ITC Confirms Andhra Pradesh as Next Investment Destination Amid Strong FY25
Sanjiv Puri signals fresh commitment at CII Summit as ITC reports ₹19,727 crore net profit and eyes state-led growth
New Delhi/Amaravati — Diversified conglomerate ITC Limited is placing its next major bet on Andhra Pradesh, a move officially confirmed by its Managing Director Sanjiv Puri at the CII Annual Business Summit 2025. The announcement, made in the presence of Chief Minister Chandrababu Naidu, signals not just fresh capital infusion into the state but also a renewed faith in its policy ecosystem.
“The next investment we make will be in Andhra Pradesh — and you will hear about it very soon,” Puri said, addressing Naidu directly at the summit’s closing session. His tone was clear: this wasn’t just about numbers. “We’ve witnessed your performance in the past, and we’re seeing the pace of transformation now. That’s what’s given us the conviction to move forward.”
The statement was met with a visible nod of agreement from the Chief Minister, who has been courting big-ticket investments as part of his Swarna Andhra Vision 2047. The roadmap is an ambitious one — positioning Andhra as a national hub for manufacturing, logistics, innovation, and infrastructure development.
A Year of Strength in Volatile Conditions
The timing of ITC’s commitment couldn’t be more telling. FY25 has been a year of steady resilience for the Kolkata-headquartered firm. Despite a tough consumption environment, price-sensitive rural markets, and a growing share of regional competitors in the FMCG space, ITC has managed to hold its ground.
Gross revenue from continuing operations stood at ₹73,464 crore, with EBITDA crossing the ₹24,000-crore mark. A sizeable chunk of its bottom line — ₹15,129 crore — came from a one-time gain after the long-awaited demerger of its hotel vertical. Still, even without that boost, core profit grew to ₹5,155 crore, up by a modest 3% year-on-year.
Revenue traction in the cigarette segment, still the company’s highest-margin contributor, rose 6% to ₹9,228 crore. Meanwhile, its non-cigarette FMCG division clocked ₹5,494 crore — a 3.7% growth during a period when discretionary spending remained under pressure.
But the real standout was ITC’s agri-business, which expanded nearly 18% to ₹3,649 crore. Exports of staples like wheat and rice, coupled with better realisations in value-added produce, helped drive that number.
Investors Take a Breather
Despite the strong showing, ITC shares dipped 2% on the day of the earnings release, closing at ₹425.5. Analysts described the movement as routine profit-booking, rather than a signal of structural concern.
“The numbers are solid. But the street had already priced in the demerger upside,” said a senior analyst at a Mumbai-based brokerage. “What will matter now is execution — both on ITC’s FMCG ambitions and how it leverages its upcoming investment in Andhra.”
That investment, though not yet detailed, is expected to fall within ITC’s core verticals — likely FMCG manufacturing, paper and packaging, or agri-infrastructure. The company already operates paperboard facilities in the region and has deep sourcing networks across the state’s agrarian belts.
A CM’s Strategic Pitch
At the same summit, CM Naidu outlined Andhra’s multi-decade vision to emerge as an industrial powerhouse. From announcing 175 industrial parks to pushing ahead with the completion of Amaravati’s first phase — including an international airport — his pitch was precise: Andhra Pradesh is open for business.
“This is the right time to invest in India’s development story, and Andhra will be its engine,” Naidu declared. The state, he added, would prioritise “industrial resurgence, innovation-led transformation, and inclusive economic development.”
It was more than just optics. Andhra has already seen interest from global data centre companies and renewable energy majors in recent months. With ITC now formally on board, momentum could shift further in the state’s favour.
Why Andhra, Why Now?
From ITC’s vantage point, the move is both strategic and symbolic. Southern India continues to be a key growth driver for its FMCG and personal care lines. At the same time, rising logistics costs and the need for hyperlocal distribution have made state-level investments more compelling than pan-national expansions.
There’s also the track record. The company’s previous investments in Telangana and Tamil Nadu have yielded stable operational performance, particularly in rural-centric product lines. With Naidu returning to power and pushing a pro-reform agenda, Andhra now sits firmly on the radar.
“Execution is everything,” remarked a senior official familiar with the deal contours. “But there’s no question that the decision to invest reflects confidence in both the policy direction and the market potential of the state.”
What Lies Ahead
As it looks beyond FY25, ITC faces a dual challenge — defending margins in its traditional businesses while scaling up high-growth segments like foods, personal care, and agri-tech. Its bet on Andhra Pradesh, if successful, could become a case study in regional-led manufacturing scale-up.
What happens next will depend on how quickly the project is rolled out and whether it opens up allied investment opportunities — for vendors, logistics players, and ancillary sectors.
For now, though, the signal is clear: one of India’s largest and most diversified conglomerates sees Andhra Pradesh not just as a geography, but as a growth partner.
Credit: NDTV Profit
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Nikhil Singh Sumal is a self-taught entrepreneur, investor, and CMO at Growth Jet Media. He brings all-round expertise in branding, startups, and digital growth. At Hindustan Herald, he decodes business trends and marketing strategy with clarity, sharp insight, and a forward-thinking perspective.
- Nikhil Singh Sumalhttps://hindustanherald.com/authors/nikhil/
- Nikhil Singh Sumalhttps://hindustanherald.com/authors/nikhil/
