Y.C. Deveshwar on Scale Economics

Open Magazine's obituary frames Deveshwar as a nationalist and stalwart of sustainable business. Across two decades of leadership (1996-2017), ITC's revenue grew ten-fold from Rs 5,200 crore to Rs 51,500 crore, while shareholder returns compounded at 23.3% per year. The market capitalization at the end of FY2015-16 stood at $45 billion — almost 50 times the market value in 1996 —.

In 1985, ITC's platinum jubilee year, turnover was about Rs 800 crore with profit near Rs 8 crore. By 2010, Deveshwar tells Wharton, turnover had crossed US$6 billion with profit above US$900 million. The math implies a near-eight-fold dollar-turnover expansion in 25 years and a profit pool that grew by over 500x —.

On FMCG, Deveshwar tells Wharton the sector was expected to triple to over US$80 billion by 2018. ITC's foray blends internal competencies — sourcing, branding, trade marketing, distribution, manufacturing — with emerging opportunities.

Paper and packaging, Deveshwar notes, are an under-penetrated Indian market — per-capita consumption around 5 kg per year, against nearly 300 kg in the U.S., 200 kg in the U.K. and 45 kg in China. With education and economic growth expected to drive manifold demand, ITC invested significantly in capacity in this business. The growth of branded consumer goods would, in turn, drive packaging demand —.