Key Points
The demerger of the hotels business of ITC Limited into a separate entity will boost the capital efficiency ratios of the diversified conglomerate, equity analysts said on Monday..
It will boost the return on capital of ITC and its capital efficiency ratios will go up by almost 20 percentage points," IIFL analyst Nemkumar said...
Another analyst said that the demerger process will unlock the value for the shareholders by giving them direct stake in the new entity and help in sharper capital allocation policy as outlined in the asset-right strategy of 'ITC Next'...
"With ITC holding 40 per cent in the demerged hotels business, it will provide stability to the new entity while continuing with the focussed vision to improve margins, profitability and competitiveness of the company's businesses..
This move also demonstrates the intent of its chairman Sanjiv Puri's 'ITC Next' strategy, which redefines investments for future growth with sharper capital allocation policy, better profitability while at the same time providing structural advantages to enhance competitiveness, company officials said...
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