ITC Q1 results: Profit up 18% to Rs 4,903 crore; sales down 7%

ITC on Monday reported a 17.58 per cent year-on-year (YoY) rise in standalone net profit at Rs 4,902.74 crore for the June quarter compared with Rs 4,169.38 crore in the same quarter last year. This was higher than 11-13 per cent growth in profit that analysts predicted ahead of quarterly results.

Revenue for the quarter came in at Rs 16,995.40 crore, down 7.23 per cent YoY over Rs 18,320.16 crore in the same quarter last year. Analysts had anticipated flattish sales growth.

ITC said it saw robust growth in FMCG – Others segment, with revenue rising 16.1 per cent YoY and exceeded Rs 5,000 crore mark for the first time in a quarter. The segment Ebitda margin expanded 325 basis points YoY to 11.0 pre cent, with staples, biscuits, noodles, beverages, dairy, agarbatti and premium soaps driving the  growth.

The Cigarettes segment reported 10.9 per cent YoY rise in sales, thanks to sustained volume claw back from illicit trade on the back of deterrent actions by enforcement agencies and relative stability in taxes. The segment's PBIT was up 11.2 per cent YoY.  -

ITC said its market standing reinforced through focused portfolio/market interventions and agile execution.

It said it was its best-ever Q1 in Hotels business. The segment revenue was up 8.1 oer cent YoY on high base. The segment PBIT was up 17 per cent YoY; led by strong growth in ARRs. This segment's Ebitda margin was up 140 bps YoY to 33.9 per cent

In the case of Agri Business segment, revenues rose 31 per cent YoY (excluding wheat exports). The segment PBIT was up 25.3 per cent YoY.

"Strong customer relationships and agile execution in leaf tobacco & value added agri products drive growth and margins - Geopolitical tensions have led to concerns over food security and food inflation globally. To ensure India remains food secure, Government has had to impose restrictions on wheat & rice exports. These restrictions have resulted in lower business opportunities for the Agri Business during the quarter," ITC said.

ITC, meanwhile, said its board has approved the scheme of arrangement amongst ITC and ITC Hotels and their respective shareholders and creditors under Sections 230 to 232 read with other applicable provisions of the Companies Act, 2013. 

In a BSE filing,  ITC said scheme involves the demerger of the demerged undertaking comprising the Hotels Business of the demerged company into the resulting company on a going concern basis and in consideration. ITC said the the consequent issuance of equity shares by the resulting company to all the shareholders of the demerged company would be in accordance with the share entitlement Ratio i.e. “for every 10 ordinary shares of face and paid-up value of Re 1 each held in the demerged company, one equity share of face and paid-up value of Re. 1 in the resulting company.

Post the implementation of the Scheme, the shareholders of ITC will directly hold about 60 per cent in the resulting company, proportionate to their shareholding in ITC; the balance stake of about 40 per cent in the resulting company will be held by ITC.

Overall, the shareholders of ITC will hold 100 per cent of the ultimate beneficial economic interest in the Hotels business (direct holding of about 60 per cent and indirect holding of about 40 per cent through ITC).