ITC Q1 results: Profit at Rs 4,917 crore, misses Street estimates; key highlights

ITC on Thursday reported a 0.3 per cent year-on-year (YoY) rise in standalone net profit at Rs 4,917.45 crore for the June quarter compared with Rs 4,902.74 crore in the same quarter last year. The standalone revenue from operations came in at Rs 18,077.24 crore against Rs 16,842.93 crore in the year-ago quarter, up 7.32 per cent. Analysts were largely expecting ITC to report a 2-6 per cent year-on-year (YoY) rise in profit on 6-7 per cent jump in sales.

"Gross Revenue was up 7.3 per cent YoY in a challenging operating environment, driven by Hotels, Value Added Agri products and Leaf Tobacco. FMCG – Others and Cigarettes delivered resilient performance amidst subdued demand conditions. While green shoots of demand recovery emerged during the quarter in the Paperboards, Paper & Packaging segment, performance remained impacted largely due to cheap Chinese supplies in international markets including India and a surge in domestic wood
prices," ITC said.

On a consolidated basis, ITC reported a 0.26 per cent YoY drop in profit at Rs 5,091.59 crore for the June quarter compared with Rs 5,104.90 crore in the same quarter last year. Revenue from operations rose 7.45 per cent YoY to Rs 20,029.60 crore compared with Rs 18,639.48 crore in the corresponding quarter last year.

FMCG businesses see margin expansion

ITC said its FMCG businesses delivered resilient performance amidst muted demand conditions with segment revenue growing 6.3 per cent YoY to Rs 5,491 crore on a high base. The segment's Ebitda margins expanded 25 basis points (bps) YoY to 11.3 per cent.

Cigarette segment revenues up 7%

In the case of cigarette division, net segment revenue rose 7 per cent while the segment's PBIT increased 6.5 per cent YoY. The division continued to counter illicit trade and reinforce market standing by fortifying the product portfolio through innovation, democratising premiumisation across segments backed by superior on-ground execution, ITC said.

"A sharp escalation in costs of leaf tobacco and certain other inputs were largely mitigated through improved mix, strategic cost management and calibrated pricing," it added.

Hotel biz clock double digit growth, demerger update

In the case of hotels segment, revenue jumped 10.9 per cent YoY. The segment's PBIT was up 11.5 per cent YoY, as strong growth was witnessed across properties, despite fewer wedding dates and extreme heatwave, impacting domestic travel & out-of-home dining. ITC said it has received shareholders approval on June 6 and a petition for sanction of the scheme was filed with NCLT on July 22

Paperboard segment sees degrowth on Chinese supplies

The agri business segment revenues were up 22.2 per cent, driven by value added agri products, leaf tobacco and wheat. Meanwhile, the performance in the Paperboards, Paper & Packaging segment reflected the impact of low-priced Chinese supplies in global markets including India, muted domestic demand, unprecedented increase in domestic wood costs. The segment revenue declined 6.8 per cent YoY.

On Thursday, ITC shares settled at Rs 493.75 on BSE, down 0.26 per cent.