Imagine building the country's second-largest FMCG empire, being debt-free and profitable, and still under-performing the wider market by a country mile. Many reasons have been offered for ITC's general under-performance. Its production of sin goods, chief among them. It's also been the victim of a decades-long conflict between its two largest shareholders, which stifled the conglomerate's ability to seize lucrative opportunities.
Then there's the conglomerate discount—where a stock market looks at a diversified group of businesses and values it at less than the sum of its parts.
It's why, over the last few years, we've seen a slew of conglomerates—most notably Reliance—looking to "unlock value" by spinning out group businesses into standalone ones.
For ITC, this isn't an option for the most part. It seeks synergies in capital allocation and supply chains from its conglomerate structure. The exception to this is ITC Infotech, the protagonist of today's articles at www.multimediastudio.net
ITC Infotech has grown up in the shadows of its siblings. Despite being birthed in the early 2000s, it largely missed the software boom that produced many Indian IT giants over the last two decades. And, for most of its existence, its performance was middling at best.
Today, however, the company—which counts Microsoft as a client—is going from strength to strength. Between March 2019 and 2021, its consolidated revenue rose 22% to $327 million, while its net profit quadrupled to $60 million. This growth has carried on into the present day, even evoking calls for it to list publicly. How ITC Infotech did this and what its public market prospects are is the subject of our story today.
