ITC Limited, one of India’s most diversified conglomerates, has steadily evolved beyond its tobacco-dominated legacy into sectors such as FMCG, Hotels, Agri-Business, and Paperboards & Packaging. Among these, the Paperboards & Specialty Papers Division (PSPD) stands out for its strategic relevance, especially as sustainability and eco-friendly packaging gain prominence, both globally and in India. This article offers a comprehensive analysis of ITC’s Paperboards & Packaging Division assessing its market position, growth catalysts, strategic plans, financial contribution, challenges, and long-term prospects.
Table of Contents
- Overview of ITC's Paperboards & Specialty Papers Division (PSPD)
- Market Dynamics and Growth Drivers in India’s Paper & Packaging Industry
- ITC PSPD’s Strategic Initiatives for Growth
- Revenue Contribution and Growth Prospects of the Division
- Challenges and Headwinds for ITC PSPD
- Future Outlook and Growth Potential
- Conclusion
- FAQs
ITC’s Paperboards & Specialty Papers Division (PSPD), India’s largest and most technologically advanced paper and paperboard business, plays a vital role in the packaging, pharmaceuticals, publishing, and stationery industries. It manufactures Packaging & Graphic Boards, Specialty Papers, and eco-friendly plastic substitution products, including 100% food-grade and recycled boards. Backed by four state-of-the-art facilities, the division champions sustainability through renewable energy use and afforestation programmes, reinforcing its leadership in eco-friendly packaging in India.
Wrap-up: ITC-PSPD’s size, technological edge, and deep sustainability focus position it as the dominant force in India’s paperboards and packaging sector, with a future-ready business model.
India’s paper and packaging market is growing steadily, driven by demographic shifts, higher consumer spending, and rising sustainability awareness. With India ranking as the world’s fifth-largest paper producer, annual demand is increasing at a rate of 6–7%. Yet, per capita consumption remains low at just 15 kg, compared to the global average of 57 kg, highlighting significant headroom for growth. This potential is further supported by strong structural trends such as the e-commerce boom, rising middle-class affluence, a nationwide single-use plastic ban, and a marked consumer shift towards eco-friendly products, all providing powerful tailwinds for paperboard demand.
Wrap-up: Favourable demographic trends, regulatory shifts, and rising sustainability preferences are creating a booming environment for ITC PSPD to capture significant market share.
To harness market opportunities, ITC PSPD has rolled out several high-impact initiatives. The ₹3,500 crore acquisition of Century Pulp & Paper in March 2025 expanded its paper capacity by 50%, strengthened its presence in northern India, and is expected to be EPS-accretive within its first full year. Product innovation remains central, from recyclable ‘Wrapwell’ and biodegradable ‘Omega’ boards to specialised e-commerce packaging solutions. The launch of the Moulded Fibre Products business under ITC Fibre Innovations Ltd. and a comprehensive Industry 4.0 digital transformation initiative are further boosting margins and operational agility.
Wrap-up: Strategic acquisitions, eco-friendly product launches, and cutting-edge digitalisation initiatives have fortified ITC PSPD’s market leadership and set it firmly on a high-growth trajectory.
Curious about ITC’s broader structure beyond PSPD? Read about the strategic roles of key ITC subsidiaries and their market contributions.
In Q4 FY24, the paper segment reported a revenue of ₹2,073 crore, down from ₹2,221 crore in Q4 FY23. Segment profit also declined to ₹293 crore from ₹445 crore a year earlier. The decline was driven by pricing pressure from low-cost imports, particularly from China and Indonesia, along with a sharp rise in wood costs, which continued to weigh on operating margins.
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Wrap-up: The paper segment faced a challenging Q4 FY24, with revenue falling 6.7% YoY to ₹2,073 crore and profit declining 34% to ₹293 crore. The weakness was driven by pricing pressure from low-cost imports and a sharp rise in wood costs.
The Paperboards & Packaging Division generated ₹8,344 crore in revenue in FY24, accounting for 12% of ITC’s total gross revenue. Segment profit stood at ₹1,378 crore, significantly lower than ₹2,294 crore in FY23. Despite the decline, growth prospects remain strong, driven by the ₹3,500 crore acquisition of Century Pulp & Paper, which enhances capacity by over 50% and expands geographical reach. Additionally, rising demand for sustainable packaging and export opportunities is expected to fuel long-term growth potential of the division.
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Wrap-up: Consistently contributing over 10% of ITC’s topline, the Paperboards & Packaging Division remains a dependable revenue engine, with multiple new growth levers now unlocked.
Check the latest ITC share price, updated charts, and key financials to evaluate its stock performance.
Despite a supportive market, ITC PSPD faces challenges such as a 33% surge in low-priced imports from China and Association of Southeast Asian Nations (ASEAN), increasing wood costs, and margin compression. The paper industry’s sensitivity to economic cycles also affects demand volatility.
To counter these, ITC is enhancing export capabilities, diversifying product portfolios, optimising costs, and expanding strategically with moves like the CPP acquisition to balance operational risks and unlock new markets.
Wrap-up: While external pressures persist, ITC PSPD’s resilience strategies spanning exports, acquisitions, and portfolio diversification position it well to navigate near-term headwinds.
The long-term outlook for ITC PSPD is strong, driven by robust demand in sectors like FMCG, e-commerce, QSRs, pharmaceuticals, and education. The sustainability wave and India’s plastic ban provide a once-in-a-generation opportunity for paperboard products.
The CPP acquisition, Moulded Fibre Products business, and eco-labelled product portfolio (already delivering double-digit revenue growth) will amplify ITC’s capacity, reach, and market share. Industry 4.0-driven efficiencies will further enhance margins and competitiveness.
Wrap-up: Backed by compelling demand drivers, strategic investments, and digital innovation, ITC PSPD is strategically positioned for sustainable, high-margin growth over the next decade.
Curious about how ITC’s packaging business evolved into a sustainability success story? Watch the video below to learn more.
ITC’s Paperboards & Packaging Division has become a critical pillar of the conglomerate’s diversified portfolio.
- Strong Foundation: India’s largest, greenest, and most advanced paper business
- Favourable Market: Rapid growth, low per capita usage, and sustainability tailwinds
- Aggressive Expansion: Century Pulp & Paper acquisition, digital initiatives, and new eco-friendly products
- Operational Resilience: Debt-free balance sheet, robust profitability, and ESG leadership
Wrap-up: With a clear strategic roadmap and powerful growth catalysts, ITC’s Paperboards & Packaging Division is poised to become one of its fastest-growing verticals and a major value creator within the “ITC Next” vision.
Also, curious about ITC’s capital returns alongside its growth story? Dive into the full ITC dividend history for a view on payouts.
Q1: What is ITC’s Paperboards & Packaging Division, and why is it important to ITC Limited?
ITC’s Paperboards & Specialty Papers Division (PSPD) is India’s largest and most advanced paper and packaging business. It plays a crucial role in diversifying ITC's business beyond tobacco, contributing over 10% to total revenues while supporting sustainability-driven packaging demand.
Q2: How much revenue does ITC’s Paperboards & Packaging Division contribute to ITC Limited?
In FY 2023-24, ITC’s Paperboards & Packaging Division generated ₹8,344 crore, contributing approximately 10.2% to the company’s total gross revenue.
Q3: What are the key growth drivers for the Indian paper and packaging industry?
Major growth drivers include the rapid growth of e-commerce, rising disposable incomes, expanding middle-class consumption, India's single-use plastic ban, and increasing demand for eco-friendly and sustainable packaging alternatives.
Q4: What recent acquisition has boosted ITC’s packaging business capacity?
ITC acquired Century Pulp & Paper (CPP) for ₹3,500 crore in March 2025. This increased its paper capacity by nearly 50%, adding 4.8 lakh metric tonnes per annum and expanding its reach into North India.
Q5: How is ITC addressing sustainability in packaging solutions?
ITC PSPD offers a range of eco-friendly, plastic-free, and biodegradable packaging solutions under brands like Filo, Omega, and Wrapwell. It has also launched ITC Fibre Innovations Ltd. for premium moulded fibre packaging products.
Q6: What are the biggest challenges for ITC’s Paperboards & Packaging Division?
The primary challenges include rising imports of low-priced paperboards from China and ASEAN, increasing wood costs, and margin pressures amid global supply chain fluctuation