ITC's Deliberate Approach in India's Booming Personal Care Sector
While India's personal care market experiences unprecedented growth and competitors rush to acquire venture capital-backed brands, ITC Ltd is charting a distinctly cautious path. The company's measured acquisition strategy stands in stark contrast to industry peers who are aggressively snapping up digital-first brands across premium niches.
A Strategy Focused on Trust and Long-Term Value
Sameer Satpathy, divisional chief executive of ITC's personal care products business, emphasized the company's deliberate approach in a recent conversation. "The headroom to grow in personal care categories is enormous," Satpathy noted, while adding a crucial caveat: "Some new brands enter categories but not everyone is able to sustain their presence."
This philosophy explains ITC's selective investment pattern. Unlike listed rivals such as Hindustan Unilever and Marico, who have been actively acquiring independent brands, ITC has focused on strategic, trust-led categories where established brands create natural competitive advantages.
Selective Investments in Niche Segments
ITC's recent personal care investments have been remarkably focused:
- Baby care brand Mother Sparsh, where ITC has been investing in tranches since 2021
- Mylo, an app offering content and products for expecting and new mothers, in which ITC acquired a 10% stake for just under ₹40 crore in 2022
The company's approach to acquisitions follows clear strategic parameters. "When we acquire a brand, the question is—can we give it that time and attention it needs?" Satpathy explained. "You also have to be clear why you are buying something. Is it for control, or because the acquired brands are in white spaces with unique strengths in the areas where we may not have adequate bandwidth or the capabilities?"
ITC consistently chooses the latter strategy, seeking brands that complement existing capabilities rather than simply expanding portfolio size.
Baby Care: A Trust-Based Category with Natural Moats
ITC's investment in Mother Sparsh exemplifies this strategic thinking. "Baby care is a category which works on extreme trust and to get consumer trials is difficult," Satpathy noted. "So a scaled business here is very valuable as it has a natural moat, in a very high margin category."
The numbers support this approach. As of FY25, Mother Sparsh reported revenues of just under ₹100 crore, representing more than six-fold growth from FY21. ITC has committed ₹126 crore to fully acquire the company, demonstrating significant confidence in this trust-based segment.
Contrast with Aggressive Competitors
ITC's restrained strategy stands in sharp contrast to competitors' approaches:
- Marico's digital brands portfolio has crossed ₹1,000 crore in revenue and is growing at a 25% CAGR, with premium personal care now accounting for 16–17% of consolidated sales
- Hindustan Unilever spent just over ₹2,700 crore last year to acquire skincare brand Minimalist in one of the largest exits for founders of an independent Indian brand
These aggressive moves highlight the competitive intensity in India's personal care market, which was estimated at $21 billion in 2023 and is projected to reach $34 billion by 2028, growing at 10–11% CAGR overall with online channels expanding at about 25% CAGR.
Performance Metrics and Market Position
Despite its cautious approach, ITC has achieved notable success in specific segments:
- E-commerce platforms now contribute 25% of the personal care division's total sales
- Premium brands account for about 43–44% of the portfolio by value
- Savlon, one of ITC's largest personal care brands, is estimated at about ₹1,000 crore in consumer spends
- Engage ranks second in the fragrances market, behind Vini Cosmetics' Fogg
Satpathy highlighted the company's dual growth strategy: "We now have two distinct levers of growth—top of the pyramid and the bottom of the pyramid. With recent reduction in GST rates, a far-sighted reform by the government, both engines should now fire."
Financial Context and Business Performance
ITC's FMCG (Others) business—which includes food and personal care—reported revenues of ₹11,859.56 crore in the first half of FY26 and ₹22,015.12 crore in FY25. This performance occurs against the backdrop of recent challenges, including additional excise duties on cigarettes that have pressured the company's stock price.
Interestingly, ITC's cautious stance in personal care contrasts sharply with its food division's aggressive acquisition strategy, which saw stakes purchased in meat brands Prasuma and Meatigo and the acquisition of organic staples brand 24 Mantra for ₹472.5 crore last year alone.
Analysts have noted that despite the cigarette business challenges, ITC's other FMCG segments continue to develop, with food contributing more value than personal care to the overall business valuation.
This measured approach in personal care acquisitions reflects ITC's broader philosophy of building sustainable value through strategic investments rather than rapid expansion, positioning the company for long-term success in India's increasingly competitive personal care landscape.
