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A study on working capital management of a conglomerate: with reference to ITC LMT

A study on working capital management of a conglomerate: with reference to ITC LMT

Anusha S Nadiger¹, Tejash Das², Kapil Chabra², Rishika Bansal², Zahi Mustafa², Swayam Mittal²

• ¹Assistant Professor, Department of Management, Jain (Deemed-to-be University) – Centre for Management Studies
• ²Students, Jain (Deemed-to-be University) – Centre for Management Studies

Abstract

This study digs into the complex dynamics of working capital management inside conglomerates, with a special focus on ITC Limited. As conglomerates like ITC operate in a complex environment, successfully managing working capital becomes critical to their financial health and sustainability. However, conglomerates' distinct qualities, such as diverse industry exposure, worldwide expansion, and the incorporation of sustainability practises, need a thorough evaluation of their working capital strategy.

By empirically analysing the complexities of working capital management inside conglomerates, this study fills a large research vacuum in the existing literature. It explores the following major areas using a combination of quantitative and qualitative analyses. Working Capital in a Diversified Portfolio: The research looks at how ITC Limited, a conglomerate with holdings in FMCG, hospitality, agriculture, and tobacco, manages its working capital in the face of sectoral heterogeneity. It investigates whether sector-specific factors have a major impact on working capital decisions. Geographic Diversification: The study investigates the impact of geographic diversification on the working capital management of ITC Limited, taking into account both domestic and international businesses. Financial Instrument Utilization: The study investigates the strategic use of financial instruments such as short-term debt, commercial paper, and derivatives in optimizing the conglomerate's working capital needs. Sustainability Integration: This study looks into the incorporation of sustainability and ESG concepts into ITC Limited's working capital management methods, emphasizing the alignment between profitability and environmental and social responsibility.

In conclusion, this research paper not only enriches the understanding of working capital management in the context of conglomerates but also provides insights that can be extended to diversified corporations across various industries and regions. The findings contribute to the development of nuanced working capital management frameworks that align with the diverse and evolving needs of conglomerates, further illuminating the path to financial success and sustainability in an intricate and ever-changing business landscape.

Keywords

Working capital management, Conglomerates, Diversified portfolios, Sectoral Heterogeneity, Geographic Diversification, Sustainability Integration, ESG (Environmental, Social, and Governance), Nuanced Working Capital Management Frameworks.