significant pressure during 2026. As of July 30, 2026, the company’s market capitalization stood at $2.74 trillion, with the share price trading at $285.05. This represents a decline of 22% year-to-date and a 46% drop from its peak price of $528.50 recorded in September 2024.
Financially, the FMCG-Others segment serves as a key pillar for future growth, contributing roughly 30% of total revenue. In the 2026 financial year, this segment reported revenue growth of approximately 10%, reaching $24,200 crore. While the business has established itself as India's second-largest FMCG player behind Hindustan Unilever Limited, its profit margins present a different picture. The segment's operating profit margin, or EBITDA margin, sits at approximately 11%, which is lower than many major FMCG peers. This gap suggests that while the company has achieved scale, improving profitability remains a critical task for the management.
Investor Monitorables and Risks
For investors, the primary debate revolves around whether the FMCG expansion can eventually outweigh the steady but slower-growing cigarette business. Analysts from brokerage firms suggest that ITC remains a defensive holding due to its history of strong dividend payments and consistent cash generation. However, they also caution that a major change in the stock's valuation, or re-rating, will likely depend on the company's ability to consistently increase margins in the FMCG division while maintaining stability in the cigarette segment.
The core challenge lies in execution. Moving toward higher-value products in a highly competitive market requires sustained capital spending and effective brand building. Investors will be tracking quarterly reports for signs of consistent margin improvement and evidence that the FMCG segment is gaining efficiency. The path to 2035 will be measured by how effectively the company balances these new investments without putting pressure on its overall cash flow or return on equity.