Q2 FY 2020/21 Results 6th November, 2020 Forward‐Looking Statements This presentation contains certain forward‐looking statements including those describing the Company’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain assumptions of future events over which the Company exercises no control. Therefore there can be no guarantee as to their accuracy and readers are advised not to place any undue reliance on these forward looking statements. The Company undertakes no obligation to publicly update or revise any forward‐ looking statements, whether as a result of new information, future events, or otherwise. These statements involve a number of risks, uncertainties and other factors that could cause actual results or positions to differ materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various businesses in the Company’s portfolio, changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain high quality human resource. 2 Daily Covid cases rose sharply in Aug & Second Wave in Europe & USA Sep’20; sharp fall in Oct’20 India : New Cases – Moving 7‐day Average (‘000s) Global : New Cases – Moving 7‐day Average (‘000s) 100 17 Sep’20 160 90 Daily New Cases – 97,894 140 80 7 Day Average – 93,199 120 70 100 60 80 50 60 40 40 30 20 20 10 0 0 01‐Jul‐20 15‐Jul‐20 29‐Jul‐20 India USA Europe 03‐Jun‐20 17‐Jun‐20 07‐Oct‐20 21‐Oct‐20 08‐Apr‐20 22‐Apr‐20 09‐Sep‐20 23‐Sep‐20 12‐Aug‐20 26‐Aug‐20 04‐Nov‐20 11‐Mar‐20 25‐Mar‐20 06‐May‐20 20‐May‐20 Spain, UK, Germany re‐impose lockdown States : Active Cases as on 2 Nov’20 Maharashtra West Bengal Kerala Karnataka Tamil Nadu 1,25,762 89,783 50,611 36,761 20,994 Mar’20Jul’20 Sep’20 Nov’20 Mar’20 Jul’20 Sep’20 Nov’20 Mar’20 Jul’20 Sep’20 Nov’20 Mar’20 Jul’20 Sep’20 Nov’20 Mar’20 Jul’20 Sep’20 Nov’20 3 Industry: Sequential improvement Core Sector, Services remain under pressure but well below pre‐Covid levels Manufacturing and Services PMI expand in Oct’20 Index of Industrial Production (YoY %) Eight Core Industries (YoY %) India Manufacturing PMI 10 .0 6.4 10 2.2 5.2 5.0 2.2 0 58.9 0.0 56.8 55.354.5 ‐10 52.7 ‐5.0 ‐0.8 50.651.2 51.8 52.0 ‐8.0 ‐10.0 47.2 ‐20 ‐10.8 46.0 ‐15.8 ‐15.0 ‐8.6 ‐8.0 ‐7.3 ‐30 ‐18.7 ‐20.0 ‐12.4 ‐40 ‐33.4 ‐25.0 ‐21.4 ‐30.0 30.8 ‐50 27.4 ‐35.0 ‐60 ‐40.0 ‐57.3 ‐45.0 ‐70 ‐37.9 Nomura India Normalization Domestic Air Passenger Railway Passenger Bookings India Services PMI Index ‐ Services Traffic (YoY%) (Mln) 9.8 90.0 84.9 55.557.5 81.3 1.5 80 0 715 52.753.3 54.1 80.0 676 49.2 49.8 70 0 70.0 41.8 60 0 49.3 60.0 33.7 34.2 50 0 441 50.0 40 0 41.3 ‐32.9 40.0 28.7 30.5 30 0 30.0 25.4 12.6 19.9 20 0 20.0 10 0 39 5.4 8.9 4 15 22 10.0 3.3 ‐75.8 0 ‐82.6 0.0 ‐83.5 ‐100 ‐8 ‐4 ‐99.9 ‐97.4 Jul‐20 Jan‐20 Jun‐20 Oct‐20 Oct‐19 Jan‐20 Feb‐20 Mar‐20 Apr‐20 May‐20 Jun‐20 Jul‐20 Aug‐20 Apr‐20 Feb‐20 Sep‐20 Dec‐19 Aug‐20 Nov‐19 Mar‐20 May‐20 4 Aggregate Demand remains Supply side relatively better significantly below pre‐Covid Levels Aggregate Demand Aggregate Supply 99.6 93.4 91.7 84.5 86.8 85.6 79.6 76.8 82.1 81.1 67.8 70.5 71.8 56.6 50.6 43.1 47.3 20.0 Nomura estimates Aggregate Demand at 77% and Aggregate Supply at 92% of pre‐COVID levels Source: Nomura India Normalisation Index 5 Agri Sector remained resilient Good monsoon & Govt. interventions …but constitutes only ~15% of GDP boost Rural economy Monsoon Map (Surplus / Deficit % of LPA) Kharif Sowing up 6% Kharif Sowing (as on 11th September 2020) Lakh hectare Crop 2020‐21 SPLY Y‐o‐Y Growth Rice 402.3 373.9 7.6% Pulses 137.9 131.8 4.6% Coarse Cereals 179.7 177.4 1.3% Oilseed 196.0 176.9 10.8% Sugarcane 52.5 51.8 1.4% Cotton 129.3 126.6 2.1% Jute & Mesta 7.0 6.9 1.6% Total 1104.5 1045.2 5.7% Paddy Procurement Tractor Sales (YoY%) (Kharif Marketing Season YTD 30th Oct) 25 0. 0 74.7 197.2 20 0. 0 38.5 159.8 21.3 22.4 28.3 15 0. 0 23.4% 4.8 4.0 10 0. 0 50 .0 ‐49.9 0.0 ‐79.4 +9% surplus for season of 2020 KMS 2019‐20 KMS 2020‐21 6 Downward revisions to FY21 GDP estimates FY21 GDP Forecast in Mar'20 in Jul'20 post Aug'20 Citi SBI Research Bank of America ICRA ‐3.5 ‐4.0 ‐5.0 ‐5.0 ‐6.0 ‐6.8 ‐7.5 ‐8.0 ‐9.5 ‐10.9 ‐11.0 FY21 GDP de‐growth estimated at ~10% 7 Agile in Adversity ITC’s Strategic Responses ‐ Covid 19 Compassionate in Crisis Business Continuity & Agility & Innovation Alternative Channels of Managing Rapid Bounce‐Back in Execution Distribution Uncertainty & Risk . Rapid capacity ramp up (Sanitizers . Rapid scale up of Direct‐to‐ . ITC Store on Wheels; Serviced . Shortened demand 100x, Handwash 4.4x, Savlon Soaps Customer/Market shipments 800+ residential societies in top planning cycles 4.6x) from factories markets . Data Analytics . Online‐ordering system for . Partnerships with Domino’s, . Augmented direct distribution . Focus on fewer SKUs retailers Dunzo, Swiggy & Zomato & Higher Value packs . Enhanced focus on Rural / Stockist . ITC e‐store leveraged for direct channel . Telecalling & WhatsApp based . Flexi Manufacturing to consumer order taking from retailers plans / small run sizes . High focus on fulfilling demand in Top outlets, Modern Trade & ECom . Availability scaled up in . Sharp focus on cost grocery channel ; stockist management and cash . Presence scaled up in Chemist network augmented conservation outlets . Safety & Hygiene protocols across all nodes of operations . Work from Home enabled across the Company . Senior Management engagement with employees on regular basis . E‐Learning for upskilling & knowledge enhancement 8 Contributing to the Fight Against Covid Contribution to Covid Relief Food Products to the needy Saluting Frontline Warriors 215 Cr. Contingency fund set up; over 80% deployed https://www.itcportal.com/about‐itc/shareholder‐value/pdf/lodr26062020‐d.pdf 9 Q2 FY21 Results Headline Financials & Business Highlights 10 Key Highlights: Q2 FY21 . Strong Sequential recovery across segments; localised lockdowns weighed on recovery momentum ‒ Gross Revenue & PBT up 26% & 37% sequentially ‒ Gross Revenue up 1.2% & PBT down 11% y‐o‐y . FMCG‐Others Segment delivers strong growth ‒ Highest ever quarterly sales for all FMCG businesses except ESPB ‒ Comparable Revenue up 18.4%^ • Staples, Noodles posted robust growth; Snacks staged a smart recovery • Savlon on course to achieve Rs. 1000 crores consumer spend in FY21 ‒ Over 70 innovative products launched in H1 – hygiene, health & wellness, naturals, convenience ‒ Segment EBITDA up 66% to Rs. 366 crores; EBITDA Margins up 300 bps to 9.7% ^Excluding Lifestyle Retailing Business (LRBD) (restructuring underway) & Education and Stationery Products Business (ESPB) (impact of closure of educational institutions). 11 Strong sequential recovery Robust performance by FMCG Others EBITDA Growth 70 % Revenue Growth* PBT Growth 60 % 50 % 40 % ITC 30 % 26% 20 % Overall 10 % 0% ‐10% ‐3% Vs. Q2 FY20 Vs. Q1 FY21 Revenue Growth^ EBITDA Growth EBITDA Margin FMCG ‐ Others * Net Revenue, ^ Excl. ESPB and LRBD 12 FMCG Others Q2 FY21 FMCG Industry Trends . Essential products & ‘at‐home’ consumption witnessed moderation; remain at elevated levels . Strong traction continued for Hygiene products . Discretionary and Out‐of‐Home consumption categories witness recovery ‒ Snacks regain traction with increased mobility ‒ Sequential improvement in Deos, Confectionery & Juices; still significantly below pre‐Covid levels . Clear preference for ‘contactless shopping’ and home delivery ‒ Huge spurt in Online shopping; robust growth in e‐Commerce channel (ITC Sales more than doubled) ‒ Increasing digital adoption by Traditional Trade ‒ Modern Trade footfalls lower as consumers prefer neighbourhood/e‐Com stores 14 Rural > Urban FMCG industry trends Traditional Trade > Modern Trade Base Period=100 Lockdown 3 & 4 Unlock 1.0 Unlock 2.0 Unlock 3.0 Unlock 4.0 Dec + Jan + Feb 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Overall FMCG Value Index 100 75 98 106 94 100 117 109 108 104 100 Market Index 100 84 100 92 9595 92 88 69 Rural Urban Channel Index Traditional Trade 100 74 100 109 95 101 Modern Trade 100 78 78 81 81 86 Source: Nielsen 15 FMCG Others Strong growth in Segment Revenue • Segment Revenue up 18.4%* on comparable basis − Atta, Noodles, Personal Wash & Hygiene/Sanitizing products, Floor Cleaner, Matches & Agarbatti posted strong growth − Relatively subdued performance in Confectionery, Soaps, Bodywash and Deos Staples, Convenience Foods, Discretionary / Health & Hygiene Products Hygiene OOH +25% -2% Q1: +34% Q1: -25% *Ex ESPB & LRBD c.