ITC Chairman, Sanjiv Puri, is optimistic about rural demand going forward. In conversation with CNBC-TV18 on the sidelines of the Vibrant Gujarat Curtain Raiser event, the President-designate of industry body CII said, rural demand is much better, and green shoots are visible.

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“As far as the rural situation is concerned, given that the monsoon was better in September, I think the situation is much better. We are already seeing some green shoots of pickup," he said. The festivities should also help, he added.

Read Here | ITC's Sanjiv Puri foresees improved margins and green shoots in rural demand

Puri said the company commissioned five manufacturing facilities last year and three more are in various stages of construction. He expects one of these facilities to be inaugurated within the next 12 months. "We continue to invest and this is just an example to say investment is happening,” he noted.

Puri added that the CII's Business Confidence surveys have indicated a sense of optimism in the business community. Capacity utilisation rates are above 75%, which bodes well for the introduction of new capacity and further growth, he pointed out.

Puri also emphasized that various macroeconomic factors are currently conducive to increased investment. The government has implemented several purposeful policy interventions, and there is ample liquidity available, he said. Corporate income tax has been rationalised over time, creating a more favorable environment for business growth and investment, he added.

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While acknowledging the challenges for certain sectors due to global factors, Puri highlighted that the domestic economy continues to perform well.

“What is weighing on some of these sectors is certainly the global situation where there is a significant compression of demand and exports are under pressure," he said.

Analysts expect the fast-moving consumer goods segment to post modest volume growth in the second quarter. But they don't rule out a margin expansion due to subdued material costs and efficient input cost management by companies.

Shares of ITC were trading flat today at Rs 448.65. The stock has gained 34% so far this year.

(Edited by : Shweta Mungre)

First Published:Oct 11, 2023 3:33 PM IST