January 30, 2024
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ITC Q3 NP rises 11% to Rs 5,572 crore; interim dividend announced
ITC Ltd reported standalone net profit at Rs 5,572 crore for the December quarter of FY24, registering a growth of 11 percent from Rs 5,031 crore in the same quarter of the previous financial year. The results beat Street estimates.
Sequentially, the net profit rose 13 percent from Rs 4,927 crore in the September quarter.
The company announced a 6.5 percent increase in its consolidated net profit, reaching Rs 5400.51 crore for the quarter ending in December.
Total revenue from operations of the company rose 2 percent on year-on-year basis at Rs 17,651.85 crore from Rs 17,265 crore, the company said in a regulatory filing on January 29. The consolidated revenue was up 2.4 percent at Rs 19,484.50 crore.
Earnings before interest, tax, depreciation and amortization (EBIDTA) for the quarter was at Rs 6,024 crore down 3.2 percent. EBIDTA margin was at 36.6 percent and fell by 180 basis points YoY. One basis point is one-hundredth of a percentage point.
The cigarettes-to-hotel conglomerate also announced an interim dividend of Rs 6.25 per share for the financial year 2023-2024. The board fixed the record date for the same on February 8.
Segment-wise performance:
FMCG
The company had a resilient performance in the FMCG – Others segment despite subdued demand conditions, with a YoY increase of 7.6 percent in segment revenue and a 2-year CAGR at 12.8 percent. The growth was driven by various categories including Staples, Dairy, Beverages, Fragrances, Personal Wash, Homecare, Agarbattis, and Notebooks. The segment’s EBITDA margin expanded by 100 bps YoY to 11.0 percent, and the segment PBIT increased by 24.1 percent YoY, said ITC.
Cigarettes
In the Cigarettes Segment, consolidation occurred on a high base following sustained growth momentum. The net segment revenue and segment PBIT increased by 2.3 percent YoY, with a 2-year CAGR at +9.3 percent for net segment revenue and +9.4 percent for segment PBIT. The market standing was reinforced through focused portfolio/market interventions and agile execution, with differentiated and premium offerings performing well. The segment’s sustained volume recovery from illicit trade was observed due to deterrent actions and tax stability.
Hotels
The hotels segment witnessed its best-ever quarter, with segment revenue and PBIT increasing by 18 percent and 57 percent YoY, respectively. The segment EBITDA margin rose by 470 bps YoY to 36.2 percent, driven by higher RevPARs, structural cost interventions, and operating leverage. The demerger plan received no-objection from the Stock Exchanges, said ITC.
Agri Business
The Agri Business segment faced challenges due to trade restrictions on agri commodities (-2.2 percent YoY), but excluding Wheat & Rice, revenue increased by 14.2 percent YoY. Geopolitical tensions and climate emergencies led to concerns over global food security and inflation, resulting in trade restrictions.
The company is working with farmers to build resilience in agrarian practices, with a Climate Smart Agriculture program covering over 23 lakh acres and about 7.5 lakh farmers. A state-of-the-art facility for manufacturing and exporting Nicotine and Nicotine derivative products has been commissioned, the company said in a press release.
Paperboards, Paper, and Packaging
The Paperboards, Paper, and Packaging segment continued to be impacted by low-priced Chinese supplies, muted domestic demand, a surge in wood cost, and a high base effect. Global demand remained subdued, and domestic demand recovery slowed post the festive season.
Despite challenges, the integrated business model, Industry 4.0 initiatives, strategic investments, and proactive capacity augmentation helped partially mitigate pressure on margins, ITC stated.
The company achieved a record high production of in-house chemical pulp and progressively ramped up the capacity utilization of the Nadiad packaging and printing unit in Gujarat. The commissioning of a premium Moulded Fibre Products manufacturing facility is expected shortly, it added.
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